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P. SINGH. J Leave granted. The appellant while going on read on 4.12.1990 became victim of an accident, because of the rash and negligent driving of the scooter by respondent No.1 hereinafter referred to as the respondent . The appellant suffered serious injuries and was admitted in Badwah Hospital, the same day. On 7.12.1990 he was shifted to M.Y. Hospital, Indore and was treated as an indoor patient till 27.9.1991. Because of the accident the appellant became permanently disabled, as his left leg above thigh and hip had been fractured. He also lost his services as a Driver. The claim petition for companypensation was filed before the Additional Motor Accident Claims Tribunal, Badwah hereinafter referred to as the Tribunal on 7.12.1991 along with an application for companydonation of delay which was of four days only. The Tribunal by its order dated 18.11.1993 companydoned the delay in filing the claim petition. The validity of the said order was challenged by the respondent before the High Court of Madhya Pradesh at Jabalpur. The High Court by its order dated 31.7.1995 set aside the order of the Tribunal aforesaid companydoning the delay saying that in view of subsection 3 of Section 166 of the Motor Vehicles Act, 1988 hereinafter referred to as theAct the power of companydonation by the Tribunal has been withdrawn and any claim must be filed within the period prescribed therein. The High Court further observed that by prescribing the fixed period for filing the petition for claim, the intention was that the sword of liability of paying companypensation in respect of accident caused by motor vehicle should number be permitted to hover on the head of the person owning the said vehicle and person driving such vehicle. It was also pointed out that the position was different under the Motor Vehicles Act, 1939 in which sub-section 3 of Section 110-A although prescribed a period of six months for filing an application for companypensation from the date of the accident, but vested power in Tribunal to entertain such application even after the expiry of the said period of six months, if the Tribunal was satisfied that the claimant was prevented by sufficient cause from making the application in time. Sub-section 3 of Section 110-A of the Motor Vehicles Act, 1939 provided No application for such companypensation shall be entertained unless it is made within six months of the occurrence of the accident Provided that the Claims Tribunal may entertain the application after the expiry of the said period of six months if it is satisfied that the applicant was prevented by sufficient cause from making the application in time. The Act which repealed the earlier Motor Vehicles Act of 1939 came in force w.e.f. 1.7.1989. The new Act prescribed a period of limitation for filing the claim petition in sub-section 3 of Section 166. Said subsection provided No application for such companypensation shall be entertained unless it is made within six months of the occurrence of the accident. Provided that the Claims Tribunal may entertain the application after the expiry of the said period of six months but number later than twelve months, if it is satisfied that the applicant was prevented by sufficient cause from making the application in time. According to the High Court, as proviso to sub-section 3 of Section 166 of the Act said that Claims Tribunal may entertain the application after the expiry of the said period of six months but number later than twelve months, any application filed beyond the period of twelve months from the date of the accident cannot he entertained as numberdiscretion had been left with the Tribunal to companysider the circumstances because of which the application for claim companyld number be filed within the period of twelve months of the occurrence of the accident. Before the scope of sub-section 3 of Section 166 of the Act is examined, it may be pointed out that the aforesaid sub-section 3 of Section 166 of the Act has been omitted by Section 53 of the Motor Vehicles Amendment Act, 1994 which came in force w.e.f. 14.11.1994. The effect of the Amending Act is that w.e.f. 14.11.1994 there is numberlimitation for filing claims before the Tribunal in respect of any accident. It can be said that Parliament realised the grave injustice and injury which was being caused to the heirs and legal representatives of the victims who died in accidents by rejecting their claim petitions only on ground of limitation. It is a matter of companymon knowledge that majority of the claimants for such companypensation are ignorant about the period during which such claims should be preferred. After the death due to the accident, of the bread earner of the family, in many cases such claimants are virtually on the streets. Even in cases where the victims escapes death some of such victims are hospitalized for months if number for years. In the present. case itself the applicant claims that he met with the accident on 4.12.1990 and he was being treated as an indoor patient till 27.9.1991. According to us, in its wisdom the Parliament, rightly thought that prescribing a period of limitation and restricting the power of Tribunal to entertain any claim petition beyond the period of twelve months from the date of the accident was harsh, inequitable and in many cases was likely to cause injustice to the claimants. The present case is a glaring example where the appellant has been deprived by the order of the High Court from claiming the companypensation because of delay of only four days in preferring the claim petition. In this background, number it has to be examined as to what is the effect of omission of sub-section 3 of Section 166 of the Act. From the Amending Act it does number appear that the said sub-section 3 has been deleted retrospectively. But at the sametime, there is numberhing in the Amending Act to show that benefit of deletion of subsection 3 of Section 166 is number to be extended to pending claim petitions where a plea of limitation has been raised. The effect of deletion of sub-section 3 from Section 166 of the Act can be tested by an illustration. Suppose an accident had taken place two years before 14.11.1994 when sub-section 3 was omitted from Section 166. For one reason or the other numberclaim petition had been filed by the victim or the heirs of the victim till 14.11.1994. Can a claim petition be number filed after 14.11.1994 in respect of such accident? Whether a claim petition filed after 14.11.1994 can be rejected by the Tribunal on the ground of limitation saying that the period of twelve months which had been prescribed when sub-section 3 of Section 166 was in force having expired the right to prefer the claim petition had been extinguished and shall number be revived after deletion of sub-section 3 of Section 166 w.e.f. 14.11.1994? According to us, the answer should be in negative. When sub-section 3 of Section 166 has been omitted, then the Tribunal has to entertain a claim petition without taking numbere of the date on which such accident had taken place. The claim petitions cannot be thrown out on the ground that such claim petitions were barred by time when sub-section 3 of Section 166 was in force. It need number be impressed that Parliament from time to time has introduced amendments in the old Act as well as in the new Act in order to protect the interest of the victims of the accidents and their heirs if the victims die. One such amendment has been introduced in the Act by the aforesaid Amendment Act 54 of 1994 by substituting sub-section 6 of Section 158 which provides As soon as any information regarding any accident involving death or bodily injury to any person is recorded or report under this section is companypleted by a police officer, the officer incharge of the police station shall forward a companyy of the same within thirty days from the date of recording of information or, as the case may be, on companypletion of such report to the Claims Tribunal having jurisdiction and a companyy thereof to the companycerned insurer and where a companyy is made available to the owner, he shall also within thirty days of receipt of such report, forward the same to such Claims Tribunal and Insurer. In view of sub-section 6 of Section 158 of the Act the officer incharge of the police station is enjoined to forward a companyy of information report regarding the accident to the Tribunal having jurisdiction. A companyy whereof has also to be forwarded to the companycerned Insurer. it also requires that where a companyy is made available to the owner of the vehicle, he shall within thirty days of receipt of such companyy forward the same to the claims Tribunal and insurer. In this background, the deletion of sub-section 3 from Section 166 should be given full effect so that the object of deletion of said section by the Parliament is number defeated. If a victim of the accident or heirs of the deceased victim can prefer claim for companypensation although number being preferred earlier because of the expiry of the period of limitation prescribed, how the victim or the heirs of the deceased shall be in a worse position if the question of companydonation of delay in filling the claim petition is pending either before the Tribunal, High Court or the Supreme Court. The present appeal is one such case. The appellant has been pursuing from Tribunal to this Court. His right to get companypensation in companynection with the accident in question is being resisted by the respondents on the ground of delay in filling the same. If he had number filed any petition for claim till 14.11.1994 in respect of the accident which took place on 4.12.1990, tn view of the Amending Act he became entitled to file such claim petition, the period of limitation having been deleted, the claim petition which has been filed and is being pursued upto this Court cannot be thrown out on the ground of limitation. The matter will be different if any claimant having filed a petition for claim beyond time which has been rejected by the Tribunal or the High Court, the claimant does number challenge the same and allows the said judicial order to become final. The aforesaid Amending Act shall be of numberhelp to such claimant. The reason being that a judicial order saying that such petition of claim was barred by limitation has attained finality. But that principle will number govern cases where the dispute as to whether petition for claim having been filed beyond the period of twelve months from the date of the accident is pending companysideration either before the Tribunal, High Court or this Court.

OPINION OF MR ADVOCATE-GENERAL DAND DELIVERED ON 10 DECEMBER 1968 ( ) Mr President, Members of the Court, Mr De Cicco, an Italian national, worked as a wage-earner in Germany from 1941 to 1945, for a period of 42 months, during which he contributed to invalidity insurance. From 1959 to 1965, for 84 months, he worked in Italy as a craftsman and paid contributions to the Italian social security fund (Istituto Nazionale della Previdenza Sociale, or INPS) under the special scheme for craftsmen. Thus he had what is called a ‘mixed career’, both as a wage-earner and as a self-employed person. In April 1965 he was declared unable to carry out his occupation (‘berufsunfähig’) and in December 1967 incapable of work (‘erwerbsunfähig’), in both cases within the meaning of the German pension legislation. On 9 April 1965 an application for a German invalidity pension was sent to the Landesversicherungsanstalt Schwaben (Swabian Regional Insurance Institution), the appropriate agency, through the intermediary of the provincial office of the INPS at Chieti which pointed out that Mr De Cicco had only been insured in Italy as a craftsman. Under Articles 1246 and 1247 of the Reichsversicherungsordnung (German Social security regulations) Mr De Cicco had a right to the pension applied for only if, in order to complete the requisite qualifying period of 60 months, in addition to the contributions paid to the German social security fund for wage-earners (42 months) the contributions made to the Italian craftsmen's insurance (84 months) could also be taken into account; that is, only if there was an aggregation of the corresponding periods within the meaning of Article 27(1) of Regulation No 3 concerning social security for migrant workers. Holding that the insurance periods completed in Italy were not covered by Article 1 (p) of this regulation, which defines what is meant by ‘insurance periods’, the German agency rejected Mr De Cicco's application for a pension on 7 September 1965. He appealed to the Sozialgericht (Social Court), Augsburg, against this decision. By a judgment of 5 August 1968 that court has referred the case to you in exercise of its right under the second paragraph of Article 177 of the Treaty. Not that it has any doubts on the answer to be given: its judgment, containing a lengthy and detailed statement of grounds, sets out all the reasons leading it to believe that an order should be made for aggregation. However, there exists a contrary decision from the higher court, the Bavarian Landessozialgericht (Higher Social Court), which the Sozialgericht considers wrong. Your ruling on the matter will settle the point of law at issue between the two courts, but also has a wider interest than the merits of the particular case, as will be seen from the observations submitted by the Italian Government, the Commission and the Landesversicherungsanstalt. I The question referred to you for a preliminary ruling is in the following terms: Are periods of contribution to craftsmen's insurance (special section of the Italian National Social Security Institution for craftsmen) insurance periods within the meaning of Articles 1(p), 24 and 27 of Regulation No 3? 1. In the oral procedure the Landesversicherungsanstalt Schwaben maintained that the German court could not put such a question to you because the answer was not necessary to enable it to give judgment, which is the condition required by the second paragraph of Article 177 for making a reference to this Court. Its reasoning is as follows: the subject-matter of the appeal to the Court is indeed the refusal of the German social security institution to take into consideration the periods completed in Italy, but this refusal rests solely on the negative position adopted by the Italian social security agency. It is only this latter body which can say whether such periods are to be taken into consideration, and its decision — against which the appellant could only appeal before the Italian court — binds both the German administration and the German court. The Sozialgericht could not dispute the decision of the competent Italian agency, especially when this agency was not a party to the case before it and could not therefore ask you to interpret the text on which this decision was based. The Landesversicherungsanstalt added that even if a reference were possible then at the very least the INPS would have to be summoned to submit its observations to you in the proceedings consequent on the reference. These objections to the admissibility of the request for an interpretation and the legality of the procedure followed cannot be sustained. Your previous judgments on the second paragraph of Article 177 have consistently held that it is for the national court alone to determine whether the provision of Community law which it asks you to interpret (in this case Article 1(p), 24 and 27 of Regulation No 3) is necessary for the decision which it must take, and you do not consider yourselves entitled to pronounce on the ‘relevance’ of the question to the issue before it. With regard to the procedural question, the question whether the Italian social security agency should have been called upon to submit its observations to the Sozialgericht is a matter for German law and you cannot take cognizance of it. But once it is established that that agency has not participated in the main action, Article 20 of the Statute of the Court of Justice of the EEC prevents it from appearing before you. That Article restricts the notification of the decision of the court making the reference to you for a preliminary ruling to the parties in the action before that court, the Member States, the Commission and the Council, and reserves to those various persons or agencies the right to submit observations to the Court of Justice. Moreover, intervention is not permitted in the procedure under Article 177. 2. The Commission states — with reason, I think — that the question may be reduced to deciding whether craftsmen are to be considered, for the application of the Regulations, as assimilated to wage-earners in respect of periods completed by them under Italian legislation. If the answer is in the affirmative, then Mr De Cicco's contribution periods are insurance periods within the meaning of Article 1(p), that is, periods to which the Regulations may apply. Although Article 4(1) of Regulation No 3 provides that the Regulation shall apply to ‘wage-earners or assimilated workers’, these two concepts are not defined in the text. The same problem was presented to you in one of your first decisions in the field of social security, the judgment in the case of Hoekstra, née Unger, of 19 March 1964 (75/63 [1964] E.C.R. 177). This declared, with regard to voluntary continued insurance, that these two concepts covered all those who, ‘as such and under whatever description, are covered by the different national systems of social security’. Thus the sphere of application of the Regulation is determined by a criterion of social security and not of labour legislation; this reflects the ever growing independence given to the first of these concepts as against the second. The Commission, in its observations, mentions certain categories of persons who are not wage-earners but to whom the Commission considers the Regulation must apply; I shall not go into these various examples but shall merely deal with that of craftsmen, which has given rise to the case pending before the German court. The Sozialgericht has emphasized that there is a consistent tendency among the six States to grant more extensive protection to craftsmen; it has deduced from this that ‘this category of small independent contractors has, according to general European legal theory, a position analogous to that of workers, is exposed to essentially the same risks as the latter, and may be assimilated to them in the field of social security, in spite of its economic and social characteristics’. It is immediately apparent that this conclusion is drawn by the court from a comparative examination of the relevant legislation in force in each country. Here we come up against the paradox inherent in this type of case. Your jurisdiction under Article 177 only covers the interpretation of Community regulations and not that of national legislation; it is applied in the abstract. However, in order that it may be usefully employed and may guide the national court in its appraisal of the actual case before it, you cannot avoid an examination of provisions of municipal law (which may, moreover, be the national law of the court which is asking you for a ruling as well as that of another Member State). With regard to the case of craftsmen, perhaps it is going too far to conclude, as does the Sozialgericht and, it seems, the Italian Government, that they may everywhere be assimilated to wage-earners, for the treatment given to them is not identical in all the States. They may come under an independent scheme (as in Luxembourg and France; in the latter case periods completed as a craftsman may be aggregated under the general scheme for wage-earners), or a special scheme for independent workers (Belgium), or the scheme applicable to all residents (Netherlands). Finally, in Germany as far as pensions are concerned they come under the social security scheme for workers. In the countries which I have just mentioned, therefore, with the exception of the Federal Republic, it does not appear that the relative legislation assimilates them to wage-earners. There thus remains the case of Italy which has given rise to the question put by the German court: what is the social security scheme for craftsmen in that country? Compulsory sickness insurance for craftsmen was introduced by Law No 1533 of 29 December 1956. Then came Law No 463 of 4 July 1959 which provides for ‘the extension of compulsory invalidity, old-age and death insurance to craftsmen and members of their families’, and which extends insurance against these risks to all the craftsmen covered by the 1956 law. Article 1(2) provides that, in the absence of a contrary provision, this insurance is governed by the provisions of the Royal Decree-Law No 1827 of 4 October 1935 establishing compulsory invalidity insurance for wage-earners. A special scheme with financial independence was created for this purpose within the insurance agency, the INPS (Article 3). The periods completed as craftsmen may be aggregated with those completed by virtue of any activity as a wage-earner (Article 9). One pension only is paid, which, in certain cases, consists of several components corresponding to the periods completed. The system works as follows: if the right to a pension is acquired on the basis of contribution periods completed solely as a wage-earner, then the pension is calculated solely on the basis of these periods, but a supplement is added, calculated on the basis of periods as a craftsman provided that the conditions for an award laid down in the law relating to craftsmen have been fulfilled. This latter statute thus plays, as the Commission says, a supplementary role. — If the right to a pension is not acquired on the basis of periods of contribution completed solely as a wage-earner, the periods completed as a craftsman are not taken into consideration, but the periods completed as a wage-earner are aggregated for the purpose of the acquisition of the right to a pension and the calculation of its amount under the law relating to craftsmen, provided that the general and special conditions of that law are fulfilled. The legislation relating to craftsmen plays a subsidiary role in such a case. This legislation, then, is based generally on the legislation applicable to wage-earners, the application of which it merely modifies in some respects. In view of this, I consider that craftsmen may be regarded as ‘assimilated’ workers under Italian legislation. Consequently, as the Italian Government states, periods of insurance completed in Italy under the insurance scheme for craftsmen as laid down in the Law of 4 July 1959 Constitute periods of insurance with all the consequences which that entails, in particular the possibility of aggregating them with periods completed in Germany for the payment of an invalidity pension. The oral observations made by the advocate for the Landesversicherungsanstalt Schwaben and certain documents submitted by him appeared to show that this opinion was not shared by the INPS. This divergence of view is regrettable and one may hope that in future the practice of the agency administering the insurance scheme might conform with the theory sustained before the Court by the sole authorized representatives of the Italian Republic. But that is a domestic affair. It has in any case no influence on the conclusions which may be drawn from an examination of the 1959 Law in relation to Regulation No 3. II However, it is necessary at this stage to reply to a number of objections, which the Sozialgericht has pertinently refuted. 1. Craftsmen are not mentioned in Annex 9 to Regulation No 4, established by virtue of Article 5(1)(i), which lists the general and special schemes for each Member State. Nevertheless, this circumstance per se does not exclude the scheme for craftsmen from the sphere of application of Regulations Nos 3 and 4; at least this is what seems to me to result from a judgment which you delivered in a fairly similar case. In accordance with Article 3 of Regulation No 3, Annex B lists for each Member State the social security legislation to which Regulation No 3 applies and which was in force at the date of its adoption. It is laid down that each Member State shall notify the President of the Council of any amendment to be made to Annex B as a result of the adoption of new legislation, and the notification must be communicated within three months of the publication of such legislation. In your judgment in the case of Kalsbeek, nee van Der Veen of 15 July 1964 (100/63 [1964] E.C.R. 565) you held that failure to notify new national legislation within the requisite period did not prevent such legislation from being regarded as coming within the general term ‘legislation’. This decision may certainly be extended to cover Annex 9 to Regulation No 4, for which the system in force at the date of the adoption of the Law of 4 July 1959 (since changed by Regulation No 109/65 of the Council of 30 June 1965) required notification to the Administrative Commission by the competent authority in each country of amendments made to the annexes. One may only lament the fact that this notification, it seems, was not made to the Administrative Commission; had it been, that Commission would, as laid down in Article 5(2), then have notified the competent authorities in the other Member States which would have permitted the national court to apply the Community legislation in full knowledge of the facts and would perhaps have avoided the need for a reference to the Court. However that may be, one may assume that it was through inadvertence that the necessary amendment was not made to the annex or notified to the Administrative Commission, for the situation here is very different from that which in the Welchner case (14/67, judgment of 5 December 1967, Rec. 1967, p. 437) prevented you from making such an assumption. If it is borne in mind, on the other hand, that the Law of 4 July 1959 itself appears to be, and is in effect, an extension of the general invalidity insurance scheme, perhaps it might even be considered that there was no need to introduce a special mention in the Annex. 2. By virtue of Article 2(2) of Regulation No 4, the Administrative Commission may assemble for the use of the competent authorities of each Member State all information on the provisions of national legislation to which Regulation No 3 applies, in particular that concerning ‘insurance periods’ as defined in Article 1(p) of that Regulation. In fact, these documents nave been put together by the ILO on the basis of national contributions and under the aegis of the Administrative Commission. It does not mention for Italy the pensions insurance for craftsmen, but one cannot draw any conclusions from this fact as the information has not been brought up to date since 1958, whereas the Law in question dates from 4 July 1959. Here again one can only wish that this information could be kept up to date regularly in the interests of the administrative authorities and of the Court. 3. Finally, it may be added that the Italian Government considers that the insurance periods in question should in any case be aggregated by virtue of Article 13(2) of Regulation No 4, which states: ‘The insurance periods or assimilated periods completed by wage-earners or assimilated workers under social security schemes of a Member State to which the regulation does not apply, but which are reckoned under a scheme to which the regulation does apply, shall be considered as insurance periods or assimilated periods to be taken into account for the purposes of aggregation’. It seems, however, that this provision is solely intended to take into consideration periods completed under a scheme to which the regulation does not apply, where the national consolidation rules permit them to be aggregated with periods to which the regulations do apply. The Commission of the EEC has cited as an example the case of a person working as a wage-earner in Germany, then as a wage-earner and as a craftsmen in France: the French periods as a craftsman, which may be aggregated in France under the general scheme for wage-earners (although craftsmen can certainly not be considered as assimilated to wage-earners) could on the same basis as the French periods as a wage-earner be aggregrated with the German periods as a wage-earner. The Administrative Commission is divided in its interpretation of this provision; I do not consider that there is any need for that to detain us once it is admitted, as I have suggested, that under the Italian scheme craftsmen must be assimilated to wage-earners. We must now answer the question referred to us for a preliminary ruling. As we have seen, it concerns expressly and directly the method of dealing with periods of contribution to the Italian insurance scheme for craftsmen. For the reasons which I have indicated, it seems to me that it is necessary, first, to settle the question whether those concerned are assimilated to wage-earners; moreover, in spite of the examination of the Italian legislation which we have been forced to make, the Court must take care not to give a reply referring expressly and exclusively to that legislation. We are thus led to a formula which more or less repeats and develops that which Mr Advocate-General Lagrange proposed in the case of Hoekslra, nee Unger and which might be as follows: 1. Persons who are, under national law, protected against risks within schemes organized for the benefit of wage-earners must be considered assimilated to wage-earners whatever may be the legal forms used by the legislature to effect their inclusion in such schemes, even if the inclusion of such persons is accompanied by various special detailed rules, provided that such rules do not lead to the creation of a special independent scheme for those persons. 2. Contribution periods completed under a social security scheme of which the beneficiaries are wage-earners or assimilated workers are ‘insurance periods’ within the meaning of Articles 1(p), 24 and 27 of Regulation No 3. It is for the Sozialgericht, Augsburg, to decide as to the costs of this action. ( ) Translated from the French.

MR. JUSTICE ARNOLD: I have before me an application by the joint administrators of Rangers Football Club plc ("the Club") for expedition of various proceedings which I will describe shortly. The background is one of some complexity and I will summarise it as briefly as I can. The Club is, of course, the well-known football club based in Glasgow. For present purposes the story begins with the appointment of the joint administrators on 14 February 2012. The records obtained and examined by the joint administrators included a number of documents relating to the acquisition of an 85.3 per cent stake in the share capital of the Club by a company now called Rangers FC Group Ltd ("Group") on 6 May 2011. The documents relating to that transaction include two documents which are central for present purposes. The first is a Share Purchase Agreement dated 6 May 2011 between, among others, Murray MHL Ltd, which was the vendor, and Group. That agreement provided for Group to invest in the Club a sum in excess of £9.5 million. That sum was made up of £5 million for the acquisition of players, the subject of clause 6.4 of the Agreement; a little over £2.8 million for discharge of a tax liability of the Club, the subject of clause 6.7 of the Agreement; and £1.7 million for capital expenditure, the subject of clause 6.8 of the agreement. All of those moneys were provided by the agreement to be held by Group's solicitors, Messrs. Collyer Bristow, on an undertaking to pay the sums in due course to the Club. Collyer Bristow duly entered into an undertaking in a letter of the same date to pay the sums in question to the Club for the purposes identified in the SPA. It appeared to the joint administrators that a large amount of the money in question should still be in Collyer Bristow's client account in accordance with the undertaking. In particular, one of the documents they received was a letter from Collyer Bristow to Murray MHL Ltd's solicitors of 3 January 2012 stating that the £5 million for expenditure on the acquisition of players had not yet been required and that the sum of just over £2.8 million for a tax liability was still being held in the client account. There was subsequently correspondence between the joint administrators' Scottish solicitors and Mr. Gary Withey, the responsible partner at Collyer Bristow, about the moneys. Mr. Withey produced two reconciliations. The first was a reconciliation produced on 17 February 2012, showing the sum of a little over £24.3 million received from Ticketus LLP and showing various expenditures out of that sum, leaving a balance in Collyer Bristow's account of £260,544.14. The second reconciliation produced on 23 February 2012 showed in addition receipt of moneys from Merchant Turnaround plc of £1 million and from the Trustees of the Jerome Group plc Pension Fund of a little over £2.9 million. The second reconciliation showed a balance of just over £3.9 million remaining in Collyer Bristow's account. On 29 February 2012 the joint administrators obtained a letter of request from Lady Smith sitting in the Court of Session addressed to this court, asking for assistance. On the same day Collyer Bristow paid the sum of £260,544.14 that was identified in the first reconciliation to the joint administrators. The balance of the sum of just over £3.9 million showed on the second reconciliation that is to say somewhat over £3.6 million, continued to be held in Collyer Bristow's account. Subsequently that money was paid over to the joint administrator's solicitors for safekeeping pursuant to an order of Floyd J of 1 March 2012. It became clear to the joint administrators from the documents that they had received, not least the two reconciliations, that the Club might well face competing claims to the sums in the Collyer Bristow account ("the Fund") from the Jerome Pension Fund, from Merchant Turnaround, from Ticketus and from HMRC. Accordingly, the joint administrators made an application which came before Warren J on 8 March 2012 seeking an expedited trial of all those parties' claims to the Fund. Warren J agreed that the trial of those claims should be expedited. He ordered a very accelerated trial indeed of those claims starting on 30 March 2012, and he gave directions to achieve that. In accordance with those directions, points of claim were filed by the joint administrators, by Jerome Pension Fund, by Merchant Turnaround and by HMRC. Ticketus and Collyer Bristow both confirmed that they did not maintain any proprietary claims to the Fund. Subsequently it became apparent to the joint administrators that the matter was even less straightforward than it had appeared at the time of Warren J's order. I take the following account of matters from the skeleton argument prepared by counsel for the joint administrators, but emphasising that this merely represents the joint administrators' case based on their current understanding in the light of the documents to which they have had access thus far. As it presently appears to the joint administrators, the situation in the first quarter of 2011 was that the Club owed substantial debts to a number of creditors, including approximately £16 million to Lloyds Banking Group which subsequently rose to approximately £80 million. In addition, there was the tax liability to HMRC to which I have already referred, and the Club required investment for capital expenditure and acquiring players. In those circumstances Mr. Paul Murray, who was one of the directors of the Club, proposed that the Club should raise funds by issuing some £25 million worth of convertible preference shares. Mr. Murray had apparently identified an underwriter who was prepared to underwrite the share issue in full. At around the same time, however, a Mr. Craig Whyte was seeking to acquire a majority stake in the Club through his company, which is the company that became Group. Collyer Bristow acted as Group's solicitors and, as I have already indicated, Mr. Withey was the Partner in Collyer Bristow who dealt with Group's involvement in the takeover. It appears that Mr. Whyte knew that the Board of the Club was considering the proposal made by Mr. Murray for a share issue to raise £25 million. It appears, therefore, that he appreciated that he would have to offer something better than that in order to persuade the independent directors' committee of the Board to consent to the proposed takeover. Accordingly, he represented that Group would invest in the Club a total amount of more than £27.5 million. That would enable the payment of £18 million to Lloyds, and a sum in excess of £9.5 million to Collyer Bristow to cover the three sums I have already mentioned, namely £5 million for the acquisition of players, the tax liability of £2.8 million and £1.7 million for capital expenditure. It is the joint administrators' case that the representations made by Mr. Whyte were false because Group had no ability to provide the necessary funds in accordance with those representations. Furthermore, it is said that Mr. Withey was privy to the deception and participated in a conspiracy with Mr. Whyte. To that end, it is said that Mr. Withey sent emails to the solicitors acting for the vendor on 22 April 2011 and 26 April 2011 representing that Collyer Bristow had received £27.5 million from Group and that Mr. Withey had performed all necessary anti-money laundering checks to satisfy himself as to the source of the funds. Yet further, Mr. Withey sent the letter of 3 January 2012 to which I have already referred. The reality, so the joint administrators contend, was otherwise. Instead of Group raising the money, what had happened was that sums had been obtained from Merchant Turnaround, from the Jerome Pension Fund and from Ticketus. In the case of Merchant Turnaround, it appears that a sum of £1 million was paid on or around 30 March 2011 in anticipation of a potential investment by Merchant Turnaround in the Club. In the case of Jerome Pension Fund, it appears that a sum of a little over £2.9 million was paid to Collyer Bristow on or around 7 April 2011 in anticipation of a loan. I pause to observe at this stage that both Merchant Turnaround and Jerome Pension Fund contend that neither of those transactions completed. Accordingly, they contend that they have proprietary claims to the sums that they advanced to Collyer Bristow. Finally, the sum of £24.3 million received by Collyer Bristow from Ticketus in around mid-April 2011 was in anticipation of a sale by the Club to Ticketus of season tickets to be issued in future by the Club. All of those sums were advanced pursuant to the undertaking given by Collyer Bristow, so it is said. The exercise that was undertaken by Mr. Whyte and Mr. Withey is characterised as a "show of funds" exercise, in other words, one to give the appearance that Group had the funds necessary to complete the takeover without that appearance being backed up by the reality. In those circumstances there are, as I have indicated, competing proprietary claims by the Club, by Merchant Turnaround, by Jerome Pension Fund and by HMRC to the Fund. In addition, however, there are claims now made against Collyer Bristow under a variety of heads. I will concentrate for present purposes upon the claims made by the joint administrators on behalf of the Club, although there are also claims made by other parties as well. So far as the Club's claims are concerned, on 16 April 2012 the Club commenced proceedings by way of a Part 7 claim form, for a number of heads of claim of which the first is a claim for damages of at least £25 million for unlawful means conspiracy. The joint administrators on behalf of the Club contend in short that Mr. Whyte and Mr. Withey conspired together with intent to injure the club by unlawful means. The principal purpose or objective of the alleged conspiracy was the acquisition by Group of the majority stake in the Club. It is said that Mr. Whyte and Mr. Withey knew that the share issue proposed by Mr. Murray and the takeover being engineered by Mr. Whyte were mutually exclusive alternatives which the board was considering as a means of raising funds, that the success of the conspiracy would necessarily prevent the fully underwritten issue of £25 million of convertible preference shares, and accordingly that it would cause a loss to the Club of at least £25 million. In furtherance of the conspiracy it is alleged that Mr. Whyte and Mr. Withey employed unlawful means, including fraudulent misrepresentations and arrangements which the joint administrators contend involved the provision of unlawful financial assistance, in short the use of the Club's own money to buy its shares. As a result of the conspiracy it is contended that the Club has suffered loss and damage in the sum of at least £25 million. Secondly, a claim is advanced against Collyer Bristow under the undertaking, alternatively for breach of the undertaking. That is put, as I understand it, both on the specific terms of the letter of undertaking given by Collyer Bristow and so far as necessary on the SPA itself. Thirdly, there is a claim against Collyer Bristow for negligence or breach of duty. In short, reliance is placed on the fact that Collyer Bristow became the solicitors acting for the Club on or around 20 May 2012. In the usual way the retainer will have included an implied term that Collyer Bristow would exercise reasonable skill and care. It is contended by the joint administrators on behalf of the Club that Mr. Withey was under a duty to inform the Board that Group had failed to pay the amounts for acquisition of players, the tax liability and the capital expenditure amount to Collyer Bristow and/or that Group was in breach of the SPA, and that he failed to do so. Accordingly, there is a claim for loss and damage. Fourthly, there is a claim against Collyer Bristow for equitable compensation for breach of trust. This in particular relates to the position regarding the funds received from Ticketus. The joint administrators say that, if the agreement with Ticketus became valid and effective in accordance with its terms, the sum of £24.3 million received from Ticketus became beneficially owned by the Club and Collyer Bristow accordingly held the same on trust for the Club. However, following completion of that agreement Collyer Bristow used much of the money to make payments on behalf of Group and/or Mr. Whyte, including payments to discharge Group's liabilities to Collyer Bristow and KiN Financial Advisers LLP in connection with the takeover. Against the background of those matters appearing to the joint administrators, the joint administrators applied to Sales J on 23 March 2012 for directions. He concluded that it would not be satisfactory for the various proprietary claims to be tried in isolation without reference to the wider dispute. Accordingly, he vacated the trial that had been listed for 30 March 2012, and directed that any party who wished to make a personal clam against Collyer Bristow should do so by 16 April 2012. He further directed that the parties to those claims should take steps to have them case managed and heard together with the proprietary claim. It is pursuant to that order that claims have subsequently been commenced by the Club, Merchant Turnaround and Jerome Pension Fund. That then is the background to the present application by the joint administrators. This being an application for expedition, I should remind myself of the principles applicable to such an application which were summarised by Lord Neuberger of Abbottsbury in WL. Gore & Associates v Geox SpA [2008] EWCA Civ 622. In short, there are four factors to be considered: first, whether good reason for expedition has been shown, secondly, whether expedition would be contrary to the good administration of justice, thirdly, whether expedition would prejudice the other parties; and fourthly, whether there were any special factors involved. Considering those factors in turn, the first question is whether good reason for expedition has been shown. So far as that is concerned, the joint administrators rely in part upon the evidence that was before Warren J on the occasion of the application before him, and in part on some updating evidence. Considering the first category of evidence, that primarily consists of a first witness statement of Mr. Paul Clark, who is one of the two joint administrators. In that statement he said at para. 23 that the administrators sought a trial in the week commencing 21 May 2012. That, of course, was a trial of the proprietary claims and, in the event, Warren J was prepared to give those claims an even greater degree of expedition. Returning to Mr. Clark's witness statement, the reason he gave for that was as follows: "This date is sought in the light of the commencement of the 2012/13 SPL season on the weekend of 4 August 2012. As set out above the SPL might expel the Club from the competition if it cannot be satisfied that the Club can complete its fixtures for the new season. I have commented above on the effect expulsion from the SPL would have on the value of the Club." Mr. Clark also said: "Once the SPL fixtures are complete [that is to say the fixtures in the current season], the Club's trading revenue will drop sharply due to the cessation of gate receipts. The Club will, however, require funds to cover overheads in this period. The Fund, if found to be the property of the club, could sustain the costs base through the summer period. Alternatively, it could provide working capital for any new owners' purposes or capital for a distribution to creditors in a CVA." Now have evidence from Mr. Neil Smyth of the joint administrators' solicitors in a witness statement dated 20 April 2012. He deals with the reasons for expedition in paras. 13 to 28 of that statement. As he records, the joint administrators have been able to deal with the company's financial position in the current SPL season by making cost savings. In para. 18 of his statement Mr. Smyth refers to the position after the end of the current season as follows: "There is still a significant concern as to how the company will fund its operations once the season finishes in mid-May 2012. After that point the company's trading will drop sharply (see para. 17 of the PJC witness statement) without any commensurate reduction in its overheads, most notably playing staff wages must be paid over the summer period." Carrying on into para.19: "It is unlikely that a sale of the company will have completed by that point. While there are a number of interested bidders no party has, at the date of this statement, exchanged contracts for purchase of the company or its business or assets. That sale process has been partly delayed by the proposed SPL Rule changes to which I will refer below." He goes on to say in para.24 that it is imperative that the Club is maintained as a going concern, and says this: "While there is some value in the fixed assets, e.g. Ibrox Stadium and Murray Park, the true value of the business is in: (i) its membership of and entitlement to play in the SPL. (ii) the brand and heritage of the company, (iii) the playing staff contracts) If the company is not maintained as a football club playing in the SPL the value of the company to any purchaser will be severely reduced. If the company were to cease to trade as a going concern the value in items (ii) and (iii) would evaporate." He goes on to say in para26: Additionally the creditors of the company are presently being kept out of their money. If this matter can be tried by July 2012 and a CVA is able to follow, then whether or not the company is sold the creditors could expect a distribution in the autumn or winter of 2012. Against that background, the joint administrators seek to directions for an expedited trial on the first available date after 2 July 2012 and before 30 July 2012, with a time estimate of two weeks. The application for expedition is supported by Merchant Turnaround, Jerome Pension Fund and HMRC, but none of those parties advances any independent grounds for expedition. Accordingly, while they support it, they cannot add anything by way of justification for expedition beyond that offered by the joint administrators. Counsel for Collyer Bristow, who is the principal respondent to this application (Group not appearing or being represented before me), submits there is no sufficient justification advanced by the joint administrators for expedition, still less for such a degree of expedition as is sought by the joint administrators' application. He submits that this is simply a case of a party wanting its money as soon as possible and in that respect the case is no different to many others that come before the courts. If one considers the various time periods involved, it is plain that the Club's position in the present season will not be affected one way or the other, given that a trial is only sought in July and the present season will end in mid-May this year. Likewise, so far as the summer break is concerned, given that the new season starts on or about 4 August 2012, it is highly unlikely that expedition would assist the Club with regard to that period. Even on the footing that there is a trial sometime in July, it seems to me to be very unlikely that a judgment will be available -still less enforceable prior to the beginning of the new season. Insofar as the Club faces difficulties as a result of the reduction in income due to the absence of gate receipts during the summer period, it seems to me that that is a difficulty which will not be alleviated by expedition, even of the degree sought. To the extent, therefore, that expedition will assist the Club; it will assist it only with regard to its position in the new season. So far as that is concerned, however, it seems to me that some justification for expedition has been demonstrated. Clearly, the joint administrators need to put the Club on to a stable financial footing as soon as possible. On the evidence, some degree of stability has been achieved at least in the short term. Longer term, a resolution by way of a CVA or a sale of the Club as a going concern must be achieved. I accept that, with a view to achieving either of those outcomes, it would be desirable to have a judgment of the court at the earliest possible date. As I see it, however, there is no critical difference between a judgment becoming available in, say, September 2012 and a judgment becoming available in, say, November 2012. While in circumstances such as these it is plain that everybody wants to know the answer as soon as possible, there is no evidence before me which suggests that a delay of two months during that period would be critical. Accordingly, my conclusion so far as the first factor is concerned is that justification has been shown for an expedited trial, but not such a degree of expedition as is sought by the joint administrators. I turn next to consider the second factor, the good administration of justice. Good administration of justice involves really two aspects. The first is consideration of the interests of the various parties before me, and the efficient disposal of their various competing claims. The second aspect involves those parties who are not before the court, that is to say other litigants who would be prejudiced if these claims are given expedited treatment in preference to theirs. So far as the first of those aspects is concerned, counsel for Collyer Bristow has submitted that a possible solution would be to expedite the proprietary claims to the Fund, that is to say those claims that were originally the subject of Warren J's order, perhaps together with other limited claims, such as the breach of trust claims, and to try those claims in advance of the wider claims now made by the joint administrators on behalf of the Club against Collyer Bristow, and in particular the claims of dishonest conspiracy. He submits that a possible advantage to that course would be that it would enable the competing claims to the £3.9 million (or the remainder that is left of that sum, the £3.6 million) to be sorted out at a relatively early date. Those claims are relatively simple by comparison with the dishonest conspiracy claims, and therefore could be dealt with more quickly. Furthermore, he submits that, while there is some degree of connection between those various claims, the degree of connection is not so great as to make it impossible to have separate trials. Every other party before me has contended, however, that all the claims are inextricably bound up with each other, that the underlying facts of the dishonest conspiracy claims are closely connected with the facts of the other claims, and that it would be quite inefficient to have separate trials of those various claims. I agree with that assessment. It seems to me to be plain, as it would appear it seemed to Sales J on the occasion of the application before him, albeit that at that time the claims had not been formulated in the way that they have now, that really the most efficient way forward is for all these claims to be tried together at one go. Accordingly, I consider that it would be contrary to the good administration of justice to have a first trial of the proprietary and breach of trust claims, and a second trial of the remaining claims. Turning to consider the interests of other litigants, this is really the obverse of the question of whether there is a good reason for expedition. The greater the degree of expedition that is ordered for these claims, the greater the degree of potential prejudice to other litigants. That is particularly so if there is an attempt made, as sought by the joint administrators, to shoe horn a two week trial into the month of July. It is notorious that July is a very busy month in these courts and shoe horning a two week trial in at this short notice would be likely to cause a significant degree of prejudice to other litigants. By contrast, if the trial is expedited so as to be heard in the month of October, that is going to be considerably easier to accommodate without undue prejudice to other litigants. Turning to the third factor, prejudice to other parties, as I have indicated, Merchant Turnaround, Jerome Pension Fund and HMRC all support the application for expedition. Accordingly, it can be taken as read that none of them consider that an expedited trial in July of this year would be prejudicial to them. Collyer Bristow's position, however, is quite different. Counsel for Collyer Bristow submits that requiring a trial of the broad claims now made by the various parties, but in particular by the joint administrators on behalf of the Club, would prejudice Collyer Bristow in its ability to prepare properly for trial. So far as that aspect of the matter is concerned, there are a number of points to be made. The first is the position of Mr. Withey. It will be appreciated from my account of the history that Mr. Withey is a potentially central witness so far as these claims are concerned. As I understand it, from what I have been told, Mr. Withey has instructed solicitors, but thus far appears to be keeping his own counsel, understandably. It is not yet clear to what extent he will be prepared to co-operate with either side. It may be, so far as I know, that he will not co-operate with any of the parties, in which case they will have to consider whether any steps should be made to compel him and, if so, what. The second matter is the position of Group. I have already referred to the fact that Group does not appear and is not represented before me today, despite the fact that it, too, has instructed solicitors. Group's attitude, so far as I can see from the materials before me, presently appears to be one that can colloquially be described as stone-walling. They appear to be making no constructive contribution. They are, however, so far as I understand it, asserting privilege in respect of various classes of document held by Collyer Bristow. If Group maintains that attitude that is inevitably going to make preparation for trial, in particular by Collyer Bristow, rather less straightforward than it would otherwise be. Over and above those two factors, one needs to have regard to the issues raised by the joint administrators' claims on behalf of the Club and the directions that are proposed. So far as the issues raised by the joint administrators' claims on behalf of the Club are concerned, some of those issues appear at present to be relatively straightforward. For example, there are issues as to construction of the undertaking which should lie within a relatively narrow compass. Other issues, however, are much more wide-ranging, in particular the issues raised by the dishonest conspiracy claim. I should pause to observe that it is not clear at this stage exactly how far the issues will extend, given that as yet no defences have been served to any of the Part 7 claims. Even so, it seems clear that the dishonest conspiracy claim in particular will involve a factual investigation as to the dealings between Mr. Whyte and Mr. Withey and as to their respective knowledge and states of mind at the various relevant dates. It will also involve investigation of the degree of reliance placed upon representations that they made. In particular, it will involve an investigation, which will be very important with regard to the question of causation, of what the impact of the representations made was on the independent directors' committee decision with regard to the takeover as compared to the share issue proposed by Mr. Murray. I would add this, that as if those issues were not enough, there were also sundry other issues that I have not yet mentioned, such as the fact that a letter dated 11 August 2011 apparently signed by Mr. Whyte is alleged to have been a forgery in the sense that that Mr. Whyte's signature was forged by Mr. Withey rather than it being a genuine signature of Mr. Whyte. As a result of all these issues, the directions that are proposed by the joint administrators are for defences by 14 May, replies by 21 May, disclosure by 28 May, witness statements by 18 June and experts' reports from both forensic accountants and handwriting experts by 18 June. In my view, those proposed directions place a very, very significant burden indeed upon Collyer Bristow as defendants to the Part 7 claims and, in particular, the dishonest conspiracy claim made by the joint administrators on behalf of the Club. It will be observed that those directions allow for only seven days for disclosure after service of the reply, for witness statements to follow just three weeks later, and for experts' reports to be filed at the same time as witness statements. That really is asking an awful lot of Collyer Bristow and its representatives. It is a timetable that allows absolutely no margin for error. It makes no allowance for the difficulties that could be caused by Mr. Withey and Group, which I have already related. It also makes no allowance for the fact that Collyer Bristow will, of course, have to consult its insurers in respect of the claims made against him at each relevant stage. It makes no allowance whatsoever for the difficulties of obtaining and preparing experts' reports, particularly from the forensic accountants, in circumstances where the forensic accountants on this timetable would be required to prepare their reports without sight of the witness statements, which causes obvious difficulties. All in all, it seems to me that this is a timetable which borders on the unachievable. It is certainly not a timetable which is justified by the factors supporting expedition relied upon by the joint administrators. By contrast, if the matter is listed for trial in October, the extra couple of months, even allowing for summer holidays, will enable the case to be prepared in a much more realistic way and will allow for the potential difficulties of Mr. Withey and Group to be accommodated. It will also allow for a more sensible approach to the preparation of expert evidence and, in particular, for experts' reports to be prepared and exchanged after witness statements and not at the same time. I turn to consider whether there are any other special factors. I do not believe that there are any other than the ones to which I have already referred in the course of this judgment. For all of those reasons, my overall conclusion is that all these claims should be tried together, that they should all be expedited, but they should not be expedited to quite the extent requested by the joint administrators. Rather, they should be expedited so as to be heard in a trial window starting on 1 October and ending on 31 October, and I will make directions to that end. Finally, I turn to a subsidiary aspect of the joint administrators' application before me, which has been the subject of some argument, which is that among the directions sought by the joint administrators as part of their expedited trial application is a direction for specific disclosure to be given by both Group and Collyer Bristow. The proposed order seeks specific disclosure of three classes of document on the same date as standard disclosure. To my mind, this is not an appropriate order for a number of reasons. First, I see no point in ordering specific disclosure before standard disclosure has taken place. In particular, I see no point in ordering specific disclosure to take place on the same date as standard disclosure. Secondly, it seems quite plain that the main argument between the parties is going to be an argument not with regard to disclosure, but with regard to inspection. As I have already indicated, Group is asserting privilege in respect of documents held by Collyer Bristow. That is not an issue that will be resolved by disclosure. It is an issue that will fall to be resolved on an application for inspection once disclosure has been given. There may also be an issue with regard to documents that are not the subject of privilege, but are asserted by Group to be confidential. Again, that is a matter that falls to be dealt with by way of an application for inspection, not on disclosure. Thirdly, it seems to me to be impossible to say at this stage that the classes of document sought by way of specific disclosure are all discloseable classes of documents. As I have indicated, at this stage the defences have yet to be served. Accordingly, at this stage the ambit of the issues is not known. As at present advised, it seems to me to be at least arguable that the classes of documents are too widely defined, but I am not in a position to make a concluded judgment one way or the other on that point: that is a matter which can only be determined after service of the defence or defences. Accordingly, for all of those reasons, I decline to make any order for specific disclosure at this stage. I make it clear, of course, that that does not debar the joint administrators, on behalf of the Club, from making an application for specific disclosure at a later stage. Later: I have to summarily assess the costs of the joint administrators on their application as against Group for the costs of an application for delivery up of the title deeds which, in the event, was conceded. Costs must plainly follow the event. The schedule totals £13,829 as amended. Various points are raised by way of criticism of it. First, the hourly rates, which are over the guideline rates, although that is, as counsel for the joint administrators points out, not conclusive. Secondly, there is a suggestion of duplication, which I accept is not particularly well-founded. Thirdly, criticism is made of the brief fees of counsel and of the fees of Scottish counsel for preparing a note. Taking all of those points into consideration, and considering what is a reasonable and proportionate sum given the nature of the application, I will summarily assess the overall costs in the sum offJ1,000[sic].

Order of the Court of 3 July 1986. - Commission of the European Communities v Board of Governors of the European Investment Bank. - Admissibility. - Case 85/86. European Court reports 1986 Page 02215 Parties Subject of the case Grounds Operative part Keywords PROCEDURE - ORIGINATING APPLICATION - IDENTIFICATION OF THE DEFENDANT ( EEC TREATY , ART . 180 ( B ); RULES OF PROCEDURE , ART . 38 ( 1 )) Parties IN CASE 85/86 COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY BERNARD PAULIN , PRINCIPAL ADVISER , AND HENDRIK VAN LIER , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENTS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF GEORGES KREMLIS , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG , APPLICANT , V BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK , DEFENDANT , Subject of the case APPLICATION FOR A DECLARATION THAT THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD FROM STAFF SALARIES AND PENSIONS IS VOID , Grounds 1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 21 MARCH 1986 THE COMMISSION BROUGHT AN ACTION UNDER ARTICLES 180 ( B ) AND 173 OF THE EEC TREATY FOR A DECLARATION THAT THE DECISION OF THE BOARD OF GOVERNORS OF THE EUROPEAN INVESTMENT BANK OF 30 DECEMBER 1985 ON THE DISPOSAL OF THE PROCEEDS OF THE INCOME TAX WITHHELD FROM STAFF SALARIES AND PENSIONS IS VOID . 2 BY A MEMORANDUM OF 17 APRIL 1984 , SUBMITTED ON BEHALF OF THE EUROPEAN INVESTMENT BANK BY ITS AGENT , DULY APPOINTED BY THE PRESIDENT OF ITS MANAGEMENT COMMITTEE , THE BANK RAISED AN OBJECTION OF INADMISSIBILITY AND REQUESTED THE COURT , IN ACCORDANCE WITH ARTICLE 91 OF THE RULES OF PROCEDURE , TO GIVE A DECISION ON THAT OBJECTION WITHOUT PROCEEDING TO CONSIDER THE SUBSTANCE OF THE CASE . THE BANK ARGUES THAT THE APPLICATION TO THE COURT DOES NOT FULFIL AN ESSENTIAL CONDITION IN ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE , NAMELY THAT IT SHOULD STATE THE NAME OF THE PARTY AGAINST WHOM IT IS MADE ; IT CITES THE ' EUROPEAN INVESTMENT BANK ' AS THE DEFENDANT WHEREAS , ACCORDING TO ARTICLE 180 ( B ) OF THE EEC TREATY , AN ACTION CAN VALIDLY BE BROUGHT ONLY AGAINST THE BOARD OF GOVERNORS OF THE BANK , WHICH ADOPTED THE DECISION WHOSE ANNULMENT IS SOUGHT . 3 THE COMMISSION REQUESTED THE COURT TO DECLARE THE APPLICATION ADMISSIBLE , OBSERVING THAT THE FACT THAT IT NAMED AS DEFENDANT THE LEGAL PERSON OF WHICH THE BOARD OF GOVERNORS IS AN ORGAN DID NOT GIVE RISE TO ANY UNCERTAINTY AS TO THE SUBJECT-MATTER OF THE DISPUTE OR THE AUTHOR OF THE CONTESTED DECISION , BOTH OF WHICH ARE SPECIFIED IN THE APPLICATION . THE NAMING OF THE BANK IS EXPLAINED BY THE HISTORY OF THE DISPUTE AND DID NOT HARM THE INTERESTS OF THE DEFENDANT . 4 ARTICLE 91 ( 3 ) OF THE RULES OF PROCEDURE PROVIDES THAT , ONCE THE APPLICATION AND THE OPPOSITE PARTY ' S SUBMISSIONS HAVE BEEN LODGED , THE REMAINDER OF THE PROCEEDINGS SHALL BE ORAL UNLESS THE COURT DECIDES OTHERWISE ; UNDER ARTICLE 91 ( 4 ) THE COURT MUST DECIDE ON THE APPLICATION OR RESERVE ITS DECISION FOR THE FINAL JUDGMENT . IN THIS CASE , THE COURT CONSIDERS THAT IT IS SUFFICIENTLY INFORMED AFTER READING THE WRITTEN STATEMENTS AND THAT , IN THE INTERESTS OF THE PROPER ADMINISTRATION OF JUSTICE , IT SHOULD RESOLVE THE DISPUTE AS TO THE PARTY AGAINST WHOM THE ACTION SHOULD BE BROUGHT BEFORE IT GOES ON TO EXAMINE THE SUBSTANTIVE ISSUES . THE COURT SHOULD THEREFORE DISPOSE OF THE OBJECTION OF INADMISSIBILITY BY WAY OF AN ORDER , WITHOUT OPENING THE ORAL PROCEDURE . 5 BY VIRTUE OF ARTICLE 180 ( B ) OF THE EEC TREATY THE COURT HAS JURISDICTION IN DISPUTES CONCERNING MEASURES ADOPTED BY THE BOARD OF GOVERNORS OF THE BANK , AGAINST WHOM ANY MEMBER STATE , THE COMMISSION OR THE BOARD OF DIRECTORS OF THE BANK MAY INSTITUTE PROCEEDINGS UNDER THE CONDITIONS LAID DOWN IN ARTICLE 173 . IT APPEARS FROM ARTICLE 180 ( B ) THAT THE ACTION SHOULD BE BROUGHT AGAINST THE BOARD OF GOVERNORS OF THE BANK , AS AN ORGAN OF THE BANK , AND NOT AGAINST THE BANK ITSELF . 6 IN THIS CASE , ALTHOUGH THE OPENING WORDS OF THE APPLICATION CITE THE BANK AS DEFENDANT , THE APPLICATION EXPRESSLY REFERS TO ARTICLE 180 ( B ) OF THE EEC TREATY AND STATES AT THE OUTSET THAT THE PURPOSE OF THE ACTION IS TO HAVE ' THE DECISION OF THE BOARD OF GOVERNORS OF THE BANK DECLARED VOID ' . IT IS THEREFORE CLEAR THAT THE ACTION IS DIRECTED AGAINST THE BOARD OF GOVERNORS AS THE RELEVANT ORGAN OF THE BANK , AND THAT THE APPLICATION SATISFIES THE REQUIREMENTS OF ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE . 7 THE APPLICATION SHOULD THEREFORE BE DECLARED ADMISSIBLE AND THE COSTS RESERVED . Operative part ON THOSE GROUNDS , THE COURT HEREBY ORDERS AS FOLLOWS : ( 1 ) THE APPLICATION IS DECLARED ADMISSIBLE . ( 2 ) COSTS ARE RESERVED .

OPINION OF MR ADVOCATE-GENERAL TRABUCCHI DELIVERED ON 24 OCTOBER 1973 ( ) Mr President, Members of the Court, The national court which has referred to us the questions of interpretation in the present proceedings has to decide whether a German citizen, resident in the Federal Republic at the time when she attained the age of 65 years, and still residing there, has, under Community legislation on social security for migrant workers, a right to benefit under the transitional provisions of Article 43 of the Netherlands General Old-age Insurance Law (AOW) of 31 May 1956. Under this enactment, anyone who, before Article 6 of the said Law came into force, was over 15 years of age but under 65, and who, with or without interruption, had resided in the Kingdom of the Netherlands for six years after completion of his 59th year, is for the purposes of the AOW treated as having been insured during the period between his 15th year and the entry into force of the Law. However, Article 44 of the same Law lays down that only persons of Dutch nationality and who, moreover, have their residence in the Kingdom are entitled to the benefits provided under Article 43. The Dutch insurance institution (‘Sociale Verzekeringsbank’), which at first denied that Article 43 was applicable to Miss Smieja, subsequently changed its mind, having reached the conclusion that, under Articles 8 and 10 of Regulation No 3 of the Council, she was entitled to benefit under the said transitional provisions. On the other hand, the Raad van Beroep of Amsterdam has refused to accept that Article 43 applies to her and, in appeal proceedings instituted by the insurance institution against this refusal, the Centrale Raad van Beroep, acting under Article 177 of the EEC Treaty, referred certain questions on the interpretation of Articles 8 and 10 of Regulation No 3 and of the corresponding provisions in Articles 3 and 10 of Regulation No 1408/71/EEC of the Council, which amended and coordinated the measures adopted for implementing Article 51 of the Treaty in the interests of workers. The questions referred by the Dutch Court are as follows: 1. (a) Do the words ‘the social security legislation of any Member State’ in Article 8 of Regulation No 3, or the words ‘the legislation of any Member State’ in Article 3 (1) of Regulation No 1408/71, mean the national legislation as it is after the rules of Community law have been incorporated in it, or the national legislation as formulated, without taking any account of the material changes brought about by the provisions of the Regulations, namely those contained in Article 10 (1) of both the abovementioned Regulations? (b) Do the words ‘under the legislation of one or more Member States’ in Article 10 (1) of Regulation No 3, or the words ‘under the legislation of one or more Member States’ in Article 10 (1) of Regulation No 1408/71, mean under the national legislation as it is after the rules of Community law have been incorporated in it, or under the national legislation as formulated, without taking any account of the material change brought about by the provisions of the Regulations, namely those contained in Article 8 of Regulation No 3 or Article 3 (1) of Regulation No 1408/71? (c) In other words, do Articles 8 and 10 (1) of Regulation No 3, or Articles 3 (1) and 10 (1) of Regulation No 1408/71, complement each other in such a way that these provisions considered together broaden the requirements of nationality and residence into the citizenship and territory of the Community, or are these provisions entirely independent of each other? 2. What is the meaning of the word ‘acquired’ in Article 10 (1) of Regulations No 3 and No 1408/71, viewed against the background of the manifold legal and factual situations created by the national legislation of the various Member States. So that the problems of interpretation of Community law raised by the Dutch court may be fully understood, these questions, not in themselves exactly crystal clear, must be considered alongside the judgment of the Raad van Beroep against which the appellant in the main action is appealing. It must also be borne in mind that these questions were submitted as they stand to the Centrale Raad, which then referred them to this Court, by the insurance institution itself as appellant, with the object of obtaining an interpretation of the provisions of Articles 8 and 10 of Regulation No 3 which would support its case against the judgment of the court of first instance. It is clear from that judgment that the Raad van Beroep accepts that Miss Smieja satisfies all the conditions under Article 43 of the AOW, including, in particular, under national rules assimilating residence in Germany with residence in the Netherlands, that of residence after 59 years of age, as required by the Law to create an entitlement to the transitional benefits for which it provides. On the other hand, the Raad van Beroep does not regard the two conditions required under Article 44 of the AOW, i.e. those relating to nationality and residence in the State, as having been satisfied. The Dutch court held that the social security rules of the Community have not the slightest effect, in the respondent's case, on the applicability, in their entirety, of the conditions laid down in Article 44 of the AOW. According to the judgment referred to, it therefore follows that Miss Smieja, not being a Dutch national or at present resident in the Netherlands, is unable to draw the pension ‘which the plaintiff has acquired under the legislation in force in the Netherlands’. To reach the different conclusion urged by the insurance institution it would (according to the Raad van Beroep) be necessary to take the unwarranted step of substituting the provisions of Regulation No 3 for the rule in Article 44 of the AOW. It is not very clear whether, in the view of the Raad van Beroep, the conditions regarding nationality and residence laid down in Article 44 together constitute an insurmountable obstacle or whether the main obstacle is residence; nor is it clear whether the court regards them as requirements for the right to pension, for keeping the right itself alive or simply for the right to actual payment of the pension acquired. Nor do we know the view taken on this point by the appellate court which put the questions of interpretation. However that may be, whether the Dutch court has started off on the basis that the conditions contained in Article 44 have to be satisfied in order to create entitlement to the additional transitional benefit provided for in Article 43, or, as seems more likely, on the basis that they relate to keeping the entitlement alive, it is difficult to see how there can be any longer any doubt about the nationality qualification, given the clear terms of Article 8 of Regulation No 3 and the previous finding of this Court in a preliminary ruling (Judgment of 22 June 1972 in Case 1/72, Willi, Rec. 1972, p. 465). Article 8, which provides that persons resident in the territory of one of the Member States and coming within the ambit of Regulation No 3, shall be subject to the obligations and the benefits of the social security legislation of each Member State on the same conditions as the nationals of the State concerned, has, in regard to persons to whom the provisions of Regulation No 3 apply, the clear purpose and effect of excluding the application of any nationality qualification required under the social security legislation of a Member State. This does not mean that Community law is in this way substituting itself in principle for the national law governing citizenship, as stated in the Raad van Beroep judgment; it is only one of many examples of an instrument of Community law reconciling, in this case by a restriction on Article 44 of the AOW, national legislation with the requirements and terms of Articles 48 and 51 of the Treaty establishing the European Economic Community, with effects which are accordingly confined to those entitled to benefit under the social security legislation of the Community. As follows from the judgment in Case 1/72 Frilli, removal of the nationality qualification also affects the overal structure of social security schemes where the subject-matter is legislation which not merely provides for relief in case of need, but has an insurance aspect as well. The transitional nature of Article 43 and of the special benefits it provides could not justify excluding from its operation the workers to whom reference is made in Article 8 of Regulation No 3 and the corresponding Article 3 of Regulation No 1408/71. As the Sociale Verzekeringsbank points out, a benefit of this kind, which is based on the principle of ‘retrospective credit’, cannot be compared with public assistance, and this is borne out by its transferability, in favour of Dutch citizens resident abroad, under the Royal Decree of 20 December 1956, based on Article 45 of the AOW, on condition that they have qualified for a pension in the Netherlands and have resided there for six years after their 59th year. Therefore, as regards persons coming under the social security legislation of the Community, there does not appear to be any reason for recognizing the condition of nationality as a relevant qualification for the benefit provided for under Article 43 of the AOW. If elimination of nationality as a qualification holds good for the acquisition of a social security entitlement, it must a fortiori do so as regards payment of the appropriate benefits. As for the requirement, in Article 44, of current residence in the Netherlands, as soon as it is applied as a qualification, not for entitlement to the benefit provided for under Article 43 (which itself lays down the required period of residence), but for entitlement to be paid in cash the appropriate benefits, it becomes apparent that Article 10 of Regulation No 3 and Article 10 of Regulation No 1408/71 exclude the possibility that, subject to the exceptions specified in paragraph 2 of those Articles, pensions acquired under the legislation of a Member State may be subject to any reduction, modification, suspension, withdrawal or confiscation because the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated. The only exceptions to this rule which are recognized in the case law of the Court are those for which express provision has been made by Community legislation in Article 10 (2) (Judgements in Case 4/66 (Hagenbeek, Rec. 1966, p. 579), in Case 3/70 (Di Bella, Rec. 1970, p. 415), and in Case 61/65 (Vaassen-Goebbels, Rec. 1966, p. 407). The Netherlands Government further maintains that the word ‘acquired’ within the meaning of Article 10 (1) of the Regulations refers exclusively to pensions and benefits provided for thereunder and not to the transitional benefits provided for under Article 43 of the AOW as well. I cannot see how it is possible to justify this restriction on the scope of a Community rule concerning a benefit which, though provided for under a transitional measure, produces a pension or at least an enhancement of the pension to which the beneficiary would otherwise be entitled and which, in this context, becomes a constituent part of the pension itself. A gloss of this kind would, moreover, conflict with the intention of the Community legislature which, in order to exclude the application of the general rule in Article 10 (1) to that part of the pension which is covered by Article 43 of the AOW, had considered it necessary to make an express reference to the subject in Annex E of Regulation No 3, to which Article 10 (2) specifically refers. This restriction on the transferability abroad of pensions under Article 43 of the AOW was removed in 1966 (OJ No 93 of 25 May 1966). Incidentally, it should be noted that, quite apart from the general tenor of the AOW, the provisions referring to it in the Agreement between the Netherlands and the Federal Republic of Germany on the subject of its application to German citizens are quite incapable of operating so as to place a German citizen at a disadvantage compared with the citizens of Member States which have not concluded similar agreements with the Netherlands. Moreover, these provisions of the Agreement do not appear in Annex II of Regulation No 1408/71 listing the provisions of social security conventions remaining applicable notwithstanding Article 6 of the Regulation. What has been said so far is, in my view, sufficient answer to enable the Netherlands court to resolve its doubts concerning the interpretation of Article 8 and 10 of Regulation No 3 and the corresponding provisions of Articles 3 and 10 of Regulation No 1408/71. As regards question I (c), however, it must not be concluded from the foregoing comments that it was necessary for the provisions of Community legislation on social security for workers to supplement the residential conditions required by national social security legislation in order to ensure that in all cases residence in another Member-State was assimilated to that required under such legislation. Although, because differences in treatment based on nationality are, as a general rule, in conflict with the objective of free movement of workers, which the Community legislation referred to seeks to achieve, and with the fundamental prohibition contained in Article 7 of the Treaty, assimilation on such a broad basis can apply on the subject of nationality, the same cannot be said of the requirement concerning residence in the state, where this is prescribed as a condition for acquiring (as opposed to keeping alive) a social security entitlement provided for under a national law, on the assumption, of course, that it does not create, either technically speaking or in actual fact, any discriminations between nationals and foreigners to whom the social security legislation of the Community applies. Any problems or anomalies which may in general arise following application of these principles to comprehensive legislative measures on social security should be resolved by adoption of appropriate legislative provisions. I therefore conclude by proposing that the questions from the Netherlands court be answered on the basis of the foregoing comments. ( ) Translated from the Italian.

SECOND SECTION CASE OF BÖKE AND KANDEMİR v. TURKEY (Applications nos. 71912/01, 26968/02 and 36397/03) JUDGMENT This version was rectified on 18 August 2009under Rule 81 of the Rules of Court STRASBOURG 10 March 2009 FINAL 10/06/2009 This judgment may be subject to editorial revision. In the case of Böke and Kandemir v. Turkey, The European Court of Human Rights (Second Section), sitting as a Chamber composed of: Françoise Tulkens, President,Ireneu Cabral Barreto,Vladimiro Zagrebelsky,Danutė Jočienė,András Sajó,Nona Tsotsoria,Işıl Karakaş, judges,and Sally Dollé, Section Registrar, Having deliberated in private on 17 February 2009, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in three applications (nos. 71912/01 and 26968/02 and 36397/03) 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 two Turkish nationals, Mr Rifat[1] Böke and Mr Halil Kandemir (“the applicants”), on 15 June 2001, 7 May 2002 and 28 October 2003 respectively. 2. The applicants were represented by Mr M.N. Terzi, a lawyer practising in İzmir. The Turkish Government (“the Government”) were represented by their Agent. 3. On 23 September 2005 the President of the Second Section decided to give notice of the applications to the Government. It was also decided to examine the merits of the case at the same time as its admissibility (Article 29 § 3). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 4. The applicants were born in 1969 and 1979 respectively and live in İzmir. A. The arrest and detention of the applicants 5. On 14 February 2001 two persons were shot and injured in a bus by a person who subsequently got off the bus. 6. On the same day, upon receipt of information that the suspect of the shooting was in a red car, police officers from the Aydın police headquarters arrested the applicants during a traffic control operation that had they initiated on the Aydın motorway. The security forces further arrested four other persons, including the first applicant’s brother, in another car. The police officers confiscated the applicants’ mobile telephones and both cars, in which 5 firearms were found. On the same day, the applicants were taken into police custody. 7. On 15 February 2001 three police officers drafted a report containing the numbers dialled and calls received on the mobile telephones of the first applicant, his brother and another suspect. 8. On 19 February 2001 a single judge at the Aydın Magistrates’ Court extended the period of the applicants’ detention in police custody for a further three days. 9. On the same day the applicants’ statements were taken by police officers from the organised crime unit of the Aydın Police Headquarters. According to the document containing their statements, the applicants were suspected of forming a criminal profit-making organisation proscribed by Article 1 of Law no. 4422. According to the document, both applicants confessed to their involvement in a criminal organisation. 10. On 15, 16 and 21 February 2001, the applicants were examined by doctors at the Aydın State Hospital. The doctors noted in their reports that there were no signs of ill-treatment on the applicants’ persons. 11. On 21 February 2001 the applicants were brought before a single judge at the Aydın Magistrates’ Court, who ordered their detention on remand. Before the judge, the applicants refuted the accuracy of the documents containing their statements taken by the police. 12. On 22 March 2001 the firearms found in the cars were subjected to a ballistic examination. The experts found that one of the weapons found in the car of the first applicant’s brother had been used in the shooting of 14 February 2001. 13. On an unspecified date a test was conducted in order to detect traces of gunpowder on the applicants’ and other suspects’ hands, which resulted in the finding of gunpowder traces on the applicants’ hands. B.Criminal proceedings before the İzmir State Security Court 14. On 19 April 2001 the Public Prosecutor at the İzmir State Security Court filed a bill of indictment, charging the applicants and eleven other persons with forming a criminal profit-making organisation. 15. On 5 June 2001 the applicants made statements before the Aydın Assize Court and refuted the veracity of the documents containing their statements taken by the police. The minutes containing their statements were then sent to the İzmir State Security Court. 16. On 13 June 2001 the İzmir State Security Court held the first hearing on the merits of the case and heard some of the accused and read out the evidence in the case file. On the same day the applicants’ representative stated before the court that the applicants disputed the accuracy of the evidence against them, including the medical reports issued following their detention in police custody, which stated that there was no sign of physical violence on their bodies. 17. On 2 August and 11 September 2001 the court held the second and third hearings and took statements from some of the other accused. 18. On 13 June 2001, 26 July 2001, 2 August 2001 and 11 September 2001, the State Security Court refused to release the applicants, relying on the seriousness of the offence and the evidence in the case file. 19. On 1 November 2001, during the fourth hearing before the State Security Court, the first applicant, Rifat[2] Böke, complained that he had been subjected to torture during his detention in police custody and that he suffered from cervical disk syndrome as a result. He denounced the statements that had been taken from him in police custody and contested the accuracy of the medical reports issued in his respect. At the end of the hearing, the court refused to release the applicants, taking into account the nature of the offence and state of the evidence. The court held that the next hearing would be held on 27 December 2001. 20. The applicants filed an objection to the decision for their continued detention. 21. On 20 November 2001 another Chamber of the İzmir State Security Court dismissed the applicants’ objection, holding that the decision for their continued detention was justified. 22. Between 27 December 2001 and 14 May 2002 the İzmir State Security Court held four more hearings. 23. On 14 May 2002 the İzmir State Security Court convicted the applicants of forming a profit-making criminal gang and sentenced them to three years and four months’ imprisonment. In its judgment, the court took into consideration as evidence the arrest report, the report stating that firearms were found in the applicants’ car, the applicants’ statements to the police, the medical reports issued at the end of their detention in police custody, the report containing the details of the telephone calls made by the first applicant, the results of the test showing gunpowder traces on the applicants’ hands and the ballistic reports. The court further noted the past relations between the applicants and the other accused, as well as the hostility between them and one of the persons who had been shot on 14 February 2001. In the light of the evidence in the case file, the State Security Court found it established that the applicants had formed a criminal organisation with a view to making a profit, and that the shooting of the two persons on 14 February 2001 had been a result of the activities of that organisation. Taking into account the total period of the applicants’ pre-trial detention, the court ordered their release. 24. On 5 May 2003 the Court of Cassation upheld the decision of the İzmir State Security Court. C. Criminal proceedings before the Aydın Criminal Court 25. On 14 June 2001 the Aydın Public Prosecutor filed a bill of indictment with the Aydın Criminal Court, charging the applicants with causing grievously bodily harm to third persons. 26. On 4 December 2006 the Aydın Criminal Court acquitted the applicants. The court noted that the persons who had been shot could not identify the applicants as the perpetrators of the shooting. It held that there was insufficient evidence in the case file to conclude that the applicants had been involved in the shooting. D. The first applicant’s allegations of ill-treatment and the related proceedings 27. On 26 February 2001 the applicant met his representative in the Aydın prison. The applicant complained about the ill-treatment he had allegedly suffered in police custody. He asked his representative to secure him a medical examination. 28. On 2 March 2001 the applicant’s representative filed a petition with the İzmir Public Prosecutor’s office, requesting the latter to order the medical examination of both applicants. He alleged that, during the applicants’ detention in police custody, they had been subjected to various forms of ill-treatment, including hanging by the arms, which still caused them pain and had left marks on their bodies. He further stated that the applicants had previously been examined by doctors who had turned a blind eye to these marks and had failed to draft accurate medical reports. He warned that an immediate medical examination was necessary since the traces of ill-treatment risked disappearing. 29. On the same day, the Aydın Public Prosecutor sent a letter to the Aydın Prison Administration, requesting the latter to send the applicants to Aydın State Hospital for medical examinations. He further asked the prison administration to provide him with the medical reports concerning the findings on the applicants’ bodies so that he could verify whether they had been subjected to ill-treatment. 30. On 29 March 2001 the first applicant was taken to a clinic attached to the Aydın Governor’s office. A doctor examined the applicant and drafted a report in which he noted that there was no sign of ill-treatment. He recommended that the applicant undergo a medical examination by a neurologist. 31. On 30 March 2001 a doctor at the Aydın State Hospital drafted a report on the first applicant’s neurological examination. He noted that there were no pathological findings in respect of the applicant. 32. According to the first applicant’s submissions, on the same day, another doctor at the hospital took an x-ray of his neck. The applicant further submitted that the doctor had noted in his report that he was suffering from cervical disk syndrome. The doctor sent the applicant’s x-ray to the Aydın prison. 33. On 4 April 2001 a doctor at the Aydın State Hospital prescribed a hard cervical collar for the first applicant. According to the minutes of the hearing before the Aydın Criminal Court held on 26 July 2001, the applicant appeared before the court wearing the collar. 34. On 10 May 2001 the applicant filed a complaint with the Aydın Public Prosecutor’s office against the police officers who had allegedly ill‑treated him, and the prison authorities, who had failed to arrange his transportation to a hospital for medical examination. He also complained about the doctors who had not examined him in accordance with the regulations and had failed to note his injuries in their reports. 35. On 23 May 2001 a doctor prescribed anti-inflammatory medicine (Tilcotil) for the applicant. 36. On 5 June 2001 the applicant stated before the Aydın Assize Court, within the context of his defence concerning the case brought against him before the İzmir State Security Court (see paragraph 14 above), that he had been subjected to torture and had suffered from severe pain in his neck as a result. He further maintained that he could not receive appropriate medical treatment since he was detained. 37. On 23 October 2001 the Aydın Public Prosecutor issued a decision to discontinue the criminal proceedings against the police officers since no sign of ill-treatment had been detected on the applicant’s person. In his decision, the public prosecutor relied exclusively on the medical reports issued in respect of the applicant on 15, 16 and 21 February 2001 and the medical report issued during the investigation. 38. On 9 January 2002 Mr Böke filed an objection with the Nazilli Assize Court against this decision. He maintained that he had worn a cervical collar for three weeks. He further contended that the cervical X-ray, the medical report diagnosing him with cervical disk syndrome and the prescriptions had not been given to him. Nor had they been included in the investigation file. 39. On 5 February 2002 the Nazilli Assize Court dismissed the applicant’s objection. The court considered that the decision to discontinue the proceedings was justified given the lack of sufficient evidence capable of substantiating the applicant’s allegations of ill-treatment. II. RELEVANT LAW AND PRACTICE 40. A full description of the law and practice at the relevant time may be found in Batı and Others v. Turkey, (nos. 33097/06 and 57834/00, §§ 95-99, ECHR 2004-IV (extracts)) and in Salduz v. Turkey ([GC], no. 36391/02, §§ 27-31 and 37-44, 27 November 2008). THE LAW I. JOINDER 41. In view of the similarity of the applications, the Court deems it appropriate to join them. II. ALLEGED VIOLATION OF ARTICLE 3 OF THE CONVENTION IN RESPECT OF RIFAT BÖKE 42. In application no. 26968/02, the first applicant, Rifat[3] Böke, complained that he had been subjected to torture during his detention in police custody in breach of Article 3 of the Convention. He further complained under Articles 6 and 13 of the Convention that the domestic authorities had failed to conduct an effective investigation into his allegations. The Court finds it appropriate to examine these complaints under Article 3 of the Convention alone. Article 3 reads as follows: “No one shall be subjected to torture or to inhuman or degrading treatment or punishment.” A. Admissibility 43. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 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 responsibility of the respondent State in the light of the substantive aspect of Article 3 of the Convention 44. The applicant submitted that he had been subjected to torture in police custody. In particular, he was subjected to “Palestinian hanging” and his head and neck had been pulled back, which resulted in the cervical disc syndrome from which he suffered. The applicant further submitted that prior to his detention in police custody he had not suffered from this illness, and the fact that he had been prescribed a cervical collar and anti-inflammatory medicine was proof of the accuracy of his allegations. He alleged that the medical reports according to which there were no signs of physical violence on his person had not reflected the truth. The applicant finally submitted that the Government had failed to submit his hospital records and x-rays, although requested to do so by the Court. 45. The Government contended that there had been no evidence demonstrating that the cervical disc syndrome from which the applicant allegedly suffered occurred during his detention in police custody. 46. The Court reiterates that allegations of ill-treatment must be supported by appropriate evidence (see, in particular, Tanrıkulu and Others v. Turkey (dec.), no. 45907/99, 22 October 2002). To assess this evidence, the Court adopts the standard of proof “beyond reasonable doubt”, but adds that such proof may follow from the coexistence of sufficiently strong, clear and concordant inferences or of similar unrebutted presumptions of fact (see, among many others, Labita v. Italy [GC], no. 26772/95, § 121, ECHR 2000-IV; Süleyman Erkan v. Turkey, no. 26803/02, § 31, 31 January 2008). 47. In the present case, the Court notes at the outset that the first applicant consistently maintained his allegations of ill-treatment, in detail, not only when he complained to the national authorities but also in his submissions to the Court. However, neither of the medical reports, issued in his respect and submitted to the Court, indicate that the applicant had signs of ill-treatment on his person. 48. Nevertheless, the Court cannot but note that the medical reports submitted to the Court lack detail and fall significantly short of both the standards recommended by the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT), which are regularly taken into account by the Court in its examination of cases concerning ill-treatment (see, inter alia, Akkoç v. Turkey, nos. 22947/93 and 22948/93, § 118, ECHR 2000‑X), and the guidelines set out in the Manual on the Effective Investigation and Documentation of Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, “the Istanbul Protocol”, submitted to the United Nations High Commissioner for Human Rights (see Batı and Others, cited above, § 100). As such, the Court considers that the medical reports in question cannot be relied on as evidence for proving or disproving that the applicant was ill-treated (see Mehmet Eren v. Turkey, no. 32347/02, §§ 40-42, 14 October 2008, and Gülbahar and Others v. Turkey, no. 5264/03, § 53, 21 October 2008)[4]. 49. The Court further considers that no weight can be attached to the other documents submitted to the Court by the first applicant, namely the prescriptions for anti-inflammatory medicine and the cervical collar, as evidence of ill-treatment since they are not supported by any medical opinion linking the prescriptions to the alleged ill‑treatment. The Court also observes, in this connection, that the Government did not submit the applicant’s hospital records and X-rays, as pointed out by the applicant. Yet, even assuming that this evidence actually exist, the Court is of the view that without a medical report containing the diagnosis and a possible link between the illness allegedly suffered by the applicant and the alleged ill-treatment, no decisive importance could be attributed to the hospital records and the X‑rays. 50. In the light of the above considerations and in the absence of any decisive evidence in support of the first applicant’s allegations, the Court cannot find beyond all reasonable doubt that the applicant was subjected to ill-treatment. The Court is therefore led to conclude that there has been no violation of Article 3 of the Convention under its substantive limb. 2. The responsibility of the respondent State in the light of the procedural aspect of Article 3 of the Convention 51. The applicant alleged that there had not been an effective investigation into his allegations of ill-treatment. In particular, the Aydın Public Prosecutor did not take statements from the other suspects who had been in police custody or the police officers who had been on duty at the material time. 52. The Government during his detention in custody at the police headquarters submitted that the domestic authorities had fulfilled their obligation to conduct an effective investigation into the applicant’s allegations. They contended that the Aydın Public Prosecutor had decided to end the investigation as none of the medical reports indicated any injury on the applicant’s person. 53. The Court reiterates that Article 3 of the Convention requires the authorities to investigate allegations of ill-treatment when they are “arguable” and “raise a reasonable suspicion” (see, in particular, Ay v. Turkey, no. 30951/96, §§ 59-60, 22 March 2005). One of the minimum standards of effectiveness defined by the Court’s case-law is that the competent authorities act with exemplary diligence and promptness (see, for example, Çelik and İmret v. Turkey, no. 44093/98, § 55, 26 October 2004). 54. In the present case, the Court has not found it proved, on account of a lack of evidence, that the first applicant was ill-treated. Nevertheless, as it has held in previous cases, that does not preclude his complaint in relation to Article 3 from being “arguable” for the purposes of the positive obligation to investigate (see, mutatis mutandis, Yaşa v. Turkey, judgment of 2 September 1998, Reports of Judgments and Decisions 1998-VI, § 112). In reaching this conclusion the Court has had particular regard to the consistency of the first applicant’s allegations both when he approached the national authorities and in his submissions to the Court. An effective investigation was therefore required. 55. The Court observes, at the outset, that a preliminary investigation was indeed conducted by the Aydın public prosecutor. However, the Court is not persuaded that this investigation was conducted either diligently or, in other words, that it was “effectively”. 56. In this connection, the Court notes that the applicant asked his representative to secure him a medical examination on 26 February 2001 and his representative applied to the public prosecutor’s office to that effect on 2 March 2001. However, although the Aydın Public Prosecutor requested the prison authorities to send the applicant to the State hospital for medical examinations on the same day, the applicant was not able to undergo a medical examination until 29 March 2001; it took the prison authorities 27 days to carry out the public prosecutor’s order. The Court has already held that the authorities must act as soon as an official complaint has been lodged in cases involving allegations of torture or ill-treatment (see Batı and Others, cited above, § 133) since a prompt response by the authorities in investigating such complaints 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 Abdülsamet Yaman v. Turkey, no. 32446/96, § 54, 2 November 2004). The Court finds that the prison authorities’ inactivity for almost four weeks, when it came to securing the applicant’s medical examination, does not comply with the requirement of “promptness” having regard, in particular, to its possible consequences, such as the disappearance of the traces of the alleged ill‑treatment. 57. The Court further observes that the Aydın Public Prosecutor relied solely on the medical reports issued on 15, 16 and 21 February 2001 and the medical report issued during the investigation. Nor did the Prosecutor question the police officers who had been on duty during the applicant’s detention in the Aydın police headquarters, the other detainees or the applicant himself. The Prosecutor also failed to take into account the evidence submitted by the applicant, namely the prescriptions for anti-inflammatory medicine and the cervical collar, or address the contradiction between the medical report of 30 March 2001 and the prescription of 4 April 2001. 58. In the light of the above, the Court concludes that the applicant’s allegations of ill-treatment were not effectively investigated by the domestic authorities as required by Article 3 of the Convention. 59. There has accordingly been a violation of Article 3 under its procedural limb. III. ALLEGED VIOLATIONS OF ARTICLE 5 § 3 OF THE CONVENTION 60. In application no. 71912/01, the applicants complained under Article 5 § 3 of the Convention that they had been held in police custody for seven days without being brought before a judge or other officer authorised by law to exercise judicial power. In their submissions dated 13 December 2001 in the same application, the applicants further contended under the same head that the length of their detention pending trial had been excessive. A. As regards the applicants’ detention in police custody 61. The Government submitted that the applicants had failed to invoke Article 5 of the Convention before the domestic authorities or challenge the decision to extend their custody. The Court has already examined and rejected the Government’s preliminary objection in similar cases (see, for example, Öcalan v. Turkey [GC], no. 46221/99, §§ 66-71, ECHR 2005-...). The Court finds no particular circumstances in the instant case which would require it to depart from this jurisprudence. It therefore finds that this part of the application is admissible. 62. As regards the merits of this complaint, the Court observes that the applicants’ detention in police custody lasted seven days. It reiterates that, in the case of Brogan and Others v. the United Kingdom (29 November 1988, § 62, Series A no. 145 B), it found that detention in police custody which had lasted four days and six hours without judicial control fell outside the strict time constraints of Article 5 § 3 of the Convention. In the light of the principles enunciated in the Brogan case, the Court cannot accept that it was necessary to detain the applicants for seven days without judicial intervention even if the activities of which the applicants stood accused were serious. There has accordingly been a violation of Article 5 § 3 of the Convention. B. As regards the applicants’ detention on remand 63. The Government submitted that this complaint should be rejected for failure to exhaust domestic remedies as required by Article 35 § 1 of the Convention. The Government argued that the applicants could have, pursuant to Article 128 of the former Code of Criminal Procedure, challenged the length of their detention in police custody. They further maintained that the applicants could have sought compensation pursuant to Law no. 466 on the Payment of Compensation to Persons Unlawfully Arrested or Detained. 64. The Court recalls that it has already examined and rejected the Government’s preliminary objections in similar cases (see, for example, Karatay and Others v. Turkey, no. 11468/02, § 35, 15 February 2007; Bayam v. Turkey, no. 26896/02, § 16, 31 July 2007). The Court finds no particular circumstances in the instant case which would require it to depart from this jurisprudence. As a result, it rejects the Government’s preliminary objections. 65. However, the Court considers that this part of the application is inadmissible for the following reasons. 66. The Court notes that the applicants’ detention on remand began on 14 February 2001, when they were arrested, and ended on 14 May 2002, when the first-instance court convicted them and ordered their release, having regard to the total amount of time they had spent in detention. The period to be taken into consideration thus lasted fifteen months. 67. The Court observes in this connection that the İzmir State Security Court considered the applicants’ continued detention at the end of each hearing, either of its own motion or at the applicants’ request. The Court further observes that the offence for which the applicants and eleven other suspects were charged was of a serious nature, since it concerned forming a criminal organisation. Having regard to the complexity of the case and the serious nature of the offence of which the applicants were charged and later convicted, the Court finds that the reasons given by the national courts for refusing release were relevant and sufficient to justify the applicants’ continued detention for fifteen months, in particular having regard to the evidence in the case file (see paragraph 6 and 12 above). Accordingly, it concludes that the length of time in detention was not unreasonable. 68. It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention. IV. ALLEGED VIOLATION OF ARTICLE 6 § 3 (c) OF THE CONVENTION 69. In application no. 36397/03, the applicants alleged that their defence rights had been violated as they had been denied access to a lawyer during their detention in police custody. They relied on Article 6 § 3 (c) of the Convention. 70. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible. 71. As regards the merits, the Court reiterates that it has already examined the same grievance in the case of Salduz v. Turkey and found a violation of Article 6 § 3 (c) of the Convention in conjunction with Article 6 § 1 (cited above, §§ 56-62). The Court has examined the present case and finds no particular circumstances which would require it to depart from its findings in the aforementioned Salduz judgment. 45. There has therefore been a violation of Article 6 § 3 (c) of the Convention in conjunction with Article 6 § 1 in the present case. the Court refers to its judgment in the case of Salduz v. Turkey ([GC] no. 36391/02, §§ 45-63 27 November 2008) and finds a violation of Article 6 § 3 (c) of the Convention in conjunction with Article 6 § 1 of the Convention for the reasons set out therein. V. OTHER ALLEGED VIOLATIONS OF THE CONVENTION A. Alleged violations of Articles 5 and 6 of the Convention 72. The applicants complained under Article 5 § 5 of the Convention that they had not had a right to compensation in respect of the length of their detention in police custody and pending trial. They further alleged under Articles 6 §§ 1 and 2 that the İzmir State Security Court had not been an independent and impartial tribunal in that it had relied on unlawful evidence, such as the illegal recording of their telephone conversations and statements which had been taken from them under duress, added to the case file by the public prosecutor, and that it had convicted them without awaiting the judgment of the Aydın Criminal Court. They submitted under Article 6 § 3 (b) and (d) of the Convention that their detention in Aydın prison had deprived them of the opportunity to contact their lawyer easily and that the State Security Court had not given them the opportunity to comment on the illegal telephone recordings submitted by the prosecution. The applicants further alleged under Article 7 of the Convention that their conviction had been unlawful as it had been based on insufficient evidence. 73. Having regard to the facts of the case, the submissions of the parties and its finding of a violation of Articles 5 § 3 and 6 § 3 (c) of the Convention above (see paragraphs 62 and 71 above), the Court considers that it has examined the main legal questions raised under Article 5 and 6 in the present case. It concludes therefore that there is no need to make a separate ruling on the applicants’ remaining complaints under these provisions (see Yalçın Küçük v. Turkey (no. 3), no. 71353/01, § 40, 22 April 2008; Kamil Uzun v. Turkey, no. 37410/97, § 64, 10 May 2007; Getiren v. Turkey, no. 10301/03, § 132, 22 July 2008). B. Alleged violations of Article 8 of the Convention and Article 1 of Protocol No. 1 74. The applicants contended under Article 8 of the Convention that their telephone conversations and their conversations during their detention in police custody had been illegally recorded. They finally complained under Article 1 of Protocol No. 1 about the seizure of their car and mobile telephones by the national authorities. 75. In the light of all the material in its possession, the Court finds that the above submissions by the applicants do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that these complaints must be declared inadmissible as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention. VI. APPLICATION OF ARTICLE 41 OF THE CONVENTION 76. 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 77. The first applicant claimed 25,000 euros (EUR) and the second applicant claimed EUR 15,000 in respect of non-pecuniary damage. 78. The Government contested the applicants’ claims. 79. The Court notes that it has found violations of Articles 3, 5 § 3 and 6 § 3 (c) of the Convention in respect of the first applicant, Rifat[5] Böke. As regards the second applicant, Halil Kandemir, it has found violations of Articles 5 § 3 and 6 § 3 (c) of the Convention. The Court considers, on the one hand, that the finding of a violation in respect of Article 6 § 3 (c) constitutes in itself sufficient just satisfaction for any non-pecuniary damage suffered by the applicants. On the other hand, the Court accepts that the non‑pecuniary damage suffered on account of the violations of Articles 3 and 5 § 3 of the Convention cannot be compensated solely by the findings of violations. Making its assessment on an equitable basis, the Court awards Rifat[6] Böke EUR 6,500 in respect of non-pecuniary damage. It also awards Halil Kandemir EUR 1,500 under this head. 80. Furthermore, the Court considers that the most appropriate form of redress would be the retrial of the applicants in accordance with the requirements of Article 6 § 1 of the Convention, should the applicants so request (see, Salduz, cited above § 72). B. Costs and expenses 81. The applicants also claimed EUR 6,000 for the costs and expenses incurred before the domestic courts and the Court. 82. The Government contested their claim. 83. 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 have been actually and necessarily incurred and are reasonable as to quantum. In the present case, the applicants have not substantiated that they have actually incurred the costs claimed. Accordingly, the Court makes no award under this head. C. Default interest 84. 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. Joins the applications; 2. Declares admissible the first applicant’s complaints concerning his alleged ill-treatment and the alleged ineffectiveness of the related investigation, and both applicants’ complaints concerning the length of their detention in police custody and the lack of legal assistance while in police custody; 3. Declares the remainder of the applications inadmissible; 4. Holds that there has been no violation of Article 3 of the Convention under its substantive limb in respect of the applicant Rifat[7] Böke; 5. Holds that there has been a violation of Article 3 of the Convention under its procedural limb in respect of the applicant Rifat[8] Böke; 6. Holds that there has been a violation of Article 5 § 3 of the Convention on account of the length of the applicants’ detention in police custody; 7. Holds that there has been a violation of Article 6 § 3 (c) of the Convention on account of the lack of legal assistance to the applicants while they were in police custody; 8. Holds that there is no need to examine separately the applicants’ other complaints under Articles 5 and 6 of the Convention; 9. Holds (a) that the respondent State is to pay 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 Government at the rate applicable at the date of settlement: (i) EUR 6,500 (six thousand five hundred euros) to Rifat[9] Böke, plus any tax that may be chargeable, in respect of non-pecuniary damage; (ii) EUR 1,500 (one thousand five hundred euros) to Halil Kandemir, plus any tax that may be chargeable, in respect of non‑pecuniary damage; (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; 10. Dismisses the remainder of the applicants’ claim for just satisfaction. Done in English, and notified in writing on 10 March 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Sally DolléFrançoise TulkensRegistrarPresident [1]. The name of Rıfat Böke has been changed to Rifat Böke. [2]. The name of Rıfat Böke has been changed to Rifat Böke. [3]. The name of Rıfat Böke has been changed to Rifat Böke. [4]. These judgments are not final yet. [5]. The name of Rıfat Böke has been changed to Rifat Böke. [6]. The name of Rıfat Böke has been changed to Rifat Böke. [7]. The name of Rıfat Böke has been changed to Rifat Böke. [8]. The name of Rıfat Böke has been changed to Rifat Böke. [9]. The name of Rıfat Böke has been changed to Rifat Böke.

Monday, 21st January 2002 LORD JUSTICE DYSON: This applicant is a Chinese national. He entered the United Kingdom on 12th November 2000 illegally on a forged passport. He claimed asylum on the grounds that he feared persecution under the Chinese government's family planning and one child policy. He was interviewed in the usual way. His claim was rejected by the Secretary of State. He appealed to the adjudicator. On the advice of his then legal representatives he made written submissions, but on their advice did not appear, nor was he represented, before the adjudicator at the hearing. His appeal was dismissed. He was then issued with a "one-stop" notice, but did not state any additional grounds for wishing to enter the United Kingdom: see section 74(4) of the Immigration and Asylum Act 1999. The adjudicator did not find it credible that the applicant would be persecuted on account of the one child policy. The adjudicator said that the applicant's credibility was substantially undermined by his immigration history and identified a number of factors in the account given by the applicant which, she said, rendered his whole story implausible. On 25th June 2001 he was detained pending his removal from the United Kingdom. On 6th July directions were given for his removal at 16:30 hours on 13th July. On 13th July the applicant's new solicitors wrote to the immigration service. They said that if the applicant were returned to China the applicant's rights under Article 3 of the European Convention on Human Rights would be violated. They put forward two new asylum grounds for the Secretary of State to consider. First, the applicant had incurred a debt of the equivalent of £23,000, borrowing money from loan sharks in order to finance his journey to the United Kingdom. It was said that on his return to China he would be unable to repay this sum and would not be protected by the Chinese authorities from brutal treatment at the hands of the loan sharks. That was the first ground of feared persecution. The second was that he would face imprisonment and a fine for illegally leaving China in the first place. The Secretary of State responded on the same day. Having referred to the findings made by the adjudicator about the applicant's credibility, the Secretary of State wrote as follows: "Both the Secretary of State and a special adjudicator found serious issues of credibility that went against your client and this throws into doubt the credibility of the issues that have only been raised in your letter of yesterday, some 24 hours before he was due to be removed. The Secretary of State has also drawn his attention to the China country assessment produced by his own Country Information and Policy Unit. At paragraph 6.102 it says; `The experts have found no cases of harassment of deportees by snakeheads upon return, but have also stated that any harassment is unlikely to be reported to the authorities, on the grounds of being involved in a crime ... in the first place. Another expert has pointed out that harassing returnees is "bad for business" and deters prospective customers.' At paragraph 6.105 the report says; `The act of exiting mainland China without permission is an offence, and if this is the only unlawful act committed by the emigrant, then they are punished under Article 14 of the law of the People's Republic of China on the Exit and Entry of Citizens (1986) and thus "may be given a warning or placed in detention for not more than ten days by a public security organ.' It continues at paragraph 6.107: `One expert noted that the Chinese government does not generally mistreat returnees, unless the person has been deported to China more than once. If a returnee is held to be involved in the smuggling operation, then they are subject to the criminal procedure law.' Notwithstanding the doubts the Secretary of State has regarding your client's credibility he is also satisfied that Article 3 would not be breached by your client's return to China. He is also firmly of the opinion that these are issues that could have been raised either for consideration by him or at the appeal before the special adjudicator. Given the lateness of the representations the Secretary of State is certifying your client's claim under section 73(8) of the Immigration and Asylum Act 1999, because he is satisfied that the purpose of making this application is to delay the removal of your client from the United Kingdom and that he had no other legitimate purpose for making it." On behalf of the applicant Mr Juss challenges the lawfulness of the certificate under section 73(8). He submits that the certificate should not have been given so that the applicant should not be shut out from appealing to the adjudicator against the Secretary of State's refusal to grant asylum on the new grounds. He says that the applicant was not asked during his interview how he had financed his journey to the United Kingdom. Had he been asked, he could have mentioned his fear of ill-treatment by the loan sharks; similarly if he had attended the hearing before the adjudicator. He submits that the Secretary of State should have had regard to section 76(3), which envisages in relation to a claim that an act has breached an applicant's human rights that the Secretary of State has to consider whether an applicant who has failed to mention a particular ground has a reasonable excuse for that omission. Finally, he submits that, given the background material available to him about snakeheads in China, the Secretary of State should have concluded on the facts of this case that there was a legitimate purpose for making the application on 13th July, and that the application was not made in order to delay the removal of the applicant from the United Kingdom. In my judgment the Secretary of State was plainly entitled to reach the conclusion that he did. His finding that the purpose of making the application was to delay the applicant's removal and that there was no other legitimate purpose for making it were ones of fact. Mr Juss has shown no arguable error of law made in arriving at those findings. This was a striking case. The applicant claimed asylum on a narrow and specific ground, which was rejected largely on the grounds that he was not believed either by the Secretary of State or the adjudicator. He was given at least two opportunities to say whether he had any other grounds for claiming asylum: first, at the interview and, secondly, in response to the "one-stop" notice. He took neither opportunity and then, only on the very day (or possibly the day before the day) on which he was to be removed from the United Kingdom, he advanced two wholly new grounds. In my judgment, it would have been surprising indeed if the Secretary of State had arrived at any other decision than the one he reached. Mr Juss refers to section 76(3), and submits that the Secretary of State misdirected himself by failing to take the provisions of that subsection into account. In my judgment Scott Baker J was right to hold that section 76(3) was irrelevant to his consideration at this stage. It seems to me that section 76(3) is a provision which applies in relation to appeals and provides exceptions to the rule in section 76(2) that an applicant may not rely on a ground in an appeal unless that ground has been mentioned in his statement. But whether that is right or not, it seems to me that the view that was reached by the Secretary of State on the facts was unassailable. I would reject this renewed application. LORD JUSTICE LONGMORE: I agree. Order: Application dismissed. Legal aid assessment of the applicant's costs.

S. VERMA, J. These appeals by special leave are against the judgment dated 5.2.1976 in Tax Revision Case Nos. 18 and 19 of 1975, by the High Court of Andhra Pradesh. The two question answered by the High Court relate to the assessment years 1968-69 and 1969-70 which are Whether dry cell batteries manufactured by the assessees are exigible to tax under Entry No. 3 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957? Whether the arc carbons manufactured by the assesses are exigible to tax under Entry No. 4 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957? The Tribunal held that the dry cell batteries are taxable under Entry No. 38 except only those which are specified for use in transistors, which alone are taxable under Entry No. 3 and the arc carbons are taxable under Entry No. 4. The revisions filed by the assessee have been dismissed by the High Court. Hence these appeals by special leave. The companynected matters are similar and are disposed of in terms of this judgment. The relevant entries with reference to which the above questions are to be decided, Wireless reception At the point 12 paise instruments and apparatus, of first sale in the radios,and radio hones, in the state rupee electrical valves, accumulators, amplifiers and loud-speakers and spare parts and accessories thereof. b . Cinematographic equipment -do- 12 paise including cameras, projectors in the and sound recording and rupee reproducing equipment lenses, film and parts and accessories required for use therewith. All electrical goods, -do- 8 paise instruments, apparatus and in the appliances including fans rupee and lighting bulbs electrical earthenware and procelain and all other accessories. The assessee companytends for taxing of these articles at the lower rate under Entry No. 38 and number at the higher rate under Entry Nos. 3 or 4. We shall first companysider the question relating to arc carbons. The only argument on behalf of the assessee is that the carbon is used up and, therefore, it cannot be an accessory of the equipment specified in Entry No. 4. On this basis, the assessee claims that arc carbon used in the equipment is taxable under Entry No. 38 at a lesser rate. The High Court following its earlier decision held that arc carbons manufactured by the assessee were assessable under Entry No. 4 and number Entry No. 38. That view of the Andhra Pradesh High Court has been approved by this Court in Annapurna Carbon Industries Co. vs. State of Andhra Pradesh, 1976 37 S.T.C. 378, and it was held that arc carbons fell within Entry No. 4 of the First Schedule to the Act. It was held by this Court that The meaning of this entry can only be satisfactorily determined in the light of language of the entry itself companysidered in the companytext in which it occurs. The entry No. 4 occurs in a schedule in which descriptions of goods to be taxed indicate that the expression required for use therewith has been employed for equipment or accessories companynected with the main purpose. For instance, in entry No. 5, the expression occurs at the end as follows Photographic and other cameras and enlargers, lenses, films and plates, paper and cloth and other parts and accessories required for use therewith. Apparently, the deciding factor is the predominant or ordinary purpose or use. It is number enough to show that the article can be put to other uses also. It is its general or predominant user which seems to determine the category in which an article will fall. Again entry No. 3 for wireless reception instruments and apparatus includes electrical valves, accumulators, amplifiers and loud-speakers and spare parts and accessories thereof. The words Parts thereof are used in several entries, such as entry No. 6 for clocks, timepieces and watches, entry No. 10 for dictaphones and other similar apparatus for recording sound and entry No. 11 for sound transmitting equipment such as telephones and loudspeakers. Our object in indicating the nature of entries, amidst which entry No, 4 occurs is to show that some precision has been attempted in making the entries. When it was intended to companyfine the entry to particular gadgets and parts thereof the entry said so. Of companyrse, even where an entry relates to parts manufactured for use for a particular kind of instrument or gadget only, the article, manufactured to serve as a part of a particular kind of apparatus would number cease to be companyered by the intended entry simply because a purchaser makes some other use of it. We have to find the intention of the framers of the schedule in making the entry in each case. The best guide to their intentions is the language actually employed by them. We find that the term accessories is used in the schedule to describe goods which may have been manufactured for use as an aid or addition. A sense in which the word accessory is used is given in Websters Third New International Dictionary as follows an object or device that is number essential in itself but that adds to the beauty, companyvenience, or effectiveness of something else. Other meanings given there are Supplementary or secondary to something of greater or primary importance additional any of several mechanical devices that assist in operating or companytrolling to tone resources of an organ. Accessories are number necessarily companyfined to particular machines for which they may serve as aids, The same item may be an accessory of more than one kind of instrument. It will be numbericed that the entry we have to interpret includes parts as well as accessories which are required for use in projectors or other cinematographic equipment. We think that The Andhra Pradesh High Court companyrectly held that the main use of the are carbons under companysideration was duly proved to be that of production of powerful light used in projectors in cinemas. The fact that they can also be used for searchlights, signaling, stage lighting, or where powerful lighting for photography or other purposes may be required, companyld number detract from the classification to which the carbon arcs belong. That is determined by their ordinary or companymonly known purpose or user. This, as already observed by us, is evident from the fact that they are known as cinema are carbons in the Market. This finding was enough, in our opinion to justify the view taken by the Andhra Pradesh High Court that the goods under companysideration are companyered by the relevant entry No. 4. emphasis supplied at pages 380-81 A plea on behalf of the assessee for reconsideration of the decision of this Court in Annapurna Carbon Industries Co. supra was made. We find numberground to accept that submission. We may add that the decision has held the field for all these years and we do number find any reason to doubt the companyrectness of that decision. It must, therefore, be held that the decision of the High Court that arc carbons are taxable under Entry No. 4 of the First Schedule to the Act does number call for any interference. We number companysider the question relating to dry battery cells. The matters involving this question are of two broad categories. One category relates to the period prior to certain amendments made in the Act in 1976 while the other category of matters relates to the period subsequent to that amendment. For the period prior to the 1976 amendment, the dry cell batteries only of Union Carbide India Ltd. which bore on it the mark for transistors were held to be taxable under Entry No. 3 at a higher rate while the multipurpose dry cell batteries of all the assessees which did number bear any such mark were held to be taxable at the lesser rate under Entry No. 38. Accordingly, for the period prior to 1976, the only aggrieved assessee is the Union Carbide India Ltd. in respect of its batteries bearing the mark for transistors which were assessed at the higher rate under Entry No. 3 while the State is aggrieved by assessment of the remaining dry cell batteries of all assessees under Entry No. 38. For this reason, there are cross appeals by the Union Carbide India Ltd, and the State relating to the period prior to 1976 amendment. For the post-1976 period, the High Court has held that all dry cell batteries, after the amendments in the Act, are taxable only under Entry No. 38. Accordingly, the State alone has preferred the appeals in this behalf for the post- 1976 period. All the appeals are companysidered together since they involve for decision the companymon question of taxability of dry cell batteries. The companytention of the learned companynsel appearing for the assessee is that the dry cell batteries are taxable only under Entry No. 38 for the entire period. On the other hand, the companytention on behalf of the State Government is that all such batteries are taxable throughout only under Entry No. 3. In the alternative, it was urged that after the 1976 amendment effective from 1.9.1976, the dry cell batteries are taxable under Entry No. 137 as it then stood but number under Entry No. 38. It was submitted that Entry No. 3 is attracted because dry cell batteries are accessories of wireless reception instruments etc. even if number accumulators and that it is number accessories of electrical goods due to which Entry No. 38 is excluded. In short, the companytention on behalf of the State is that a dry cell battery is either an accumulator or storage battery or an accessory of wireless reception instruments etc. to fall under Entry No. 3 throughout or Entry No. 137 w.e.f. 1.9.1976 but number an accessory of electrical goods to fall under Entry No. 38. The question for decision, therefore, is whether the view taken that dry cell batteries fall within Entry No.38 is incorrect on the grounds urged by the State. Only in respect of Union Carbide India Ltd,. for the pre-1976 period, the question also is Whether the dry cell batteries marked for transistors were wrongly assessed to be taxable under Entry No, 3 instead of Entry No.38? At this stage, the relevant entries as they stood after the amendment made in 1976 and 1985 may also be quoted With effect from 1.9.1976- Wireless reception At the point 12 paise instruments and apparatus, of first sale in the radios and radio in the state rupee gramophones, electrical valves, accumulators, amplifiers and loudspeakers and spare parts and accessories thereof. 1003 All kinds of electrical -do- 8 paise goods, instruments, apparatus in the and appliances that is to say - rupee Wires, holders, plugs, switches, electrical earthenware and porcelain ware Casings, cappings, reapers, bends, junction boxes, meter-boxes, switch boxes, meterboards and switch boards other those made of wood Electrical fans, lighting bulbs, torches, fluorescent tubes and their fittings, like chokes and starters and other parts and accessories thereof, Electrical grinders, mixers, blenders, hair driers, shavers, washing machines companyking ranges, boilers, ovens,geysers, generators, transformers and parts and accessories thereof, Electronic systems, instruments apparatus, appliances including electronic cash registering indexing cardpunching, franking and addressing machines, companyputers of analog and digital varieties, one record units, oscilloscopes and other electronic equipment and material and parts and accessories thereof 1038 Electrical storage At the point 12 paise batteries and parts of first in the thereof of including sale in the rupee companytainers, companyers and plates 1137 state With effect from 1.7.1985-- Dry batteries or cells At the point 10 paise and parts and accessories of first in the thereof . sale in the rupee Rate of tax on item 152 reduced from 11 paise to 10 paise and the bracked words added by G.O.Ms.No.630, Rev., dt.30.5.1986 w.e.f. 1.6.1986 and later by Act 19 of 1986 w.e.f. 1.8.1986 The subsequent amendments show that with Entry No. 152 specifically providing for dry batteries or cells while Entry No. 3 remained the same, since then dry batteries or cells cannot companye under Entry No. 3 in view of the specific Entry No. 152. The question is whether prior to the specific provision being made in Entry No. 152 for dry batteries or cells, Entry No. 3 had to be preferred or it was Entry No. 137 w.e.f 1.9.1976 which included dry batteries or cells. To companye under Entry No. 137 which is the alternative argument advanced on behalf of the State Government, dry batteries or cells must fall within the meaning of storage battery and for attracting Entry No. 3 it must fall within the expressions accumulators or accessories thereof, We shall presently show that dry batteries or cells arc number storage batteries or accumulators. The real question therefore would be whether they can be called accessories of wireless reception instruments etc. to fall within Entry No. 3. This is because the expression is accessories thereof. In Hamlyn All-Colour Science Encyclopedia the accumulators are described as The accumulator does number make electricity in the way that the dry battery does. Electricity has to be put in before any can be taken out. The same amount of electricity can be obtained from an accumulator as was put into it. On the other hand dry batteries are called a primary cell which is different from an accumulator, secondary cell or storage battery. In Chambers Science and Technology Dictionary, accumulator is defined as Voltaic cell which can be charged and discharged. On charge, when an electric current is passed through it into the positive and out of the negative terminals according to the companyventional direction of flow of current , electrical energy is companyverted into chemical energy. The process is reversed on discharge, the chemical energy, less losses both in potential and current, being companyverted into useful electrical energy, Accumulators therefore form a useful portable supply of electric power, but have the disadvantages of being heavy and of being at best 70 efficient. More often known as battery, also called reversible cell, secondary cell, storage battery and storage battery is mentioned to be the same as an accumulator. Primary cells and primary batteries or dry batteries or cells are understood in companymon parlance as well as in technology to be different from accumulators or storage cells. In The New Encyclopedia Britannica, Vol.1, at page 963 , it is stated that, There are two major type of voltaic cells primary batteries and secondary, or storage, batteries. The latter are sometimes also called accumulators. Primary cells are companystructed in such a way that only one companytinuous or intermittent discharge can be obtained. Secondary devices, on the other hand, are companystructed so that they can be discharged and then recharged to approximately their original state. The charging process is the reverse of the discharge process therefore, the electrode reactions in these batteries must be reversible. Primary batteries are defined as Several varieties of primary cells are available. These include dry, wet, and solid electrolyte. Dry cells are number actually dry but companytain an aqueous electrolyte that is unspillable or immobilized. Many of these cells are sealed to prevent seepage of the electrolyte or reaction products. Common examples of such primary batteries arc acidic dry cells e.g. carbon-zinc cells , used in flashlights, toys, and certain transistorized portable radios alkaline dry cells, employed in cameras, tape records, and electric razors, and mercury cells, utilized in aids and photographic flash guns. and Secondary batteries are defined as Such batteries companysist of an assemblage of several identical voltaic cells. Of the various types of storage batteries available, the lead-acid type is the most widely used. It serves as the power source for the electrical systems of many kinds of motor vehicles, particularly automobiles and trucks. It is also companymonly used to provide electricity for emergency lighting and companymunication circuits For this reason, dry batteries or cells cannot be treated as storage batteries for the purpose of Entry No. 137 or accumulators for the purpose of Entry No. 3. The expression accessories thereof in Entry No. 3 indicates that Entry No. 3 can be attracted only if the dry batteries or cells can be treated as accessories of the wire reception instruments etc. specified in Entry No. 3 or else they would fall under Entry No. 38 as other accessories of all electrical goods being the residuary entry. The dry cells or batteries marked for use in transistors as is the case of some such batteries manufactured by the Union Carbide India Ltd. alone during the pre1976 period, may fall under Entry No. 3 as held by the High Court. However, multi-purpose batteries, number specified for use in transistors alone cannot be treated as accessories thereof of wireless reception instruments etc. for the purpose of Entry No. 3. In Annapurna Carbon Industries Co. significance is attached to use of the word thereof and it was indicated that the deciding factor is the predominant or ordinary purpose or use and it is number enough to show that the articles can be put to other uses also. It was held therein that the general or predominant user seems to determine the category in which an article will fall. On a companyparison made between the different entries in which the term accessories is used in the Schedule to describe goods, it was shown that the word was companystrued taking into account the fact whether the goods have been manufactured for use as an aid or addition to any of the specified articles in that entry or number. It was also pointed out that when it was intended to companyfine the entry to particular gadgets and particulars thereof, the entry said so and, therefore, the expresssion accessories thereof must mean the general or predominant user of the article only as an accessory of one of the specified items mentioned in that entry Applying a test, it cannot be held that dry batteries or cells which were number marked for transistors and were multi-purpose cells were manufactured for predominant use as accessories of the wireless reception instruments etc. to fall under Entry No. 3 SD that they companyld number be treated as other accessories of all electrical goods for the purpose of attracting Easy No. 38. At this stage it is also useful to refer to a clarification made by the Board of Revenue by a circular dated 7-1.1977 which reads as follows P.Rt.No.29/1977 Board of Revenue T. Hyderabad D7-1-1977 Shri A. Krishnaswamy , I.A.S., Commissioner of Commercial Taxes. Sub - Andhra Pradesh General Sales Tax Act, 1957 Rate of tax on dry battery cells Clarification issued. Ref.- Representation dated 27.9.1976 from M s Indo National Limited, Nellore- The trade has requested the Board to clarify be rue of tax applicable to dry battery cells. battery cells. The Board has examined the issue and is of the view that dry battery cells would be of two types 1 . Those labelled for a special use such as transistor batteries. The rate of tax would depend on the rate leviable on the goods for which they are labelled as being an accessory. In the case of transistor batteries, they would be subjected to tax as accessories of radious Those that are number labelled for special use, such dry cells would be liable 1st Schedule to the Andhra Pradesh General Sales Tax Act 1957, i.e. Electrical Goods liable to tax at 8 at the point of 1st sale in the State. Sdt T.Jesudenam Asstt. Commissioner CT at page 120 from paperbook of C.A.Nos.4537- 39/1986 The above circular is of significance to indicate the manner in which these entries were understood and companystrued even by the Department which is in accord with the companystruction made of the entries by the High Court.

Uday Umesh Lalit, J. This appeal by Special Leave challenges the judgment and order dated 25.04.2006 of the High Court of Judicature of Andhra Pradesh at Hyderabad in Criminal Appeal No.27 of 2001 setting aside the judgment and order of companyviction dated 29.12.2000 of the Special Judge for SPE ACB Cases, Vijayawada in CC No.4 of 1996. One P. Ramakrishna Rao i.e. PW1 wanted to start a Kirana and General Stores at Gudivada and had submitted an application on 22.05.1995 with necessary enclosures in the office of the Deputy Commercial Tax Officer No.1, Gudivada seeking issuance of registration certificate. The application was forwarded to the respondent who, as Assistant Commercial Tax Officer No.1, Gudivada, District Krishna, was companypetent to issue registration certificate under the Sales Tax Act. In this companynection PW1 met the respondent in his office on 16.06.1995 and requested him to issue registration certificate, at which time the respondent allegedly demanded Rs.1000/- as bribe. PW1 then went along with PW2 K.B. Narayana to meet the respondent on 22.06.1995 and requested for issuance of the certificate. On that day PW1 also furnished additional National Savings Bond in the sum of Rs.500/- as per directions of the respondent. The respondent after accepting the same reiterated his demand. It is alleged that on 23.06.1995 PWs1 and 2 again went to the office of the respondent and repeated the request for issuance of registration certificate. The respondent allegedly informed PW1 that the registration certificate was ready and would be delivered upon payment of bribe of Rs.1000/- as demanded. The respondent also instructed PW1 to produce the Day Book duly written upto 24.06.1995 for affixing his signature. When PW1 expressed his inability, the bribe amount was reduced to Rs.500/-. PW1 along with PW2 thereafter went to the office of the respondent on 01.07.1995 and made the request for registration certificate. The respondent allegedly repeated his demand and PW1 reluctantly agreed to pay the amount. At this stage PW1 presented a report Ext.P1 on 01.07.1995 at 4.00 PM in the office of the Anti Corruption Bureau to PW8 N. Prasad, District Inspector ACB, Vijayawada, who in turn submitted it to PW9 DVSS Murthy, DSP, ACB, Vijaywada. PW9 registered the same as FIR and decided to lay a trap. On 05.07.1995 PW9 companyducted pre-trap proceedings Ext P23 in the presence of PWs1, 2 and the mediators during which time five currency numberes of Rs.100/- each produced by PW1 were treated with Phenolphthalein powder and kept in the empty shirt pocket of PW1. Thereafter on the same day at about 12.25 PM PW1 along with PW2 met the respondent in his office and upon being asked by the respondent, PW1 informed the respondent that he had brought the bribe amount of Rs.500/-. On the instructions of the respondent, PW4 Attender E. Kanakam affixed the rubber stamp on the registration certificate and handed over the same to the respondent, who then instructed PW4 to go away. Thereafter PW1 offered to give Rs.500/-as demanded earlier. The respondent asked PW1 to give him Rs.400/- only which amount was so given by PW1 and received by the respondent with his left hand. The respondent kept the amount on the papers lying on his office table. The respondent then called one K. Viswanadham, Junior Assistant dealing with registration work and on his directions PW1 paid the balance amount of Rs.100/- to said Viswanadham, who received the same and went back to his seat. The respondent thereafter took the Day Book Ext. P9 from PW1 and affixed his signature putting the date as 23.06.1995 and returned the same to PW1. The registration certificate Ext.P8 was then delivered by the respondent to PW1 PW1 thereafter came out of the office leaving PW2 inside the office who kept talking with the respondent. Requisite signal having been given by PW1, PW9 with the raiding party entered the office of the respondent. He companyducted appropriate test on the fingers of the respondent and Viswanadham which turned positive. The amount of Rs.400/- was recovered from the office table of the respondent and Rs.100/- from the almirah in front of the seat of Viswanadham. The numbers of the currency numberes were verified and tallied by the mediators and the post trap proceedings Ext. P24 were reduced to writing by the mediators. After companypleting investigation and obtaining appropriate sanction, charge sheet was filed against the respondent and Viswanadham and charges under Sections 7, 13 2 read with 13 1 d ii of the Prevention of Corruption Act, 1988 hereinafter referred to as the Act were famed against them. In support of its case the prosecution examined ten witnesses and marked thirty six documents. In defence, the respondent and Viswanadham filed their statements in writing. The respondent stated that he had never demanded and received the bribe from PW1 and that the trap proceedings dated 05.07.1995 were stage managed at the instance of one Hanumantha Rao, a tax companysultant. It was submitted that PW1 had clandestinely put currency numberes on the papers lying on his table and when PW9 entered the office he directed the respondent to pick up those numberes and to give them to one of the officials present with him and that he had accordingly picked up said numberes with his left hand. It was submitted that the registration certificate of PW1 was approved by him as early as on 24.06.1995 and that PW1 was asked to companylect the registration certificate immediately and that numberhing relating to PW1 was pending with him after 24.06.1995. Viswanadham in his written statement stated that on the relevant date PW1 met him and informed that the respondent had sent PW1 with instructions to give Rs.100/- to him and therefore he had accepted the same and kept in the open almirah. Further he had taken the amount as he was under the impression that the respondent had sent the amount for the purposes of buying some provisions or other articles, which he numbermally used to do for the respondent. After companysidering the material on record and rival submissions, the trial companyrt rendered following findings No reliable evidence was produced on record number anything was elicited in cross-examination of the witnesses which companyld substantiate the theory that the trap proceedings were stage managed at the instance of Hanumantha Rao. The evidence of PW1 and PW2 as regards the demand and acceptance was companypletely trustworthy and reliable. The evidence of PW1 as companyroborated by that of PW2 proved beyond reasonable doubt that the respondent had demanded bribe amount of Rs.1000/- which was then reduced to Rs.500/- for issuance of registration certificate and that on 05.07.1995 the respondent in the presence of PW2 had demanded and received Rs.400/- from PW1 and thereafter delivered the registration certificate Ext.P8 after getting the relevant endorsement made by PW4. PW4 in his examination-in-chief deposed that when the endorsement of delivery of registration certificate was made on 05.07.1995, PWs 1 and 2 were present and on the instructions of the respondent PW4 had left his office. The evidence of PW1 as companyroborated by that of PW2 proved that registration certificate Ext.P8 though prepared on 24.06.1996 was number delivered to PW1. The evidence of PW9 as companyroborated by that of PW7, Government official who had acted as panch, proved that the hands of the respondent were first subjected to test which yielded positive result and only thereafter on the instructions of PW9, PW7 had picked up the currency numberes from the table top. Thus there was numberforce in the companytention of the respondent that PW9 had made him pick up the currency numberes. With these findings the trial companyrt held that the case was proved beyond any doubt as regards the respondent. It however found that Viswanadham had number at any point of time demanded any bribe and that the case against him was number proved at all. Viswanadham was, therefore, acquitted of all the charges. The respondent was companyvicted under Sections 7 and 13 1 d ii read with Section 13 2 of the Act and sentenced on each of the aforesaid two companynts to suffer simple imprisonment for one year and to pay a fine of Rs.1000/-, in default whereof to undergo further simple imprisonment for four months . The respondent appealed in the High Court. It was submitted on his behalf that Phenolphthalein powder was number only applied to the tainted numberes but also to the Day Book, that day Day Book was number subjected to any test by PW9 and therefore there was definitely a doubt about the veracity of the trap proceedings. It was further submitted that numbermal practice is to receive money with right hand whereas the respondent had allegedly received the amount with his left hand, which further created doubt. The High Court observed as under So after carefully going through the evidence, I entertain a doubt whether the day book is free from phenolphthalein powder and also there is a doubt whether A.1 received the amount with his left hand when the numbermal practice is to receive with his left hand. The explanation of A.1 is that while he was writing a book, the cash was kept on the table. To be more probable, there was numberphenolphthalein powder struck to the right hand of the accused. At the post trap proceedings also, the D.S.P. did number make any attempt to companyduct the sodium carbonate test on the daybook. It is also creating a doubt whether the phenolphthalein powder struck to the left hand fingers is that of the day book or of the tainted numberes. Therefore, I am inclined to give the benefit of doubt to the accused. With this view the High Court allowed the appeal and set aside the order of companyviction and sentence recorded by the trial companyrt. The State being aggrieved has preferred the instant appeal by special leave. Mr. G. Pramod Kumar, learned Advocate appearing for the appellant submitted that the theory as regards the Day Book was number even spelt out at the initial stage and if it was so done, it was possible for the investigating officer to subject the Day Book for appropriate test. The other reason which weighed with the High Court in his submission was purely in the realm of companyjectures. It was further submitted that numbere of the findings as recorded by the trial companyrt was even adverted to and found to be incorrect. Ms. T. Anamika, learned Advocate appearing for the respondent companytended that the entire trap proceedings were stage managed at the instance of Hanumantha Rao and that the High Court was companypletely justified in entertaining doubts as expressed by it. We have gone through the record and companysidered the submissions. Right since the beginning the companytention of the respondent had been that he was asked to pick up the currency numberes by PW9 and that is how his fingers got smeared. That part of the case was elaborately companysidered by the trial companyrt and it rendered a finding that his hands were subjected to test first and only thereafter PW7 had picked up the currency numberes which were lying on the table on the instructions of PW9. It was never the companytention that the Day Book itself had traces of Phenolphthalein powder and by handling said Day Book his fingers had got smeared. If it was so companytended the investigating officer companyld immediately have subjected the Day Book itself to appropriate test. The evidence on record shows that the respondent accepted Rs.400/- only out of Rs.500/- offered by PW 1 as per demand and instructed that Rs.100/- be given to Viswanadham, which would negate the theory of any accidental touching of tainted numberes. This part of the case and aspects companycerning demand and acceptance companypletely stood proved. The companytention, therefore, deserves to be rejected. The other companytention that a person would number numbermally receive money by his left hand, again has numberbasis and is purely in the realm of surmises and companyjectures. The High Court did number in any way deal with the reasons and findings recorded by the trial companyrt while finding the respondent guilty of the offences in question. The assessment and companyclusions of the High Court cannot even be termed as a possible view in the matter. We, therefore, set aside the judgment and order passed by the High Court. The appeal is allowed and the judgment of companyviction and sentence as recorded by the trial companyrt against the respondent is restored. The respondent shall be taken into custody forthwith to undergo the sentence as awarded. .J Pinaki Chandra Ghose .J Uday Umesh Lalit New Delhi, May 06, 2015 ITEM NO.1B COURT NO.11 SECTION II for Judgment S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Criminal Appeal No s . 89/2009 STATE OF ANDHRA PRADESH Appellant s VERSUS KESAVAPATNAM CHINA SWAMY Respondent s Date 06/05/2015 This appeal was called on for pronouncement of judgment today. For Appellant s Mr. Guntur Pramod Kumar, Adv. Mr. Guntur Prabhakar, Adv.

Lord Justice Sedley : The judgment which follows is the judgment of the court. The appellant, a citizen of the People's Republic of China, arrived in this country with his wife in December 2000, claiming asylum for both of them because of his membership of the Falun Gong movement. His father, mother and sister were already here. The father had been accepted as a refugee earlier in 2000. He lives in the London Borough of Haringey. The sister, who originally came as a visitor, is now married and living with her husband and child in Aylesbury. She appears to be in the United Kingdom as of right: at all events, no question has arisen about her entitlement to remain here. The appellant's asylum claim has failed, but he seeks to remain, and his wife with him, in order to look after his father. His father, who suffers from chronic depression and post-traumatic stress disorder as a result of having been imprisoned and tortured in China, began to behave violently towards his wife and daughter. One result was that the parents were divorced in August 2003. The daughter, whose relations with the father the immigration judge described as ambivalent, visits him once a fortnight, her husband accompanying her partly because she cannot drive and partly to ensure her safety. In consequence it is the appellant and his wife who live with the father and take care of him. The father's needs are considerable. He needs help with washing and dressing, and vigilance about taking his anti-depressant medication. His psychiatric condition had led him on three occasions in 2003-4 to attempt suicide or to prepare for it by secreting an implement. The opinion of his treating psychiatrist, Dr Beary, was that without the care of the son and daughter-in-law the father would present a high suicide risk. Following statutory review and an appeal hearing, the IAT upheld the rejection of the asylum claim but remitted to a fresh adjudicator – in the event, under the transitional provisions, an immigration judge, Mr M.P.Keane – the question whether removal would violate the appellant's rights under article 8 of the ECHR. This question the immigration judge answered in the negative. The AIT and Brooke LJ refused permission on the papers to appeal to this court, but on renewal Keene and Rix LJJ granted it. Although the two-judge court which gave permission to appeal left open all seven grounds set out in the appellant's notice, for reasons to which I now turn I consider that those grounds which are viable all go to the issue of law raised by the first ground, namely whether the immigration judge reached his conclusion that removal would be proportionate by legally proper means. This is the ground on which Eleanor Grey, for the Home Secretary, has rightly chosen to meet the appellant's case, which has been developed before us by Richard Drabble QC. The immigration judge found the facts I have outlined to be established.  He accepted that the father continued to present a suicide risk. He held, clearly rightly, that the appellant had demonstrated the existence of a family life here, and that within it he and his wife afforded the father "very significant day-to-day care" both practical and supervisory, creating "a significant dependency" going beyond the normal familial ties of love and affection. At the time, the appellant had permission to work and was earning about £16,000 a year with which he maintained his father. The immigration judge concluded that the appellant's private life bore much the same features as his family life, but possibly also the satisfaction of working for his living. Since the promulgation of the decision under appeal, however, the permission has been withdrawn. In what follows I will therefore consider family life alone. 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 wellbeing 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. The immigration judge, having found that the first paragraph of the article was engaged, set out a series of consequential questions. Uncontentiously, he found that removal would interfere with the appellant's family life to an extent which would necessarily engage art. 8. He held, again uncontentiously, that any such removal would be in accordance with the law. He then posed the following two questions: Is the interference necessary in a democratic society for the prevention of disorder or crime? If so, is the interference with the right of the appellant to respect for family and private life posed by the decision under appeal proportionate to the legitimate end sought to be achieved? This approach over-elaborates the issue arising under art. 8(2). Once the article is engaged by a substantial but lawful derogation from the respect due to family life, the remaining question is whether the impugned act is necessary in a democratic society for one of the purposes specified in the Convention. The specified purposes relevant to immigration control are ordinarily the economic well-being of the country and the protection of the rights and freedoms of others. (Disorder and crime are more likely to matter in deportation cases.) But the Strasbourg court has wisely avoided the making of political judgments about what democratic societies should and should not be doing by using the concept of proportionality as a surrogate: a democratic society does not use its lawful powers so as to interfere disproportionately with individuals' human rights. It is by this means that proportionality enters art. 8(2). It follows that the first of the immigration judge's two final questions was unnecessary, partly because it postulated the wrong Convention purposes but mainly because it raised no issue that was not raised by the final question. The latter question was described by the immigration judge as involving "the balancing exercise which is the essence of an assessment of proportionality", requiring him to "accord due weight to the competing interests". This may be right as far as it goes, but it is not all. The assessment of proportionality is not a simple weighing of two cases against each other. It arises only when the claimant has established that he enjoys a protected right which is threatened with violation: at that point the burden shifts to the state to prove that the violation is nevertheless justified. To do this the state must show not only that the proposed step is lawful but that its objective is sufficiently important to justify limiting a basic right; that it is sensibly directed to that objective; and that it does not impair the right more than is necessary. The last of these criteria commonly requires an appraisal of the relative importance of the state's objective and the impact of the measure on the individual. When you have answered such questions you have struck the balance[1]. In the field of immigration, the removal of someone who has no right to be here is generally self-justifying: it requires no additional reasoning to establish that their removal is both lawful and necessary for purposes recognised by the Convention. But among exceptional cases are claims like the present one where it is argued that the consequent disruption of family life is greater than is necessary for these purposes – is, in other words, disproportionate. The Immigration Rules and the Home Secretary's supplementary policies expressly recognise and provide for such cases, and it will be necessary in a moment to consider these in detail. It is only in cases in which the immigrant has no claim under the Rules – in other words where the Rules operate entirely against him – that a freestanding proportionality case may occasionally arise under art. 8, requiring independent proof of circumstances sufficient to outweigh the policy imperatives: see Huang v Home Secretary [2005] 3 WLR 488 §56, per Laws LJ. The present, at least in the form in which it was presented to the immigration judge, was such a case. The kernel of the appellant's case before the adjudicator was that the disproportionality of removing him and his wife was actually recognised in all but one respect by the Home Secretary's own published policy. In its material part the policy reads: Family reunion ……. This instruction gives guidance to caseworkers on consideration of applications made by family members who want to be reunited with a person in the UK who has been recognised as a refugee …………… Only pre-existing families are eligible for family reunion, i.e. the spouse and minor children who formed part of the family unit prior to the time the sponsor fled to seek asylum. We may exceptionally allow other members of the family (e.g. elderly parents) to come to the UK if there are compelling, compassionate reasons. ……………….. The sponsor is not expected to meet the maintenance and accommodation requirements of the Immigration Rules. …………………… Family reunion applications must be made at entry clearance posts overseas. All concessions to this practice have been withdrawn. The phrase "compelling, compassionate reasons" is not a happy one. The inapposite comma in the departmental version is absent from the version contained in the Ministerial statement to the House of Commons, announcing the policy, on 17 March 1995. If "compassionate circumstances" in Rule 317, as explained by Chadwick LJ in Senanayake v Home Secretary [2005] EWCA Civ 1530, §21, mean "circumstances which would evoke compassion in the mind of an objective decision-maker", then "compassionate reasons" have an analogous meaning. The adjective "compelling" is clearly intended to enhance this test, not merely replicate it (which is why the comma is unfortunate), but I do not accept Miss Grey's contention that it is equivalent to the use of the superlative ("most exceptional") in Rule 317. The phrase rests on its own bottom. Perhaps the best paraphrase, though it hardly sheds a blinding light, is that it means reasons which would compel, not merely invite, an objective decision-maker to feel compassion. It was the appellant's case, argued below by Mr Drabble's junior Nicholas Armstrong, that the facts I have outlined constituted a compelling compassionate case for allowing him and his wife to remain here. The only respect in which he fell outside the policy was that he was applying here and not at an entry clearance post abroad. The immigration judge, however, did not accept his case. It is necessary, in order to deal with the challenge to his conclusions, to set out in full the critical section of his decision: 25. A collection of factors have led me to the conclusion that the right of the appellant to respect for family and private life would not be subject to disproportionate interference if the appellant was removed to China. I now mention those factors and features of the evidence which have particularly influenced me. 26. First, it is to be borne in mind that the appellant is an able-bodied young man who would be returning to a country with whose traditions, customs and language he is familiar. He is not at risk of persecution from the Chinese authorities and he would be able to pick up the threads of his former life after he arrived in his country of origin. 27. Second, I find that the evidence did not establish that there would be an increased likelihood of Mr Miao taking his own life as a consequence of the decision under appeal being implemented. Certainly, there was at least one statement to such an effect. Dr Beary in his letter dated 1 April 2005 (page 95 of the appellant's bundle of documents), "It remains my view that if his son is deported there is significant risk that his father's mental state will seriously worsen and that the chances of him taking his own life is significantly increased." It was difficult to conceive of an evidential basis for such a prognosis. It really amounted to the opinion of Dr Beary and I regard his opinion as speculative. I accept that Mr Miao would remain a person who should fairly be regarded as a suicide risk – he has on three occasions attempted to take his own life. It was difficult to conceive of the evidence which supported Dr Beary's claim that his mental condition would seriously worsen and that prospects of him taking his own life would correspondingly be significantly increased. Certainly, I am prepared to accept that Mr Miao would be saddened if the appellant was removed from the United Kingdom and perhaps exceptionally saddened. It was utterly a matter for conjecture whether such feelings on Mr Miao's part would give rise to a serious worsening of his mental condition or that the prospects of him taking his own life would be significantly increased. 28. Third, I find that Mr Miao would be afforded care after the appellant left the United Kingdom. I have made findings of fact as to Miss Mia's circumstances and I have characterised her relationship with Mr Miao as an ambivalent relationship. Nevertheless, I am not prepared to disregard the possibility that Miss Miao might undertake a degree of care of her father – she has continued to visit him with her two year old son every two weeks. While I am not prepared to speculate as to her motives in so doing I should not regard Miss Miao as permanently estranged from her father. From her determination to continue with the visits – and against the well-meant advice of her husband – I draw the inference that there is at least a degree of concern for her father entertained by Miss Miao. 29. Fourth, I find that there would be an element of support from governmental agencies. An enquiry appeared to be made by a caseworker on behalf of the appellant (page 120 of the appellant's bundle of documents). Dr Yu has been Mr Miao's general practitioner since July 2001 (letter dated 23 May 2005 and submitted separately from the appellant's bundle at the hearing). He would appear to have a close knowledge of his patient. Dr Yu would appear to have contemplated the possibility that if the appellant and Mrs Miao departed from the United Kingdom that there would be a requirement of care from different agencies. He said in a letter dated 7 January 2005 (page 90 of the appellants bundle of documents), "Without the son and daughter-in-law around, the father would require several careworkers [sic} of different agencies." I draw the inference that Dr Yu was contemplating the possibility that care might not be provided by the appellant and Mrs Miao in the future but might be provided to Mr Miao from different agencies. In his skeleton argument and in submissions Mr Armstrong submitted that it would not be a practical exercise for Mr Miao to receive care from the local social services department. In his skeleton argument he stated, "Significant attempts to obtain care from the local social services department have been made (particularly through the charity the Chinese Information and Advice Centre which is also representing but to no avail)." In submissions he mentioned the difficulty which presented to one such as the appellant in procuring relevant evidence from hard-pressed government agencies. In the light of Dr Yu's remarks in particular I am not prepared to discount the possibility that after the appellant and Mr Miao departed from the United Kingdom that Mr Miao would receive some care. 30. Further, I should draw reasonable inferences from the evidence so as to reach a finding as to whether the appellants would encourage such a course. The appellant's love and affection for Mr Miao should not be doubted. He is, according to my findings of fact, together with Mrs Miao providing support to Mr Miao. The appellant is all to aware that he might be removed from the United Kingdom and he is concerned about his father's well-being should he be removed from the United Kingdom. Dr Yu would appear to be alert to the possibility that at some stage neither the appellant nor Mrs Miao will be able to provide care for Mr Miao and moreover to undertake effective steps to prevent him taking his own life or embarking upon steps preparatory to such a course. I am not prepared to discount the possibility that the appellant might encourage and liaise with Dr Yu so as to realise that prospect of assistance from the Social Services Department which Dr Yu was already contemplating according to those remarks which he made in his letter dated 7 January 2005. I am not prepared to find that Mr Miao would be left alone without help from any source let alone from the Social Services Department if the appellant and Mrs Miao were to be removed from the United Kingdom. In the light of the evidence to which I have referred in this paragraph of my determination I find that some care would be afforded to Mr Miao. Mr Armstrong submitted that it would be a particular difficulty that Mr Miao speaks Mandarin only and no English. He mentioned in his skeleton argument, "It is in any event doubtful whether someone could be found who he would accept, and who spoke the language." I should take judicial notice of the fact that a large expatriate Chinese population lives in London and the south-east. I am not prepared to find that there would not be a Mandarin-speaking carer or equivalent who might assist Mr Miao. 31. Fifth, and significantly I find that the appellant has a real option under the Immigration Rules to apply for entry clearance. I have borne in mind that guidance offered by the Court of Appeal in Huang and particularly in paragraphs 52, 53 and 56 of the judgment of Laws LJ. Accordingly, I should not regard the 1950 Convention as a means of circumventing the Immigration Rules. In his skeleton argument Mr Armstrong acknowledged that the starting point was indeed the Immigration Rules and he submitted that the appellant fell outside the Rules because he was not dependent on his father and Mr Armstrong referred to paragraph 317 of the Rules (paragraph 2 of the skeleton argument). I am not prepared to consider the prospects of the appellant succeeding in an application for entry clearance under paragraph 317 of the Rules. Nevertheless, if the appellant was to make such an application upon his return to China the Entry Clearance Officer would be required to consider the possible application of Article 8 of the 1950 Convention and those human rights issues which were amply ventilated by the written and oral evidence could be repeated. It is especially on account of the fact that there is a real entry clearance option available to the appellant that I am not prepared to regard the decision under appeal as disproportionate. 32. Finally, I have borne in mind the legitimate aim of the prevention of disorder as served by the maintenance of an effective immigration control. I have borne in mind that the maintenance of an effective immigration control is in the interest not only of the state but of the wider community. I have borne in mind that the legitimate aim itself is not easily overridden. I do not regard it as overridden in the present appeal. I dismiss the appeal under Article 8 of the 1950 Convention. A number of things need to be noted about these findings. First, I do not think it is legitimate first to accept the evidence of a doctor, as the immigration judge did (§9), as coming from a treating psychiatrist of impeccable qualifications and longstanding and significant practical experience, and then (§27) to dismiss his prognosis on the ground that "it really amounted to an opinion" and as such was "speculative". A medical expert witness's function is precisely to give an opinion on the basis of his clinical knowledge of the patient and of his field. That is what Dr Beary had done. He could do no more, and in the absence of some good reason for doubting his expertise or the factual or logical foundation of his opinion, the immigration judge was wrong to dismiss it as merely an opinion, much less to treat it as speculative or conjectural. Like any prognosis it might turn out to be wrong, but the uncontroverted evidence the immigration judge had – and it was none the worse for being opinion evidence - was that if the son was deported the father's state, and with it the risk of suicide, would markedly worsen. By marginalising Dr Beary in this way, the immigration judge left out of account what Mr Drabble submits, and I would accept, was relevant evidence. It included the following. When Dr Beary had seen the father in January 2005 (six months before the hearing) he found him "still severely depressed and actively suicidal". He reported: "It is my view that [the appellant] is an extremely important part of [the father's] support system. If his son is deported there is a significant risk that his father's mental state will worsen and that he will kill himself." In updating reports written in April and May 2005 Dr Beary restated this view. In the latter he went on to say that since the father speaks no English "I can see no prospect of the social and health services providing long term care and support likely to meet his mental health needs." There was cogent evidence that public service provision for the father had been methodically explored without success. A group of one-page reports from the Chinese Information and Advice Centre recorded telephone enquiries made of the local social services disability team (who could not handle mental health problems), the local mental health centre (who could not provide home care and could only refer cases to a psychiatrist with a view to hospital admission), the DWP Disability and Carers Service (who referred the Centre back to social services), and two organisations specifically concerned with the provision of services to Chinese people (neither of which was able to provide continuing care or supervision). I would record, in passing, my appreciation of the thoroughness which these short reports display. In defence of the immigration judge's approach Miss Grey has drawn our attention to the judgment of the European Court of Human Rights in Bensaid v United Kingdom  (2001) 33 EHRR 10, where psychiatric evidence about the likely effect of removal on an Algerian suffering from schizophrenic psychosis was described (§39) as "to a large extent speculative". The reason for this was that the psychiatrist had stated that, while the applicant currently presented no very serious risk of suicide, she would be "more uncertain" of the prognosis were he returned to Algeria because it was "highly likely" that the combined stresses of deportation and the environment in Algeria would trigger an exacerbation of the symptoms (see §21). Mr Drabble points out that the Court, even so, accepted the seriousness of the applicant's condition (§40), but was not prepared to find "a sufficiently real risk" that removal would violate art. 3. He draws our attention to the concurring opinion of Judges Bratza, Costa and Greve, who do not characterise the psychiatric evidence as speculative and who concur only on the ground that the anticipated risk of relapse had not been shown to be "sufficiently real and certain" to violate art. 3. Nothing in Bensaid suggests that the informed opinion of a suitably qualified and expert can be dismissed as speculative or conjectural simply because it is an opinion.  This is in any case not a question of European human rights law but of our domestic law of evidence. In my judgment Dr Beary's evidence was not only admissible but uncontroverted and should have been taken fully into account. Elsewhere in these findings, far from downplaying the evidence, the immigration judge is scrupulous in not overstating it. At three successive points (§§28, 29 and 30) he limits himself to saying that he is "not prepared to discount the possibility" of help for the father in the son's absence – from the daughter, from (unspecified) agencies, and from social services with the help of his GP. Every possibility of help, great or small, needs to be taken into account in such an exercise as this; but it has to be said that possibilities of help of which no more can be said than that they cannot be discounted, even if there are two or three of them, do not amount to a great deal in relation to the care of a man as unwell and at risk as the appellant's father. It was no doubt for these reasons that the immigration judge recognised, when he reached §31, that the case was still finely balanced. It is the considerations set out in §31 which, as he himself says, tipped the scales against the appellant. It is this paragraph, correspondingly, which attracts the brunt of Mr Drabble's criticism, and which Miss Grey in turn most strongly defends. One criticism made of §31 is that it mistakenly treats any reliance on the ECHR as "a means of circumventing the Immigration Rules". I do not think this criticism is necessarily right. The point could perhaps have been better expressed, but what the immigration judge is in my opinion saying is that, at least in the context of art. 8(2), the Convention rights have to operate with the Rules, not independently of them. They are not a trump card but a control mechanism. Mr Drabble accepts as much. More centrally, the paragraph gives decisive weight to two things. One is that it is open to the appellant to make an entry clearance application from abroad. The other (at least as I read it) is that it is not impossible for the application to succeed under Rule 317, given in particular the fact that the ECO would have to apply art. 8. The second of these, if it is what the immigration judge meant to say, is wrong, as Mr Armstrong had submitted it was. Rule 317 is concerned only with persons "seeking indefinite leave to enter or remain in the United Kingdom as the parent, grandparent or other dependent relative of a person present and settled in the United Kingdom". It is for exactly this reason that the Family Reunion Policy, parts of which I have set out earlier in this judgment, has been adopted[2]. Under this policy the ECO would have to decide whether the circumstances described in the earlier part of this judgment are such "compelling, compassionate circumstances" that the applicant should be given the benefit of the policy and be reunited with his father notwithstanding that he is not within the primary class of spouses or minor children. This is a more favourable entry clearance option than the option considered by the immigration judge under Rule 317. At the end of §24 the immigration judge said: "For reasons which I recite later in this determination I am not prepared to conclude that the separation would be of a substantial duration." Although the judge does not go on to say so, it is implicit in this that the Home Secretary, albeit insisting on removal and opposing the appeal on its merits, has formed no view on any family reunion application which may be duly made abroad. But the first and principal ground of appeal is that it was for the immigration judge himself to consider the policy in the context of art. 8 and to reach his decision on the proportionality of removal in the light of it. The argument was, and is, that since the appellant came within the policy in every respect save his present location, it would be an unconscionable disruption of his family life to send him back to China simply so that he could apply from the correct place, when the very interruption of care might be fatal. Right or wrong, it is submitted that the immigration judge nowhere dealt with this argument. For the Home Secretary it is submitted that the argument is self-serving. The father's dependency on the appellant and his wife has arisen solely because of their presence here in breach of immigration control and asylum law. To let the appellant take advantage of this by securing a decision on compassionate grounds from his present position of advantage would be to sacrifice the consistency both of immigration control and of the family reunion policy. Whether the prospects on application abroad are good or poor, Miss Grey submits, it is a proportionate response to the breach of immigration control to require the application to be made there. Before I consider this key issue, it is necessary to note that there is in fact a separate departmental policy which is directly in point but which was not drawn to the immigration judge's attention. Miss Grey has brought it to ours. It is the Carers Policy, dated June 2001, which features as section 2 of chapter 17 of the Immigration Directorates' [sic] Instructions. It applies to "persons here in a temporary capacity seeking leave to remain to care for a sick relative or friend" and who therefore, like the appellant, fall outside the Rules. Since it may be relevant to other cases, a complete copy is annexed to this judgment. In short, it provides for admission as a visitor – not, in other words, via entry clearance - for 3 months with a view to making care arrangements that do not involve the applicant. The period may be extended on proof of ongoing efforts to do this. The existence of this policy, even if it had been made known to the judge, would not, however, have been decisive of the appeal. It would still have been, as it still is, the appellant's case that removal was in all the circumstances a disproportionate invasion of his rights under art. 8 because of the applicability, but for his presence in this country, of the family reunion policy. It is common ground that if the appeal, so framed, had been allowed under s.65 of the Immigration and Asylum Act 1999, the adjudicator would have remitted to the Home Secretary the decision as to how long the appellant should be admitted for. Counsel tell us that 3 years is a standard, though not invariable, period. In my judgment, on the facts found by the immigration judge and the medical evidence which he should have taken into account, the reasons advanced by the appellant for letting him stay here with his father were incontestably "compassionate, compelling reasons". No objective decision-maker, giving the phrase the kind of meaning suggested earlier in this judgment, could have concluded otherwise. The father, traumatised, chronically depressed and socially isolated, was a continuous suicide risk. The son and daughter-in-law were taking care of him out of affection and a sense of familial obligation. At the time of the hearing, and until his permission to work was revoked in consequence of its outcome, the son was able to maintain all three of them without recourse to public funds. With only exiguous possibilities of substitute care, and then of an intermittent or impersonal nature, even a relatively short interruption might be mortal; and if an ECO were to refuse entry, the interruption might be greatly prolonged. Language has lost its meaning if these are not compelling compassionate reasons for letting the appellant stay for the time being. But it does not follow that removal would be disproportionate. It follows only that the proportionality of removal has to be assessed on the footing that, but for his presence in this country, the appellant would come within the family reunion policy. I do not accept Mr Drabble's submission that the assessment must come out in his client's favour. As I have indicated earlier, there are arguments both ways, and this court is not the right forum for their resolution. What is now needed is remission for a reappraisal of proportionality on a correct footing. This footing will include the following. First, the diagnosis and prognosis of the father's condition given by Dr Beary. Next, the (avowedly slender) possibilities found by the immigration judge of substitute care from the daughter, social services or medical sources. Any or all of these may have been updated by the time of the remitted hearing. Then there will be the Care Policy, which appears to cover the appellant's case. It does not exhaust his grounds for seeking leave to remain, but it does demonstrate that not everyone who is needed as a carer by a person settled here is expected by the Home Secretary to apply from abroad. Although nothing in s.65 appears to dictate it, we are told that the practice, if an appeal is allowed, is to remit to the Home Secretary the consequential period of leave to remain, with recourse to judicial review if too little is allowed. It may be that in another case this practice will call for reconsideration, but in the present case it will be sufficient to remit the issue of proportionality for decision on the footing of the previous decision read in the light of the present judgment, and of such updating evidence as may be tendered. The remitted hearing will be before a fresh immigration judge unless the parties agree (and there is no reason why they should not) that it is to be the immigration judge, Mr M P Keane, who has conducted the appeal so far. The appeal is allowed accordingly. Note 1   See inter alia De Freitas v Ministry of Agriculture [1999] 1 AC 69, PC; Daly v Home Secretary [2001] 2 AC 532, HL.    [Back] Note 2   In Senanayake v Home Secretary [2005] EWCA Civ 1530, §14, I entertained the possibility that the material part of the FRP simply amplified Rule 317. In relation to the facts of that case it was arguably so, but as a general proposition about the FRP it does not stand scrutiny. The assenting judgment of Chadwick LJ on the meaning of “compelling, compassionate circumstances” stands independently of this.    [Back]

O R D E R Heard learned companynsels for both the parties. Learned companynsels for both the parties agree that Justice B.N. Srikrishna, former Judge of the Supreme Court of India may be appointed as Arbitrator. Accordingly, Justice B.N. Srikrishna, former Judge of the Supreme Court is appointed as Arbitrator. He shall fix his terms and companyditions.

Lord Justice Gross : INTRODUCTION The Appellant ("A-S") appeals from the judgment of Walker J, dated 14th October, 2011 ("the judgment"): i) Refusing A-S's Part 11 application challenging the jurisdiction of the Court; ii) Granting the Respondent's ("SICL's") application for a freezing order in the amount of £57.365 million. The gravamen of the appeal is that the SICL case on the merits is (to put the matter neutrally) too insubstantial to justify the relief granted. If, however, SICL successfully surmounts this "merits" hurdle, there is no (surviving) independent argument challenging jurisdiction or resisting the grant of the freezing order. The Judge helpfully described the parties. A-S is a national of Saudi Arabia and resides there. SICL is a company incorporated in the Cayman Islands, created to hold some of the off-shore assets of A-S and his family. SICL was placed into official liquidation in the Cayman Islands on the 18th September, 2009, by way of a creditors' petition. This litigation is conducted on behalf of SICL by its joint official liquidators ("the liquidators"). The litigation involves a claim by SICL against A-S, founded on a Put Option Agreement, dated 1st April, 2008, as amended by a supplemental agreement dated 20th October, 2008 ("the POA"), relating to 32,600,000 shares in Berkeley Group Holdings plc ("the shares") and a Put Option Exercise Notice, purportedly given on the 29th March, 2011 ("the Notice"). The POA expired at midnight on the 30th March, 2011 unless, by then, SICL had delivered to A-S a Put Option Exercise Notice conforming to the requirements of the POA. SICL's case is that A-S is indebted to it in an amount in excess of £57 million, by reason of his failure to satisfy a liability said to have arisen pursuant to an election by SICL under cl. 1(E)(ii) of the POA. By order dated 5th September, 2011, Simon J granted permission to serve the proceedings on A-S out of the jurisdiction. Subsequently, before Walker J, A-S failed in his challenge to that grant of permission and SICL succeeded in its application for a freezing order. Three principal issues arise on this appeal: i) Was SICL entitled to exercise the Put Option under the POA in respect of shares it did not own? ("Issue (I)") ii) Did the Notice conform to the contractual requirements of the POA? ("Issue (II)") iii) Was there sufficient evidence of delivery of the Notice in the manner required by the POA, by the time of its expiry at midnight on the 30th March, 2011? ("Issue (III)") THE POA AND THE NOTICE The POA provided, inter alia, as follows: " WHEREAS (A) The Buyer [i.e., SICL] owns 32,600,000 ….shares in Berkeley Group Holdings plc, a company licensed under the laws of the United Kingdom. (B) For valuable consideration, the Seller [i.e., A-S] has offered to sell a put option to the Buyer and the Buyer has agreed to buy a put option from the Seller for a period of three (3) years, with an option to extend the put option for an additional one (1) year period, at the market price of each Share as of the date of this Agreement and thereafter as of the date of the anniversary of this Agreement that coincides with the date on which any additional option may be exercised, provided, however, that the put option shall be cancelled or avoided at such time as the price on the exchange on which the Shares are customarily listed equals or exceeds GBP 12.50….per share (the 'Barrier Price'). ….. 1. PUT OPTION (A) The Seller hereby grants to the Buyer an option (the 'Put Option') to sell the beneficial ownership of all or any part of the Shares to the Seller at a strike price of GBP 11.97….per Share (the 'Put Option Price'). Provided the Buyer is not in default of its payment obligation under Clause 1(F) and provided the Barrier Price has not earlier been met or exceeded, the Put Option shall be exercisable by the Buyer at any time and from time to time after the date of this Agreement until the first to occur of (a) 31 March 2011 or (b) … or (c) the delivery to the Seller by the Buyer of one or more notices covering the aggregate of all the shares pursuant to Clause 1(C) of this agreement. (C) The Put Option….shall be exercised by the delivery to the Seller of a written notice of exercise (the 'Put Option Exercise Notice') signed by the Buyer. The Put Option Exercise Notice shall specify the number of Shares being sold, the amount payable at the Put Option Closing (as defined below) and the Put Option Closing Date (as defined below). If, however, the Barrier Price has earlier been met or exceeded, the Put Option ….shall be cancelled and avoided. (D) The sale of all of the Shares to the Seller pursuant to the exercise of the Put Option shall take place at a closing (the 'Put Option Closing') to be held at the offices of ….[SICL]….Geneva, Switzerland at 3.00pm local time on the fourteenth day after the date of the Put Option Exercise Notice or such other date, time and place as the parties may agree (the 'Put Option Closing Date'). (E) At the Put Option Closing: (i) The Seller shall pay to the Buyer an amount equal to the product of the ….[Put Option Price]… and the number of Shares being sold (the 'Option Sale Amount'), in cash within a period of sixty days…..; and upon receipt of 'Option Sale Amount' by the Buyer, the Buyer shall give an irrevocable instruction to transfer all right, title and interest in and to the relevant number of Shares free and clear of any lien, security interest, mortgage, pledge, charge or other encumbrance of any nature whatsoever to the relevant authorities; or (ii) As an alternative to the settlement in clause E(i) above, the Buyer shall have the option to receive payment from the Seller, being the difference between the 'Put Option Price' and the price listed on the 'Put Option Closing' on the exchange on which the Shares are customarily listed ('Option Settlement Amount'), but only if the Put Option Price is higher than the listed price on the 'Put Option Closing', in cash within a period of sixty days….. ……. 4. REPRESENTATIONS AND WARRANTIES OF THE BUYER TO THE SELLER The Buyer hereby represents, warrants and covenants to the Seller as follows: (B) The Buyer owns the Shares free and clear of any lien, security interest, mortgage, pledge charge or other encumbrance of any nature whatsoever, except for such restrictions on transfer as may be imposed by applicable laws. (D) Each of the representations and warranties contained in this Clause 4 is true and correct as of the date of this Agreement and will be true and correct as of the Put Option Closing Date (if the same shall occur) with the same force and effect as though such representations and warranties had been made on and as of the Put Option Closing Date. 5. MISCELLANEOUS (H) This Agreement shall be governed by and construed in accordance with the Laws of the United Kingdom. Each of the Seller and the Buyer hereby irrevocably and unconditionally submits to the non-exclusive Jurisdiction of the Courts of the United Kingdom. All notices served shall be sufficiently served on the Seller if delivered to PO Box 3250, Al Khobar 31952, Saudi Arabia……" The Notice, signed by Mr. Akers, the Joint Official Liquidator and, as already recorded, dated 29th March, 2011, read, insofar as material, as follows: " ….. BY COURIER …… [4] This letter constitutes the Put Option Exercise Notice specified in Clause 1(C) of the Agreement. In accordance with Clause 1(E)(ii) of the Agreement, the Buyer elects to receive payment from the Seller, being the difference between the Put Option Price and the price listed on the date of the Put Option Closing, on the exchange on which the Shares are customarily listed (the Option Settlement Amount). [5] The Buyer exercises the Put Option in respect of 32,600,000 shares at a strike price of GBP 11.97 (the Put Option Price). [6] The share price listed on the London Stock Exchange at the close of business yesterday was GBP 10.34, giving the Put Option a value of GBP 53,138,000. The JOLs will provide you with a revised value at the Put Option Closing. [7] The Put Option Closing will take place at 3.00pm Swiss time fourteen days from the date of delivery of this notice, which is 12 April 2011. The Option Settlement Amount is the difference between the Put Option Price and the price listed on the London Stock Exchange at the close of business on the 12 April 2011. [8] Payment of the Option Settlement Amount is due to SICL within sixty days of the Put Option Closing…." (Paragraph numbering has been inserted, for ease of reference.) THE FACTUAL BACKGROUND It was not in dispute that the only evidence before this Court as to the factual matrix of the POA was contained in paragraphs 8 – 12 of the second witness statement of Mr. Akers, dated 15th September, 2011 ("Akers 2"): " 8. ….the Liquidators believe that SICL's purpose was to hold certain offshore assets and manage investments of Mr. Al-Sanea and his family. In this context, SICL also incurred very substantial obligations to financial institutions which lent funds to SICL and incurred obligations to financial institutions which provided other financial services to SICL…. 9. Company records of SICL in the possession of the Liquidators indicate that as at 31 December 2007, 30 June 2008 and 31 December 2008, SICL held 32,699,015 shares in Berkeley Group Holdings plc ('Berkeley'). 10. On the basis of our inquiries to date, we believe that it is likely that as at 1 April 2008, the shares in Berkeley were subject to security for any liabilities owed to certain financial institutions under prime brokerage agreements entered into by SICL with those institutions. The custodians of those shares appear from company and bank records in the Liquidators' possession to have included Citigroup, Citi Private Bank Geneva, Deutsche, Credit Suisse, JP Morgan and Lehman Brothers. 11. On the basis of SICL's Interim Report dated 30 September 2008 and its Annual Report for 2008, we also believe that the purpose of the POA was to support the value of the shares in Berkeley as an asset of SICL. The value of SICL's equity portfolio was reported to have decreased as a result of the global deterioration of equity markets. To limit its exposure to equity market volatility a portion of its equity portfolio was hedged with equity put options. This meant that a minimum value would be maintained in the balance sheet for the equities hedged with put options so in the event of declining share prices the balance sheet value would not decline. 12. All but 3,566,339 of the 32,699,015 shares originally held by SICL appear to have been disposed of. Bank statements in the possession of the Liquidators indicate that as at 28 February 2011 and 30 June 2011, Citi Private Bank Geneva held 3,566,339 shares in Berkeley for SICL." Furthermore, (at least) for the purposes of this hearing, it was not in dispute or must be assumed that: i) At the time of entry into the POA, SICL was controlled by A-S; ii) A-S signed the POA for both parties; iii) A-S was thus "on both sides" of the transaction; iv) A-S has not cooperated with the liquidators in the winding up of SICL, as, by virtue of his position as a former director, he was obliged to do; v) In the circumstances and, not least in the absence of a "corporate memory" for SICL, the liquidators' state of knowledge is incomplete. THE JUDGMENT UNDER APPEAL In addressing the issues, it was common ground before the Judge that the test was whether SICL could show "a reasonable prospect of success": judgment, at [9]. As to Issue (I), Walker J recorded A-S's contention that there was nothing in the POA to suggest that SICL could dispose of the shares and still (thereafter) rely on the cash differential election under cl. 1(E)(ii) – and went on to acknowledge that, at a "substantive hearing", there was much to be said in support of A-S's case: judgment, at [19] – [20]. SICL admitted that it did not have beneficial ownership of the shares, either at the date when it purported to exercise the option or at the Put Option Closing Date: judgment, at [19]. However (judgment, at [20]), SICL was not thereby deprived: "….of substantial arguments that the Agreement is to be read in a way which would permit exercise of the cash difference election prior to the Put Option Closing Date, thereby making it unnecessary to comply with requirements which only made sense in the context of an actual sale of shares. " As to Issue (II), the Judge rejected various arguments that the Notice did not conform to the requirements of the POA. For A-S, it was submitted that the Notice failed "to do the things which were required by clause 1 in relation to an intended actual sale of shares" (judgment, at [19]); necessarily, that submission followed the fate of Issue (I). Other submissions (judgment, at [16] – [18]) were independent of Issue (I), for instance, the submission that the Notice had been delivered on the 30th March, 2011 but specified a Put Option Closing less than 14 days thereafter (the date in the Notice being the 12th April when it should have been the 13th April). In this regard, the Judge observed (at [17]): " To my mind there is at least one seriously arguable answer, namely that the 29 March notice was written on the assumption that it would be delivered that day. Moreover it is strongly arguable that clause 1(D) of the Agreement made it clear that the Put Option Closing was in the absence of contrary agreement to be held 14 days after the date of the POE notice itself, not the date of its delivery." Overall, the Judge was satisfied that there was a substantial argument that this and other independent criticisms of the Notice did not invalidate it. So far as concerns Issue (III), the Judge concluded (at [11]) that the final provision in cl. 5 of the POA (viz., the provision relating to delivery of notices to the specified PO Box): " ….gives rise to a strongly arguable case that actual delivery to the PO Box no later than midnight on 30 March 2011 constituted sufficient delivery for the purposes of the Agreement. " In this regard, the Judge (at [12]) identified the following facts, derived from Akers 2: " (1) The Al Khobar Central Post Office is the post office at which the PO Box is located. (2) At approximately 9.30 am on 30 March 2011, an agent of Al Sawwaf [the liquidators' Saudi Arabian counsel], Mr Abdul Karim Massoud, handed over an envelope containing a copy of the 29 March notice at the Al Khobar Central Post Office for delivery by registered mail to PO Box 3250. (3) The 29 March notice was expressed on its face to be 'By Courier' because, given the limited time available to the Liquidators to ensure it was delivered in accordance with the Agreement, the original of the 29 March notice was scanned and emailed to Al Sawwaf who in turn sent a copy of it by courier to Mr. Massoud for Mr Massoud to deliver it in accordance with the final clause of the agreement." It was, the Judge reasoned (at [13]), at least seriously arguable that the reference to delivery by courier was "a mere deficiency of wording" which did not render the notice invalid. Central to the Judge's determination of this Issue was his conclusion that (ibid): " In practical terms, if an envelope addressed to the PO Box is handed in at 9.30 am at the post office where the PO Box is located then in the ordinary course one would expect it to reach the PO Box later that day." The Judge went on to observe that if Akers 2 was "the sole evidence adduced by SICL at trial" then "it might not carry the day"; however, it sufficed to show a reasonable prospect of success on Issue (III). The Judge was accordingly satisfied that SICL's substantive claim had a reasonable prospect of success. For completeness, it should be noted that in coming to the conclusion that a freezing order should be granted, the Judge held that there would otherwise be a risk of A-S dissipating his assets (judgment, at [34]); the allegations against A-S subsequent to the appointment of the liquidators were, if borne out, "highly disturbing" and "warrants intervention by the court to safeguard such assets as are known to exist" (judgment, at [35]). THE RIVAL CASES ON THE APPEAL For A-S, Mr. Morgan QC submitted that, on Issue (I), SICL's claim had no real prospect of success. On a detailed analysis of the POA, there was no basis upon which SICL could be entitled to exercise a Put Option in respect of shares it did not own. Cl. 1(E)(ii) was not autonomous; indeed, if SICL was unable to "settle" under cl. 1(E)(i) – which it could not do as it no longer owned the shares - the option furnished by cl. 1(E)(ii) was not reached. The POA was neither a "bare contract" nor a "pure bet" which it would be if SICL's case was well-founded. The point was one of construction; there was no contest as to the factual matrix and nothing in the factual matrix to cast doubt on the construction for which Mr. Morgan contended. Commercial considerations, as well as the language of the POA, pointed to the same conclusion. SICL was not entitled to ask the Court to leave the Issue over for subsequent determination in the hope that something might turn up. Accordingly, this Court should decide the point. The Judge had applied the wrong test in considering only whether SICL had a reasonable prospect of success; but if he had applied the right test, he had reached the wrong answer. For completeness, at the stage when SICL had sought permission to serve A-S out of the jurisdiction, there had not been any suggestion of an alternative case to the effect that cl. 1(E)(ii) could be relied upon regardless of ownership of the shares. On Issue (II), Mr. Morgan submitted that the Judge erred in concluding that SICL's claim, based on the Notice, had a reasonable prospect of success. The Notice was non-compliant in the following respects: i) It did not specify the number of shares being sold; ii) It did not specify the amount payable; iii) It failed to identify an unambiguous Put Option Closing Date, either 14 days after delivery or the 12th April, 2011. As to Issue (III), Mr. Morgan categorised the evidence relied upon by the Judge and taken from Akers 2 as "barely admissible". However, quite apart from admissibility, Mr. Morgan's submission was that on the basis of that evidence no permissible or proper inference could be drawn of same day delivery of the Notice. All that was known was that the Notice had reached the Al Khobar post office for delivery by "registered mail"; there was no evidence as to what had happened thereafter. If there was other evidence capable of filling the gap, SICL had not taken the opportunity (prior to the hearing before Walker J) of adducing it. Accordingly, there was no evidential basis for the conclusion reached by the Judge and he was wrong to hold that it was "seriously arguable" that the Notice had been delivered before midnight on the 30th March, 2011. Plainly, if Mr. Morgan is right on any one of Issues (I) – (III), then the appeal must be allowed. For SICL, Mr. Atherton QC emphasised throughout and as an "over-arching" point, the position in which the liquidators found themselves, in particular as to their limited knowledge and continuing investigations, consequential on A-S's failure to cooperate. It could not be assumed that all the relevant material was before the Court. Mr. Atherton underlined that the relevant test was whether SICL's claim disclosed a serious question to be tried or had a reasonable prospect of success. It was noteworthy that A-S had not submitted before Walker J that the Judge should go on to decide matters of law and construction. The point was in no sense academic in the present case; the POA was to be construed having regard to all the surrounding circumstances – and it could not here be said that those did not realistically require any further investigation. As to Issue (I), SICL's case had a reasonable prospect of success. On the basis of Akers 2, it was (for example) apparent that the representation in cl. 4(B) of the POA was incorrect at the date of inception to the knowledge of both parties; it could not therefore be assumed that cl. 4(D) (much relied on by A-S) had the importance which was suggested. The purpose of the POA was, by hedging, to protect the value of the shares as an asset of SICL. The object was to maintain value for A-S himself, who, at the time had been on "both sides" of the transaction. By treating the cl. 1(E)(ii) option as exercisable regardless of ownership of the shares, the protection afforded by the hedge was enhanced. It was important to focus on the commercial purpose of the POA rather than on semantics; it made sense for cl. 1(E)(ii) to be treated as an "independent obligation". Even if, contrary to SICL's primary submission, the Court should determine Issue (I) finally, then, having regard to the factual background, SICL's construction should prevail. As to Issue (II), Mr. Atherton's submission was succinct. The Notice was tailored to SICL proceeding under cl. 1(E)(ii) of the POA. As SICL was not envisaging a sale, it could not specify the number of shares to be sold. There was plainly a serious issue to be tried as to the validity of the Notice; it was "nonsense" to suggest otherwise. Here too, Mr. Atherton stressed that all the facts were not known and that the interpretation of the Notice could not be divorced from the factual and commercial background. If need be, however, the Notice was sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how it was to operate; the Notice was accordingly valid. Mr. Atherton's submission on Issue (III) was in similar vein. There was a serious issue to be tried as to the validity of the Notice; it was nonsensical to say that the case was bound to fail. For the purposes of determining whether SICL had a reasonable prospect of success on this Issue, the Judge had been amply entitled to draw the inference that a Notice received at the Al Khobar post office by 09.30 on the morning of 30th March, 2011 would make its way in the ordinary course into a PO Box physically situated in the same post office, before midnight on that day. That the matter may need to be investigated further at trial was neither here nor there. We were most grateful to both Mr. Morgan QC and Mr. Atherton QC for their respective submissions. THE LEGAL FRAMEWORK It is next convenient to address the legal framework. First, SICL sought and obtained permission to serve A-S out of the jurisdiction pursuant to paragraphs 3.1(6)(c) and (d) of Practice Direction 6B, on the bases that the POA was governed by English Law and/or that the POA contained a term to the effect that the (English) Court shall have jurisdiction to determine any claim in respect of the contract. As is hornbook law, SICL was required to show a "good arguable case" that its claim came within these jurisdictional gateways: Civil Procedure 2011, Vol. I, at 6.37.15.1. As the learned authors there note, a good arguable case "connotes more than a serious issue to be tried or a real prospect of success, but not as much as balance of probabilities". It is unnecessary to say more about the precise requirements of a "good arguable case". In the light of cl. 5(H) of the POA (set out above), it is plain that the SICL claim faced no difficulty in coming within the relevant gateways. Moreover, given the non-exclusive English jurisdiction clause, it has (rightly) not been suggested that the English Court would not be the appropriate forum to hear these disputes – subject of course to the point/s taken by A-S as to the "merits" of the claim. Secondly, jurisdiction having once been established, as to the "merits" of the claim, it is clear that SICL needs to show no more than a "serious issue to be tried" or, amounting to the same thing, a "reasonable prospect of success": see, Seaconsar Ltd v Bank Markazi [1994] 1 AC 438; BAS Capital Funding Corp v Medfinco Ltd [2003] EWHC 1798; [2004] 1 Lloyd's Rep 652, esp. at [151] – [153]. This test equates to "the prospects of success needed successfully to resist an application for a Pt 24 order": Civil Procedure 2011, Vol. I, at 6.37.15.2. It follows, in my judgment, that Walker J applied the right test to the issues he had to decide; indeed, the contrary was not argued before him. At the heart of this appeal is a very different question: namely and with respect, whether having applied the right test, the Judge reached the right answer in holding that the SICL claim satisfied the "merits" test. Thirdly, in approaching A-S's contention on the appeal that the Judge reached the wrong answer on the "merits" test, some preliminary observations are appropriate at the outset: i) To my mind, careful and fact specific consideration is required before the Court embarks on extended consideration of an argument that jurisdiction is to be set aside because the claim has insufficient merit. The "merits" test, as already suggested, is set low; all that needs to be established is that the intended claimant could successfully resist an application for a Part 24 order. In many cases, it will, realistically, be plain that this test is satisfied; the alleged weakness of the underlying claim will thus not be a good reason for prolonging a dispute as to jurisdiction and the right course will be to defer such argument to the trial. As in the domestic Part 24 context, the Court should be astute to avoid mini-trials unsuited to summary disposal. Suggested "knock-out" challenges to jurisdiction, based on the alleged lack of merit in the underlying claim, may all too readily prove wasteful of time and costs. Conversely and low though the "merits" test is, the claim must satisfy it; jurisdiction is not to be established for a claim unfit to survive, in effect, a Part 24 challenge. A shroud of complexity, per se, is not by itself a reason for refusing to set aside jurisdiction in respect of a claim that can properly and summarily be determined to be devoid of merit. So far as concerns questions of law or construction, a highly relevant consideration is likely to be whether the claim is realistically capable of improvement at trial – or whether the Court is as well placed at the jurisdiction stage as it ever will be, to determine it once and for all. Where the merits test is properly in issue, the mere hope that additional evidence may materialise is unlikely to prove sufficient for the party seeking to uphold service out of the jurisdiction. ii) Freezing orders are an invaluable weapon in the Court's armoury in guarding against the risk of a defendant dissipating his assets and rendering himself judgment proof. Applications to set aside freezing orders on the basis of a lack of merit in the underlying claim, raise broadly the same cautionary considerations as those already discussed in connection with Part 11 challenges to jurisdiction and Part 24. A particular concern, however, is that freezing orders may well have devastating consequences for the party injuncted. In appropriate cases therefore, a party may have to justify the foundation on which the injunction is based. I return to these considerations below. Fourthly, it was common ground that the POA was to be interpreted by way of an "iterative process" in accordance with the principles laid down in Rainy Sky SA v Kookmin Bank [2011] UKSC 50; [2011] 1 WLR 2900. It does not seem to me that the determination of the present appeal requires any detailed discussion of the Rainy Sky or the exploration of the true ambit of the iterative process: cf, for example, Lord Grabiner QC, "The Iterative Process of Contractual Interpretation", (2012) 128 LQR 41. Instead, for present purposes, I would respectfully venture the following short summary, derived from [14] – [30] of Lord Clarke's judgment. i) The ultimate aim of contractual construction is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant. The reasonable person is taken to have all the background knowledge which would reasonably have been available to the parties in the situation in which they were in at the time of the contract. ii) The Court has to start somewhere and the starting point is the wording used by the parties in the contract. iii) It is not for the Court to rewrite the parties' bargain. If the language is unambiguous, the Court must apply it. iv) Where a term of a contract is open to more than one interpretation, it is generally appropriate for the Court to adopt the interpretation which is most consistent with business common sense. A Court should always keep in mind the consequences of a particular construction and should be guided throughout by the context in which the contractual provision is located. v) The contract is to be read as a whole and an "iterative process" (at [28]) is called for: "….involving checking each of the rival meanings against other provisions of the document and investigating its commercial consequences." I direct myself accordingly and turn to the principal Issues. ISSUE (I): Was SICL entitled to exercise the Put Option under the POA in respect of shares it did not own? (1) Embarking on the inquiry: In this case, I do not think that the Court has any realistic option but to entertain detailed argument on the merits of the underlying claim. For my part, the A-S "merits" challenge cannot be summarily rejected, to await a later trial; to the contrary, as a matter of first impression, it is far from apparent that the SICL case on this Issue had "a reasonable prospect of success" or could withstand a Part 24 application. Moreover, the point is one of construction and thus not open-ended – subject, of course, to the need to have regard to the factual matrix in accordance with the Rainy Sky and many previous authorities. Still further, if it should readily appear that the SICL case is devoid of merit, then the continuation of the freezing order could not be justified, despite understandable concern as to the dissipation of A-S's assets. I return presently to consider the impact on the argument, such as it may be, of the position in which the liquidators find themselves. (2) The language of the POA: I start with the wording of the POA; it provides powerful support for Mr. Morgan's argument. Cll. 1(A), (C) and (D) (all set out above) plainly contemplate a sale of the "Shares". For completeness, so too does cl. 1(B) (not set out above), which deals with a "Successive Put Option", with which this dispute is not concerned. These provisions therefore envisage that SICL has the beneficial ownership of the shares, as it seems to me, either at the time when the Put Option is exercised or, at the least, at the Put Option Closing Date. It may be remarked that the very notion of the "Put Option Closing" has no content other than in the context of a sale of the shares. Cl. 1(E)(i) is to the same effect. As a matter of language, cl. 1(E)(ii) is not free-standing or autonomous. Cl. 1(E)(ii) is only reached if SICL would otherwise have been in a position to proceed in accordance with cl. 1(E)(i) – which it would not be if it had already disposed of the shares. The wording of cl. 1(E)(ii) is emphatic in this regard. In the language they used the parties did not provide for cl. 1(E)(ii) to be an alternative to all that had gone before; instead, Cl. 1(E)(ii) is no more than an alternative "to the settlement in E(i) above". It follows that, as a matter of contractual language, it seems most unlikely that SICL was entitled to exercise the Put Option under the POA in respect of shares it did not own. However, as underlined by the Rainy Sky, matters do not end there and the rival constructions must be checked, having regard to the scheme and context of the POA and their respective commercial consequences. (3) The scheme of the POA: Very little needs to be added here. The structure of the POA - with cl. 1(E)(ii) positioned as it is – is to the same effect as the language. Further, the more restricted construction of cl. 1(E)(ii) fits naturally into the scheme of the POA as a whole; by contrast, a construction which treated cl. 1(E)(ii) as free-standing or autonomous would not fit happily into that scheme. It is convenient to defer, if briefly, discussion of cl.4 of the POA (see below). (4) Context and commercial consequences: For present purposes, importantly and as already underlined, the factual matrix of the POA is not in dispute. In my judgment, consideration of the context of the POA and the commercial consequences of the rival constructions reinforce the conclusion pointed to by the language and scheme of the POA, rather than calling for the Court to fashion some departure from them. First, I proceed on the footing (as set out in Akers 2) that the purpose of the POA was to support the value of the shares as an asset of SICL. That purpose is readily understandable, having regard to the fact that A-S was on both sides of the transaction creating the POA. In effect, A-S was taking a personal risk to shore up the balance sheet of his company, SICL. Secondly, however, it does not at all follow that the parties agreed to a scheme whereby SICL could dispose of the shares and thereafter exercise the put option. It is one thing for A-S to have assisted SICL in hedging the asset value of the shares against market volatility; it is a very different thing for A-S to have taken the risk of a market fall in the price of the shares after they had ceased to be an asset of SICL. By way of illustration, on Mr. Atherton's construction, SICL would be entitled to dispose of the shares at a favourable price – above the Put Option Price but below the Barrier Price – and keep the profit, while thereafter retaining the option of claiming the difference between the Put Option Price and a lower market price, should the shares (no longer owned by SICL) fall in value. Thirdly, there is nothing whatever in the factual matrix evidence before the Court to support the notion that cl. 1(E)(ii) was free-standing or autonomous, in other words giving rise to an independent obligation involving a "pure bet" on the value of the shares, once no longer an asset of SICL. On the material available to the Court, the POA was premised on the shares constituting an asset of SICL; it was not a bare contract for differences – a financial speculation on the value of the shares over a period of time. There is nothing to suggest that the parties entered into such a financial speculation or had any reason to do so. Fourthly, the more limited construction of cl. 1(E)(ii) advocated by Mr. Morgan in no way lacks commercial sense. On this construction, SICL would be entitled to take a commercial decision that it would retain the shares but enjoy the benefit of the put option hedge by obtaining the difference between the Put Option Price and the market price. Having regard to the reality of A-S's interest in SICL at the date of the POA such a construction makes eminently good commercial sense. Fifthly, I am not at all persuaded that the difficulties canvassed by Mr. Atherton as to cl. 4(B) tell against the narrower construction of cl. 1(E)(ii) to which I am otherwise inclined. Based on the matrix evidence, Mr. Atherton points to the fact that, to the knowledge of both parties to the POA, at the date of its inception, SICL did not have an unencumbered interest in the shares. That submission has force but only so far as it goes: namely, to support a contention that, on the face of it, neither party could have made good a case of material breach in respect of cl. 4(B). It does not, however, follow that (at least) at the Put Option Closing Date, there could not be a breach of cl. 4(D) of the POA, if SICL had already disposed of the shares in respect of which the Put Option was purportedly exercised. Given both the matrix evidence and the prior disposal of the shares, it is unnecessary to express a view as to whether there would have been a breach of cl. 4(D) of the POA, in the event that SICL had owned the shares at the Put Option Closing Date but subject to security interests; that question simply does not arise. Pausing here, on the basis of the material currently before the Court, I am unable to accept that the SICL case on Issue (I) has a reasonable prospect of success or could survive a Part 24 challenge. (5) The position of the liquidators: I confess to considerable sympathy for the position of the liquidators, in particular given the facts or assumptions outlined above as to A-S's conduct. I readily accept that the liquidators do not yet have a full picture as to the affairs of SICL and that they are continuing with their investigations. If I thought that there was any real prospect of such further investigations uncovering material which cast doubt on the matrix evidence thus far available to the Court, I could easily be persuaded that the Court should not now determine the merits of Issue (I) adversely to SICL. Such, however, is not the case. As it seems to me, the liquidators have no more than a very generalised hope that something may turn up; there is not even a hint as to what that "something" might be and it is not at all easy to see what it could be. With a measure of reluctance, I do not think that can suffice to maintain the grant of permission to proceed in this jurisdiction and the freezing injunction. (5) Conclusion on Issue (I): Differing with respect from the Judge, if perhaps after the opportunity for a more detailed consideration of this Issue, I conclude that SICL has no reasonable prospect in contending that it was entitled to exercise the Put Option under the POA in respect of shares it did not own. I would therefore allow the appeal on Issue (I). This conclusion is sufficient to require the appeal to be allowed, so that permission to proceed in this jurisdiction and the freezing order must be set aside. It follows that Issues (II) and (III) are academic but, in deference to the arguments advanced, I shall deal with those Issues, if only briefly. ISSUE (II): Did the Notice conform to the contractual requirements of the POA? In a nutshell, the Judge held that SICL had a realistic prospect of success in contending that the Notice was compliant with the POA and therefore valid. Save to the extent that Issue (II) stands or falls with the outcome of Issue (I), where no more need be said, I agree with the Judge. Mr. Morgan's first two submissions were that the Notice was non-compliant in that it did not specify the number of shares being sold or the amount payable. If, however, it had been open to SICL to rely on cl. 1(E)(ii), then there is at least a realistic prospect that these criticisms are not well-founded, essentially for the reasons given by Mr. Atherton. On this footing, SICL could not specify the number of shares being sold, because a sale was not envisaged. Nor, at the time of the giving of the Notice, could SICL know what the amount payable would be. I am not at all persuaded – certainly to a Part 24 standard – that the POA obliged SICL to do something which it could not do or that it precluded the giving of the Notice in advance of the Put Option Closing Date. As it seems to me, these submissions of Mr. Morgan prove too much; they would potentially strike down the giving of a perfectly sensible notice, even when SICL was opting for settlement under cl. 1(E)(ii) where it would otherwise have been in a position to proceed in accordance with cl. 1(E)(i). As it is, I am satisfied that, at the very least, there would have been a realistic prospect of SICL contending that a reasonable recipient, with knowledge of the terms of the POA, would have been left in no doubt as to how the Notice was intended to operate: Mannai Ltd v Eagle Star Ass. Co. Ltd. [1997] AC 749, at pp. 767 – 769, per Lord Steyn. Mr. Morgan's third submission went to an alleged failure to identify an unambiguous Put Option Closing Date. I have already summarised the Judge's reasons for rejecting this submission (see above); I respectfully agree with those reasons and have nothing to add. ISSUE (III): Was there sufficient evidence of delivery of the Notice in the manner required by the POA, by the time of its expiry at midnight on the 30th March, 2011? Earlier, when summarising the judgment, I recorded in some detail the facts there set out as to the delivery of the Notice to the Al Khobar post office and the inference drawn by the Judge as to it reaching the relevant PO Box (situated in that post office) in the course of the same day. I acknowledge the force in Mr. Morgan's submission that if there was ever going to be evidence filling the gap in SICL's case as to what happened to the Notice after it reached the Al Khobar post office, then SICL had ample time prior to the hearing before Walker J to adduce it. That said, I do not think it would be right to conclude that SICL would have had no realistic prospect of succeeding on this Issue at trial. Accordingly, in my judgment, the Judge was right to hold that although SICL's evidence, if not augmented, might not carry the day at trial, SICL had done enough to surmount the present jurisdictional challenge. As it is, my conclusions on both Issues (II) and (III) are academic and, in the light of my conclusion on Issue (I), I would allow the appeal. Mr Justice Ryder I have had the opportunity of reading in draft the judgments of Lord Justice Lloyd and Lord Justice Gross. I respectfully agree with their reasoning, the conclusions of them both in respect of Issue (I) and of Lord Justice Gross in respect of Issues (II) and (III). Having regard to the conclusions on Issue (I), I too would allow the appeal. Lord Justice Lloyd Lord Justice Gross has set out the relevant facts and contractual provisions. From those it is apparent that, on the reading contended for by Mr Morgan on behalf of the appellant, clause 1(E)(ii) works as an alternative to clause 1(E)(i), as it is said to be in its opening words. If the put option is exercised, then on the put option closing date, defined in clause 1(D), A-S becomes liable to pay to SICL (within 60 days) the put option price (£11.97) for all the shares to be sold under the put option, as specified in the put option exercise notice given under clause 1(C), and on receipt of the money SICL must transfer the relevant number of shares to A-S, free of any incumbrances. If, but only if, the listed price of the shares is lower than the option price on the put option closing date, then SICL has the choice of using clause 1(E)(ii) as an alternative. Of course if the listed price is higher than the put option price, then SICL would do better to sell the shares at the listed price on the market, rather than to sell them to A-S at the put option price, leaving him to take the profit (if he wishes) by selling the shares on the market (subject to any fluctuation of the price during the 60 days). But if the listed price is indeed lower than the option price, SICL's commercial interest can be satisfied by retaining the shares and receiving from A-S the difference between the listed price and the put option price. The evidence indicates that the purpose of the put option agreement was as a hedge, to reinforce the balance sheet of SICL against the risk that its holding of the shares might otherwise decline in value, because of changes in the market, below the put option price. On that basis, that reading of the agreement, and in particular of clause 1(E), makes sense. So long as the agreement was in place and the put option was exercisable, the shares could be regarded as worth whichever was the higher of the listed price and the put option price. If, however, SICL had in the meantime sold the shares then there seems to be no underlying reason why the value of the shares, no longer on SICL's balance sheet, should be of any relevance or interest to SICL. If, as Mr Atherton argued, and the judge accepted to be reasonably arguable, clause 1(E)(ii) could be used even if SICL did not own any of the relevant shares, then its function would be entirely different. It would be capable of operating as a free-standing obligation constituting a bet, or, to put it in more technical language, a contract for differences. If the listed price of shares (albeit no longer held by SICL) declined below £11.97, then SICL could collect the difference, multiplied by any number up to 32.6 million, by serving notice on A-S under the option agreement at any time (or times) up to the expiry of the agreement. It could not do so for more than 32.6 million shares in aggregate, because of the provision in clause 1(A) under which the option ceases to be exercisable on the delivery by SICL to A-S of one or more notices covering the aggregate of all the shares pursuant to clause 1(C). But SICL would have no commercial interest in the value of the shares as such, once it had sold the shares, and accordingly, the nature of its rights under clause 1(E)(ii) would, in that event, be fundamentally different from both (a) the position while it does still own the shares and also (b) the position under clause 1(E)(i). If SICL had sold the shares, it may well be that it had thereby realised a price for the shares in excess of the put option price (though less than the barrier price of £12.50), since if it sold for less than £11.97, it would have done better to have exercised the put option. It would therefore have the best of both worlds. It could realise the shares at a price at which it did not need the support of the POA, but it could continue to rely on clause 1(E)(ii) to collect from A-S the difference between the listed price and the put option price (if higher) even though the price or value of the shares was by then of no relevance to SICL. I agree with Gross LJ that this is not the correct reading of the agreement, and that SICL does not have a sufficiently arguable case in favour of that to justify service of the proceedings out of the jurisdiction. It seems that the case was differently argued before the judge. It is apparent that he thought that there might be much to be said for Mr Morgan's argument at trial: see his paragraph 20 and in particular the reference, entirely justified in my view, to "requirements which only made sense in the context of an actual sale of shares". He did not approach the matter on the basis that he should determine the case on his own view, on the available information, of the correct construction of the agreement. Like Gross LJ, I conclude that it is right and necessary to decide the appeal on the basis of the true construction of the agreement, that we are in a position to do so, and that the right answer is that for which the appellant contends. Neither the contractual language nor commercial sense seems to me to support the view that the agreement should be read as Mr Atherton contends. In my view SICL has no reasonable prospect of success in arguing that clause 1(E)(ii) is independent and free-standing, available to be used by SICL even if it did not own the shares on the put option closing date and therefore could not complete a sale of the shares under clause 1(E)(i). I therefore agree that the appeal should be allowed on issue I. I do not need to add anything to what Gross LJ has said about the other issues.

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: British Columbia (Securities Commission) v. Pioneer Ventures Inc., 2021 BCCA 1 Date: 20210104 Docket: CA46666 Between: British Columbia Securities Commission Respondent (Respondent) And Pioneer Ventures Inc. Appellant (Applicant) Before: The Honourable Madam Justice Newbury The Honourable Madam Justice Saunders The Honourable Mr. Justice Harris On appeal from:  A decision of the British Columbia Securities Commission, dated December 30, 2019 ( Re Application to revoke certain orders , 2019 BCSECCOM 454). Counsel for the Appellant (via videoconference): R.N. Pelletier Counsel for the Respondent (via videoconference): D.J. Chapman J.L. Whately Place and Date of Hearing: Vancouver, British Columbia November 24, 2020 Place and Date of Judgment: Vancouver, British Columbia January 4, 2021 Written Reasons by: The Honourable Madam Justice Newbury Concurred in by: The Honourable Madam Justice Saunders The Honourable Mr. Justice Harris Summary: Appeal of decision by Securities Commission that freeze orders were validly issued in the public interest and should not be revoked. Held: Appeal dismissed. Freeze orders do not require that an onerous evidentiary burden be met. The Commission was not clearly wrong to conclude that the allegations were serious and that the freeze orders were issued in the public interest, nor did the Commission exercise its discretion on a wrong principle or fail to consider all relevant factors. There was evidence before the Commission to justify the orders, including allegations of undisclosed insider trading, misrepresentations in public disclosure and self‑dealing. Reasons for Judgment of the Honourable Madam Justice Newbury: [1] This appeal — and it is a statutory appeal, not a petition for judicial review — requires us to consider the granting and revocation of so‑called ‘freeze orders’ made by the Securities Commission under the Securities Act , R.S.B.C. 1996, c. 418. These are orders granted under s. 151 of the Act (which section has since been repealed) that required persons in control or possession of funds, securities or other property of alleged wrongdoers to hold such property or refrain from withdrawing it from bank or other accounts; or to hold it for authorities having possible claims, such as interim receivers or liquidators in bankruptcy. Under s. 171, such orders could be revoked by the Commission where it would not be “prejudicial to the public interest” to do so. (I have attached as a schedule to these reasons the relevant statutory provisions that were in force at all material times.) [2] The Commission has described freeze orders as ‘discretionary tools’ intended to preserve the status quo , “ensuring that the frozen property is not dissipated or destroyed before the Commission is in a position to determine what, if any, further steps or orders in the public interest should be made under the Act .” (See Re Amswiss Scientific Inc. [1992] 7 B.C.S.C.W.S. 12 at 32.) The Commission has interpreted its discretion to make such orders very broadly. It has said it is “not possible to state an evidentiary test that must be met in every case to support a freeze order”. (See H&R Enterprises Inc. (Re) [1997] 41 B.C.S.C.W.S. 18 at 7.) It has rejected the notion that before issuing a freeze order, the Commission must find that the person whose assets would be subject to the order has been dissipating, removing or disposing of assets or may do so in future; and the notion that a “connection” must be shown between the frozen property and the wrongdoing. (See Re Samji 2012 BCSECCOM 91 at paras. 33–7.) [3] Freeze orders have been considered only rarely by this court on appeal. We were referred to two of those occasions — first, in Exchange Bank & Trust Inc. v. British Columbia Securities Commission 2000 BCCA 389 (“ EBT ”), where Mr. Justice Braidwood in chambers denied leave to appeal the Commission’s refusal to revoke a freeze order; and second, in Zhu v. British Columbia (Securities Commission) 2013 BCCA 248, where a division of the Court dismissed an appeal from a similar refusal. [4] In EBT , Braidwood J.A. set out the Commission’s reasons at length with approval, beginning at para. 12 of his reasons. The passage quoted included the Commission’s observations that: In seeking an investigation order, Commission staff does not face an onerous evidentiary burden. Staff must show that the circumstances relate to the trading of securities and is expected to provide a basis on which to conclude the subjects of the proposed investigation have acted, are acting or may act in contravention of the securities laws of British Columbia or of another jurisdiction or in a manner contrary to the public interest. One of the grounds for making an order under section 151 appears to require nothing more than the existence of an investigation order, or the intention to issue one. However, a freeze order generally has far more serious and immediate consequences than an investigation order. Property of the alleged wrongdoers is immediately affected and the property of innocent third parties can be captured in the freeze. The Commission must therefore consider the seriousness of the allegations and the evidence supporting them so it can weigh the threat to the public interest against the potential consequences of the order. That said, freeze orders are often made at a very early stage of an investigation. They are not determinative of the facts in issue; they are made to preserve property until the facts can be established, either through investigation or through a hearing before the Commission. [Emphasis added.] Braidwood J.A.’s order was upheld on appeal for reasons that focussed on procedural fairness: see 2000 BCCA 549. [5] In Zhu , Commission staff were investigating serious allegations against the appellants, including fraud, participation in a “Ponzi” scheme, failing to file a prospectus when required and selling certain securities contrary to the Act. These allegations had not been heard by the time the Executive Director applied for an extension of various “temporary” orders designed to prevent future violations of the Act , including a freeze order made April 30, 2012. The appellants applied for an order revoking that freeze order under s. 171, but for unexplained reasons did not apply for the revocation of a second freeze order made on May 4, 2012. [6] The Commission found that the evidence fell “far short of prima facie evidence of a Ponzi scheme” or of fraudulent conduct. As a result, it concluded that it was neither necessary nor in the public interest to extend the temporary orders. However, it declined to vacate the freeze order. This decision was the subject of the appeal to this court. [7] Speaking for the Court, Madam Justice Prowse noted at the outset of her analysis that the interpretation and application of s. 171 of the Act had not been properly raised. She therefore restricted her comments to the question of whether the Commission’s refusal to vacate the April freeze order was reasonable . Zhu was decided prior to the recent changes in administrative law made by the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v. Vavilov 2019 SCC 65 regarding statutory appeals from administrative tribunals; see especially paras. 36–52. [8] Prowse J.A. described the parties’ positions at paras. 51–6 of her reasons and then began her analysis of the law at para. 57. She noted Amswiss , EBT and H&R Enterprises . She agreed with the Executive Director that the “approach adopted by the Commission and reflected in these decisions is clearly within their mandate and does not lend itself to guidance by this Court by way of tests, mandatory criteria, or other guidelines which would tie the hands of the Commission.” She continued: I agree with the submission of the Executive Director in this respect, particularly in the circumstances of this case. I would decline the appellants’ invitation to set down guidelines, criteria or mandatory tests for the exercise of the Commission’s discretion under either s. 151 or s. 171 of the Act . ... In assessing the reasonableness of the Commission’s decision against this backdrop, it is important to note that, in this case, there was an admitted breach of s. 61 of the Act , and evidence of other breaches of the Act , albeit not to the level of a prima facie case. ... In all of the circumstances, having regard to the breadth of the Commission’s mandate to act in the public interest in the area of its expertise, and the broad discretion available to it under s. 171 , I find that the Commission’s decision not to revoke the freeze order was reasonable. [At paras. 65–6; emphasis added.] [9] The case at bar involves quite different facts and, since it arises post‑ Vavilov , engages different standards of review from those applied in the past to the appellate review of the Commission’s orders. (See especially Pezim v. British Columbia (Superintendent of Brokers) [1994] 2 S.C.R. 557.) In Vavilov , the Supreme Court reversed its previous jurisprudence (last reformulated in Dunsmuir v. New Brunswick 2008 SCC 9) concerning standards of review applicable to appeals like this one, i.e., statutory appeals from decisions of administrative tribunals. The Court adopted the principle that “where the legislature has indicated the applicable standard of review, courts are bound to respect that designation, within the limits imposed by the rule of law.” (At para. 35.) It continued: this principled position also requires courts to give effect to the legislature’s intent, signalled by the presence of a statutory appeal mechanism from an administrative decision to a court, that the court is to perform an appellate function with respect to that decision . ... Where a legislature has provided that parties may appeal from an administrative decision to a court, either as of right or with leave, it has subjected the administrative regime to appellate oversight and indicated that it expects the court to scrutinize such administrative decisions on an appellate basis. This expressed intention necessarily rebuts the blanket presumption of reasonableness review. ... It should therefore be recognized that, where the legislature has provided for an appeal from an administrative decision to a court, a court hearing such an appeal is to apply appellate standards of review to the decision. This means that the applicable standard is to be determined with reference to the nature of the question and to this Court’s jurisprudence on appellate standards of review. Where, for example, a court is hearing an appeal from an administrative decision, it would, in considering questions of law, including questions of statutory interpretation and those concerning the scope of a decision maker’s authority, apply the standard of correctness in accordance with Housen v. Nikolaisen ... Where the scope of the statutory appeal includes questions of fact, the appellate standard of review for those questions is palpable and overriding error (as it is for questions of mixed fact and law where the legal principle is not readily extricable): see Housen ... . [At paras. 35–7; emphasis added.] [10] By the same token, one assumes the exercise of a discretion by a statutory tribunal is now subject on appeal to the standard of review described in cases such as Friends of the Oldman River v. Canada (Minister of Transport) [1992] 1 S.C.R. 3 at 76-7 and Penner v. Niagara Regional Services Board 2013 SCC 19 at para. 27. Chronology [11] Having laid out the legal context of this case, I turn to a chronology of the material facts. · November 23, 2016 — Based on information from a complainant not identified at the time, a Commission investigator formed the view that an individual (whom I will refer to as “Mr. Z”), the sole director and officer of the appellant Pioneer Ventures Inc. (”Pioneer”), was an insider and de facto director of a publicly-listed company, referred to as “Yco”. The investigator reviewed trading information of Yco, which indicated that Pioneer was an active trader and seller of shares of Yco. Mr. Z had not made any filings required of insiders or directors of Yco. The investigator’s source also alleged that Mr. Z was “taking and using corporate funds for his own personal purposes, including through other companies owned by [him]” and had been “stealing corporate opportunities from [Yco], by setting up other companies that benefitted from what are supposed to be the Company’s transactions.” In the course of a sworn interview, the complainant did acknowledge that Yco’s directors had approved the payment of fees to Mr. Z and related companies. · November 29, 2016 — The Chair of the Commission issued an investigation order in respect of Mr. Z, Pioneer, Pinto Ventures Ltd. and Yco. · June 5, 2018 — A Commission investigator recommended that the investigation order be amended to clarify its scope and name additional subjects. The investigator noted that according to the evidence gathered to date, Yco was a “developmental stage medical marijuana company”; that it had entered into a land lease and purchase agreements for marijuana-growing equipment with companies controlled by Mr. Z, including Pioneer; and that Mr. Z appeared to be on “both sides” of the agreements — a fact not disclosed by Yco in its public filings. · May 22, 2019 — The Chair of the Commission granted a freeze order in respect of Pioneer’s accounts at two banks. A typographical error in the original order was corrected by subsequent order dated May 24, 2019. · May 27, 2019 — Pioneer applied under s. 171 of the Act for an order revoking the freeze orders. The application was made by letter from counsel for Pioneer, who submitted that the orders represented a “substantial overreach” of the Commission’s powers. He quoted a statement from Amswiss that: the Commission must ... consider the seriousness of the allegations the evidence supporting them so it can weigh the threat to the public interest against the potential consequences of the [freezing order]. Counsel argued that the evidence considered by the Chair in granting the freeze orders “contain[ed] … no evidence whatsoever” concerning the seriousness of the allegations or how the public interest was served by the granting of the freeze orders. It was said that since the Commission had had no such substantive evidence when it granted the freeze orders, the orders were “improper and should not have been granted.” · June 10, 2019 — Counsel for the Executive Director filed his response, addressing both the validity of the freeze orders under s. 151 and the application to revoke them under s. 171. On the latter point, counsel submitted that the onus was on Pioneer as applicant to demonstrate that it would not be prejudicial to the public interest to revoke the orders. He argued that since Pioneer had not tendered any evidence to this effect, it had not discharged its onus and the application should be dismissed. With respect to the validity of the freeze orders themselves, counsel noted that certain parties in other investigations before the Commission had challenged the constitutional validity of s. 151 and that the Attorney General, under s. 43(3) of the Administrative Tribunals Act , S.B.C. 2004, c. 45, had required the Commission to refer the matter to the Supreme Court of British Columbia as a stated case. (I understand the stated case has now been heard, but not yet decided, by the Supreme Court: see In the Matter of certain Applications Before the British Columbia Securities Commission , Vancouver Registry, Docket VA S1914058.) Counsel in the case at bar recommended that the Commission “as ‘master of its own procedures’ [should] defer ruling on Pioneer’s submission that s. 151 incorporate[s] factors, a test, or guidelines beyond what is in the Act as this issue will be dealt with by the Supreme Court.” · June 14, 2019 — Counsel for Pioneer filed a reply, submitting that the Executive Director’s position was “both tautological and contrary to the principles of fundamental justice” and that: In any event, Pioneer requests that the Commission conclude that it cannot be prejudicial to the public interest to revoke any Order of the Commission that was granted without evidence and without compliance with the law in force in British Columbia. The evidentiary burden upon the Executive Director in respect of obtaining the Freeze Orders in the first place is incredibly low and the failure in this case to even attempt to meet such burden renders the granting of the Freeze Orders to be itself prejudicial to the public interest and contrary to the most basic principles of fundamental justice. In other words, refusing to revoke the Freeze Orders would itself be prejudicial to the public interest. [Emphasis added.] Reasons of September 5, 2019 [12] The Commission elected to treat the Executive Director’s application to defer the hearing of the application as an adjournment application. Pioneer opposed the Director’s request on the basis that it would be an abuse of process. Pioneer said it was content not to challenge the constitutional validity of s. 151 and not to ask that the panel craft “any particular test or approach” to s. 151. [13] The Commission set out paras. 151 and 171 of the Act and s. 8.10(a) of Commission Policy 15‑601. The latter provides: Discretion to revoke or vary —A party may apply to the Commission for an order revoking or varying a decision. Generally, the Commission does not hold a hearing, it considers written submissions and makes its decision. Before the Commission changes a decision, it must consider that it would not be prejudicial to the public interest. This usually means that the party must show the Commission new evidence or a significant change in circumstances. [Emphasis added.] [14] The Commission adopted the reasoning of the panel in Re BridgeMark Financial 2019 BCSECCOM 248 that in most circumstances, the intent of the Act is that “the tribunal of the Commission, with its presumed expertise in the subject matter, is best placed to consider all questions of law and assessments of the public interest that arise from the interpretation of the Act and acts taken by the Commission in furtherance thereof.” The Executive Director’s application for an adjournment was dismissed. [15] Turning to Pioneer’s application under s. 171, the Commission confirmed that in usual circumstances, the onus is on the applicant to show that revoking the order would not be prejudicial to the public interest. (Citing Re Bossteam 2012 BCSECCOM 377 at para. 70.) The Commission continued: This general guidance makes perfect sense in the context of section 171 applications where the public interest considerations already form part of the record . In most cases these applications are heard by the original decision maker, and occur following orders issued after substantial proceedings have taken place up to and including hearings on the merits and orders relating to sanctions for misconduct. In the present matter, however, no allegations have been made, no notice of hearing has been issued and the Applicant has from the Commission only the Investigation Orders and Freeze Orders upon which to base its Application. Furthermore, as this panel did not grant the underlying orders, we do not have the context and considerations from the original proceedings, as is often the case in a section 171 application. In these circumstances, applying the onus on the Applicant to show new evidence or a significant change of circumstances makes little sense. [At para. 43; emphasis added.] [16] The Commission found that it was “impossible” to consider whether revoking the freeze orders would or would not be prejudicial to the public interest “in the absence of consideration of at least some of the underlying evidence.” In the result, it adjourned Pioneer’s application and ordered the Executive Director to provide “the evidence, if any, to the Applicant that was provided to the Chair for her consideration before issuing the Investigation Orders and the Freeze Orders sufficient, in the Executive Director’s judgement, to sustain the Freeze Orders.” [17] Between October and December, 2019, the Executive Director provided Pioneer with copies of an affidavit of a member of the Commission’s investigative staff to which he exhibited copies of two memoranda. These had been submitted to the Chair in support of the original investigation orders. The first memorandum was redacted to protect the identification of a complainant; the second memorandum was essentially unredacted. Pioneer filed further submissions and a reply was filed on November 1, 2019. Reasons of December 30, 2019 [18] After receiving the further information and submissions, the Commission panel (being the same panel that had made the September orders) issued a second set of reasons on December 30, 2019. It began by describing the parties’ respective positions. Pioneer continued to assert that the Chair had not had before her any evidence whatsoever to support her exercise of discretion to issue the freeze orders in the first instance and that the Commission had “entirely failed to provide even a scintilla of the required evidence of the public interest, or consideration thereof, to maintain the Freeze Orders”. (At para. 7.) It was said the memoranda expressed only “concerns”, were based on hearsay and that the Commission had not been “forthright” in its dealings with the subjects. Pioneer did acknowledge that the two memoranda purported to show that the same individual was sole director and officer of Pioneer and of another company, “Xco”, and that Pioneer and Xco had together sold more shares of Yco than any other person. In addition: The Applicant also provided information regarding an individual who the Applicant stated was “obviously the Complainant”. The Applicant described civil litigation between [Mr. Z] and the Complainant and included a copy of an Interim Order of the Court of Queen’s Bench of Alberta (Interim Order), which enjoined the Complainant from making further defamatory statements against [Mr. Z]. The Applicant submitted that the statements of the nature and type alleged to have been made by the Complainant to the Commission were of the same nature and type as those subject to the Interim Order. The Applicant says that this is “hugely problematic for the Commission and for the proper administration of justice in this matter….” . . . The Applicant submitted that it remains impossible for the Applicant to tender evidence to satisfy the usual onus in a section 171 application “as the evidence submitted by the Commission which is to be addressed by [the Applicant] has either been withheld or is nonexistent”. This amounts to the Commission asserting that the granting of an investigation order is sufficient, without more, to grant a freeze order . The Applicant submitted that the Chair accepted the opinion and conclusions of an investigator in respect of the evidence of the public interest rather than having such evidence put to the Chair and having her review such evidence and draw her own opinions and conclusions. The Applicant says that this is clearly wrong in law and on the particular facts of this matter and constitutes a breach of procedural fairness and fundamental justice. [At paras. 9, 12; emphasis added.] [19] For her part, the Executive Director summarized the information gathered by investigators that had led to the “concerns” set out in the memoranda. This information included the following: o Securities of Yco were publicly traded o [Mr. Z] was actively involved in the business of Yco including finding projects, asset acquisition opportunities, private financings and preparing public filings o The Complainant’s serious allegations against [Mr. Z] and members of his family o The Applicant and Xco sold more shares of Yco than any other person in a specified period o [Mr. Z] and [Mr. Z]’s family members were trading in Xco shares without public disclosure o Yco had entered into several agreements for investor relations, leases of land and product purchases with companies controlled by [Mr. Z] (including named Subjects) and his son (also a named Subject), which agreements were not disclosed by Yco o [Mr. Z] made decisions for Yco including hiring and firing The Commission investigators set forth their apprehensions that the information outlined in the Memoranda raised significant concerns that [Mr. Z] may have been acting as an unreported de facto director of Yco and, if so, Yco had failed to comply with section 85 of the Act and [Mr. Z] had failed to file insider trading reports for the trading in securities of Yco that the Applicant and Xco had made. Furthermore, if [Mr. Z] were a de facto director of Yco, given [Mr. Z]’s involvement with Yco summarized above, Yco’s public filings may have contained misrepresentations. [At paras. 15–16; emphasis added.] [20] The Director submitted that the burden needed to support the issuance of an investigation order is “not an onerous one”, but that “there must be trading in securities and a basis to conclude that the subjects of the requested order acted or may act in a manner contrary to the public interest.” (At para. 17.) Freeze orders, she said, may be issued even before an investigation is commenced and a quick response is often necessary to “enhance the Commission’s capacity to protect the capital markets.” Echoing statements made in Re Samji , supra , she submitted that the issuance of a freeze order does not require evidence that the property sought to be frozen is “closely involved with” the alleged wrongdoing or the dissipation or threatened dissipation of the assets; nor does it require evidence of a connection between the frozen assets and the wrongdoing. (At para. 19.) [21] In the Director’s submission, there had been evidence before the Chair prior to the granting of the freeze orders, i.e., the two memoranda prepared by staff. Although the Director was not prepared to disclose the identity of the complainant, she observed that his or her reliability could be tested at a later stage if the matter proceeded. In the meantime, it was said the order had been properly issued and that the applicant had provided no evidence of any prejudice or inconvenience caused to the public by the freeze orders. (At para. 21.) [22] The panel began its own analysis at para. 22 of the December reasons. It rejected Pioneer’s assertion that there was “no evidence at all” to support the freeze orders. This assertion suggested that a high standard of evidence was required, reflecting a “misapprehension by the Applicant of what the Act require[d].” (At para. 23.) The panel noted that freeze orders may be issued as soon as an investigation is proposed, as well as during and after an investigation. They may be based on “very preliminary information” and their objective is to maintain the status quo . [23] In this case, the issuance of the freeze orders in May 2019 had been supported by the second memorandum, which identified further subjects for the investigation and further potential misconduct. The length of time between the second memorandum and the issuance of the freeze orders had been reasonable, given the need to obtain and review financial records and verify details before the requests for freeze orders could be presented to the Chair. Like investigation orders, freeze orders do not require that the Commission satisfy an onerous evidentiary burden. The Commission continued: Having reviewed the evidence that was before the Chair prior to issuing the Freeze Orders, we agree with the Executive Director that the Chair’s exercise of discretion to issue the Freeze orders required consideration of the public interest in all of the circumstances known at the time . The information in the Memoranda provided to the Chair before she issued the Investigation Orders indicated the possibility of multiple breaches of securities law including failures to make required disclosure of [Mr. Z]’s de facto directorship of Yco, undisclosed insider trading by [Mr. Z] and members of his family, failure to report trading in securities of Yco by [Mr. Z], misrepresentations in public documents of Yco and possible self- dealing by [Mr. Z]. The affidavits in support of the Freeze Orders identified assets of the Applicant, which provided the opportunity to freeze such assets and maintain the status quo . [At para. 30; emphasis added.] [24] Accordingly, the Commission found that Pioneer’s contention there had been “no evidence” before the Chair was “simply not correct”. The information in the affidavit and memoranda satisfied the burden described in the chambers decision in EBT and fully justified the issuance of the freeze orders. As far as the public interest was concerned, the Commission found that the public interest in issuing the freeze orders was “compelling”. The panel quoted from EBT, where Braidwood J.A. had approved the following reasoning of the Commission: In our view, it is not possible to state an evidentiary test that must be met in every case to support a freeze order….Where a freeze order is imposed to preserve property at an early stage of an investigation, as in this case, the Commission expects staff to review the status of the order on the basis of the emerging evidence as the investigation unfolds and, if appropriate, to apply to have an order varied or revoked . [At para. 33; emphasis added.] The panel concluded that the freeze orders had been validly issued “in the public interest”. [25] With respect to Pioneer’s application for the revocation of the freeze orders, the Commission observed that Pioneer had produced no evidence and, in the Commission’s analysis, had failed to make any compelling argument in support of the conclusion that revoking the orders would not be prejudicial to the public interest. This application was also dismissed. [26] Leave to appeal the Commission’s order was granted to Pioneer by a justice of this court on February 19, 2020. On Appeal [27] In this court, Pioneer stated only one ground of appeal in its factum, namely that: the Commission erred in law, or alternatively in fact and law, in finding that the Freeze Orders were validly issued and thereon [ sic ] dismissing the Application. This ground of appeal is stated in such general terms that no particular error of law or fact can be gleaned from it. Such compendious “grounds” are unhelpful to this court and should be avoided. From the Argument portion of the factum, however, I draw the following grounds of appeal, namely that the Commission erred in equating the evidentiary burden required to issue an investigation order with that required for a freeze order; and that it failed to consider the public interest before granting the freeze orders. [28] In addition, counsel in his oral submissions in this court contended that the Commission’s decision represented a “failure of fundamental justice” or a breach of procedural fairness. The Evidentiary Burden [29] In arguing that the Commission equated the evidentiary burdens required for investigation orders with those required for freeze orders, Pioneer relied specifically on the panel’s comment at para. 29 of its reasons that the following passage quoted at para. 12 by Braidwood J.A. in EBT is “also applicable to a freeze order”: In seeking an investigation order, Commission staff does not face an onerous evidentiary burden. Staff must show that the circumstances relate to the trading of securities and is expected to provide a basis on which to conclude the subjects of the proposed investigation have acted, are acting or may act in contravention of the securities laws of British Columbia or of another jurisdiction or in a manner contrary to the public interest. [Emphasis added.] To ensure that this it will not be taken out of context, I also note the two paragraphs that followed that passage: One of the grounds for making an order under section 151 appears to require nothing more than the existence of an investigation order, or the intention to issue one. However, a freeze order generally has far more serious and immediate consequences than an investigation order. Property of the alleged wrongdoers is immediately affected and the property of innocent third parties can be captured in the freeze. The Commission must therefore consider the seriousness of the allegations and the evidence supporting them so it can weigh the threat to the public interest against the potential consequences of the order. That said, freeze orders are often made at a very early stage of an investigation. They are not determinative of the facts in issue; they are made to preserve property until the facts can be established, either through investigation or through a hearing before the Commission. [ At para. 12; emphasis added.] [30] I do not read the foregoing as “equating” the evidentiary burden required for an investigation order with that required for freeze orders. As I read the reasons, the Commission is saying simply that like investigation orders, freeze orders do not require that a heavy evidentiary burden be met. Although the consequences of a freeze order may be onerous in particular circumstances, the jurisprudence is replete with references to the fact that the realities of modern technology and instantaneous securities transactions are such that in the absence of freeze orders, wrongdoers could avoid or circumvent penalties or compensation ultimately ordered by the Commission, thus rendering the entire process meaningless. [31] The Commission must of course always act in what it believes is the public interest, no matter what type of order is being contemplated. It seems to me likely that in most cases, the public interest considerations that are relevant to the granting of an investigation order will at least overlap with, if not be the same as, those that are relevant to the granting of a freeze order. As for the seriousness of the allegations, this may change as the investigation proceeds, as occurred in this case. There may be circumstances in which the allegations are not at all serious, or in which serious allegations are withdrawn, leaving only wrongdoing that would merit nothing more than a small fine or even only a ‘cease and desist’ order. In these situations, it might well be appropriate for the Commission to conclude a freeze order is not necessary in the public interest, or to vary the terms of an existing order. Or it may be that a large amount of money belonging to innocent parties is caught by a freeze order and it becomes apparent that the effects of the order are not justifiable in the public interest. [32] I suspect, however, that such situations are fairly rare. In most situations, I would suggest that the existence of allegations that if proven would constitute non‑trivial contraventions of the Act and that could result in adverse financial consequences (be they penalties, damages or restitutionary orders of some kind) to the alleged wrongdoers would justify the issuance of a freeze order. As the Commission acknowledged at para. 33 of its December reasons (quoted supra ), Commission staff is expected to monitor the status of freeze orders and if appropriate, apply to have them revoked or varied. If it becomes apparent the complaining party is not to be believed (as was argued unsuccessfully by Pioneer in this case) or that the freeze order is causing serious harm to innocent members of the public, the onus under s. 171 might well be met. Or the concerns underlying a freeze order might be addressed by proof of financial means of the alleged wrongdoer. None of the foregoing situations existed in this case; nor had a long delay in the bringing of charges against the subjects of the investigation occurred. [33] The Commission found that the public interest in issuing the freeze orders was “compelling” in the present circumstances. These circumstances consisted primarily of a review of the allegations made by the complainant, which were not frivolous, and a recounting of the specific facts alleged in support. By their nature, allegations of breaches of the Act will almost always involve conduct that may be contrary to the public interest in having securities markets that are transparent, honest and efficient and that inspire investor confidence. I am unable to say the Commission was clearly and palpably wrong in concluding that the freeze orders in this case were issued in the public interest, or that the panel exercised its discretion on a wrong principle or failed to consider all relevant factors. [34] I take further comfort from the Commission’s September reasons for my conclusion that the tribunal did not equate the evidentiary burdens required for investigatory orders and freeze orders respectively. In those reasons, the Commission fully accepted the passage from Amswiss in which it acknowledged that a freeze order generally has more serious and immediate consequences than an investigation order and that the Commission must consider all the evidence supporting the freeze order “so that it can weigh the threat to the public interest against the potential consequence of the order”. (At para. 41.) The Executive Director was given the opportunity to provide the evidence on which she had relied, and did so. At para. 31 of its December reasons, the Commission found that: The information contained in the affidavits and Memoranda satisfies the evidentiary burden set forth in [ EBT ] and thereby fully justified the issuance of the Freeze Orders. This potential misconduct may also cause serious harm to investors and Yco if the status quo is not maintained . [Emphasis added.] [35] I am not persuaded that the Commission erred in law in misapprehending the evidentiary burdens required to issue investigative orders and freeze orders, or that the Commission erred in the application of the law to the facts (i.e., the evidence put before the Commission prior to the December hearing) before it. I would not accede to this ground of appeal. Applied Wrong Test? [36] At para. 11 of its factum, Pioneer asserts that: The Decision does not address the requirement that the Chair consider the seriousness of the allegations and the evidence supporting those allegations, and then weigh the threat to the public interest against the potential consequences of the Freeze Orders prior to granting the Freeze Orders. It is true that nowhere in its December decision did the Commission expressly ask itself whether the allegations being investigated against Pioneer were “serious”. However, it will be recalled that the information gathered during the course of the investigation included those items listed in para. 15 of the reasons, including a reference to “the Complainant’s serious allegations against [Mr. Z] and members of his family”. The Commission continued: The Commission investigators set forth their apprehensions that the information outlined in the Memoranda raised significant concerns that [Mr. Z] may have been acting as an unreported de facto director of Yco and, if so, Yco had failed to comply with section 85 of the Act and [Mr. Z] had failed to file insider trading reports for the trading in securities of Yco that the Applicant and Xco had made. Furthermore, if [Mr. Z] were a de facto director of Yco, given [Mr. Z]’s involvement with Yco summarized above, Yco’s public filings may have contained misrepresentations. [At para. 16.] [37] It may be that Pioneer or counsel do not regard these allegations as serious, but I cannot say that the Commission would be clearly and palpably wrong to so characterize them. Nor did the Commission consider a factor it should not have or fail to consider a relevant matter. It did, for example, consider the fact that an interim stay had been granted by an Alberta court in a defamation action against the alleged complainant in this case; but the Commission was apparently of the view that that evidence was not determinative at that point. [38] I would not accede to this ground of appeal. Breach of Procedural Fairness? [39] Finally, counsel for Pioneer asserted at the hearing of the appeal that it and the other subjects of the investigation were denied fundamental justice as a result of the “process” followed in this case. In particular, Pioneer asserts that in addressing the validity of a freeze order, procedural fairness requires that the Commission “produce the evidence relied upon by the Chair and the Commission in granting [the Freeze Order].” It also suggested that if the Chair had attempted to address the allegations made against Pioneer, it would have been apparent to her that the allegations were “unsubstantiated”. In summary, Pioneer says the Chair did not engage in the “evidentiary and weighing analyses” mandated by the governing authorities before issuing the freeze orders. [40] In my view, this argument must also fail. In its September reasons, the Commission acknowledged that “it would be procedurally unfair to the Applicant to require it ‘to tender evidence or provide a factual basis that revocation of the Freeze Orders would not be prejudicial to the public interest ’” while at the same time withholding the evidence that was before the chair when she granted the investigative orders and the freeze orders. The Commission explained that in most instances, applications for the variation or revocation of a previous order are heard by the original decision-maker after substantial proceedings have taken place, up to and including hearings on the merits. In the circumstances of this case, however, the panel had not granted the underlying orders and therefore did not have “the context and considerations from the original proceedings, as is often the case in a section 171 application” and no specific allegations had yet been made or notice of hearing issued. (At para. 42.) As seen above, the Commission found it would be “impossible” to proceed under s. 171 “in the absence of consideration of at least some of the underlying evidence.” [41] As we have seen, by the time of the December hearing, the affidavit and memoranda had been provided to the Commission. It found at the end of the day that that information “fully justified the issuance of the Freeze Orders” and that the public interest in maintaining those orders was “compelling”. [42] I agree with the Commission that it was simply not the case that there was “no evidence” before the Commission that could have justified the issuance of the freeze orders. The fact that this evidence may not have complied with the rules of evidence is not fatal: s. 173(c) of the Act provides that the Commission is generally not bound by the rules of evidence in conducting a hearing. This means that “information” provided by a complainant may be relied upon even though he or she has not been cross-examined on it. At this stage, the Commission is not called upon to assess the merits of the complaint or to assess the credibility of the complainant or anyone else. [43] In my view, no breach of the rules of procedural fairness has been shown. Disposition [44] For the foregoing reasons, I would dismiss the appeal. I emphasize that Pioneer expressly elected not to advance any constitutional argument in this case regarding s. 151. These reasons should not be read as commenting on that issue in any way. “The Honourable Madam Justice Newbury” I agree: “The Honourable Madam Justice Saunders” I agree: “The Honourable Mr. Justice Harris” Schedule of Legislation Appeal of commission decision 167 (1) A person directly affected by a decision of the commission, other than (a) a decision under section 48 or 76, (b) a decision under section 165 in connection with the review of a decision of the executive director under section 48 or 76, or (c) a decision by a person acting under authority delegated by the commission under section 7, may appeal to the Court of Appeal with leave of a justice of that court. (2) The commission or the Court of Appeal may grant a stay of the decision appealed from until the disposition of the appeal. (3) If an appeal is taken under this section, the Court of Appeal may direct the commission to make a decision or to perform an act that the commission is authorized and empowered to do. (4) Despite an order of the Court of Appeal in a particular matter, the commission may make a further decision on new material or if there is a significant change in the circumstances, and that decision is also subject to this section. (5) The commission is a respondent to an appeal under this section. Order to freeze property 151 (1) The commission may make a direction under subsection (2) if (a) it proposes to order an investigation in respect of a person under section 142 or during or after an investigation in respect of a person under section 142 or 147, (b) it or the executive director proposes to make or has made an order under section 161 in respect of a person, (c) criminal proceedings or proceedings in respect of a contravention of this Act or the regulations are about to be or have been instituted against a person and the commission considers the proceedings to be connected with or to arise out of a security or exchange contract or a matter relating to trading in securities or exchange contracts, or out of any business conducted by the person, (d) a person fails or neglects to comply with financial conditions applicable to the person under this Act, or (e) it proposes to apply or has applied to the Supreme Court for an order under section 157, or the Supreme Court has made an order under section 157. (2) In the circumstances described in subsection (1), the commission may direct, in writing, (a) a person having on deposit, under control or for safekeeping any funds, securities, exchange contracts or other property of the person referred to in subsection (1), to hold those funds, securities, exchange contracts or other property, and (b) a person referred to in subsection (1) (i) to refrain from withdrawing any funds, securities, exchange contracts or other property from any person having them on deposit, under control or for safekeeping, or (ii) to hold all funds, securities, exchange contracts or other property of clients or others in the person's possession or control in trust for an interim receiver, custodian, trustee, receiver manager, receiver or liquidator appointed under the Bankruptcy Act (Canada), the Company Act , the Business Corporations Act , the Law and Equity Act , the Personal Property Security Act , the Winding-up Act (Canada), the Supreme Court Act or this Act. (3) In the case of a savings institution, a direction of the commission under subsection (2) applies only to the offices, branches or agencies of the savings institution that are named in the direction. (4) A direction of the commission under subsection (2) does not apply to funds, securities, exchange contracts or other property in a clearing agency or to securities in process of transfer by a transfer agent unless the direction expressly so states. (5) In any of the circumstances referred to in subsection (1), the commission may, in writing, notify a land title office or gold commissioner that proceedings are being or are about to be taken that may affect land or mining claims belonging to the affected person. (6) The commission may, in writing, revoke or modify a notice given under subsection (5) and, if a notice is revoked or modified, the commission must send a copy of the written revocation or modification to the land title office or gold commissioner, as the case may be. (7) A notice sent under subsection (5) or a copy of a written revocation or modification under subsection (6) must be registered or recorded against the lands or claims mentioned in it and has the same effect as the registration or recording of a certificate of pending litigation or a caveat. Discretion to revoke or vary decision 171    If the commission, the executive director or a designated organization considers that to do so would not be prejudicial to the public interest, the commission, executive director or designated organization, as the case may be, may make an order revoking in whole or in part or varying a decision the commission, the executive director or the designated organization, as the case may be, has made under this Act, another enactment or a former enactment, whether or not the decision has been filed under section 163. Authority of persons presiding at hearings 173 The person presiding at a hearing required or permitted under this Act (c) is not bound by the rules of evidence.

OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 28 JANUARY 1981 ( ) Mr President, Members of the Court, The proceedings on which I now give my opinion concern the implementation of Council Directive 77/62/EEC coordinating procedures for the award of public supply contracts, issued on 21 December 1976 (Official Journal L 13 of 15 January 1977, p. 1). For the detailed content of that directive I refer to the Commission's application and to the Report for the Hearing. Article 30 of the directive provided that the Member States were to adopt the measures necessary to comply with it within 18 months of its notification; that period expired on 23 June 1978. The Italian Republic did not discharge that obligation and so in March 1979 the Commission brought proceedings under Article 169 of the EEC Treaty, in regard to which I again refer to the Report for the Hearing. During these proceedings it was disclosed that a draft Law to implement the directive was actually in the process of going through Parliament at the end of 1978; however, after amendments required by the Senate had necessitated further scrutiny by the Chamber of Deputies, it could not be passed owing to the premature dissolution of Parliament early in 1979. A new draft was submitted to the Senate in December 1979. As we were told at the hearing, that draft was passed by the Senate on 4 December 1980 and remitted to the Chamber of Deputies for final enactment. This has been delayed, apparently on account of the fact that on 1 January 1981 a new directive on the same subject (Directive 80/767/EEC) entered into force. As Counsel for the Italian Government explained, the bill will have to be amended accordingly; it must then be remitted once again to the Senate before it can finally be enacted, for which it is not possible to indicate a date. An assessment of those defence arguments is to be found in the extensive case-law of the Court of Justice cited by the Commission in its application. In particular it is clear that the issue of a new directive and the. necessity of implementing it cannot afford any justification for the failure to implement the directive concerned in these proceedings within the prescribed period. In view of those facts we therefore have no choice but to grant the application lodged by the Commission. It must accordingly be declared that the Italian Republic has failed to fulfil its obligations under the Treaty by not adopting within the prescribed period provisions to implement Directive 77/62/EEC. Furthermore, the costs of the proceedings should be borne by the defendant as claimed in the application. ( ) Translated from the German.

KURIAN, J. Leave granted. The appellant is aggrieved by the impugned order dated 05.10.2015 passed by the High Court of Delhi in LPA No. 739 of 2008, by which the respondent has been directed to be reinstated with 60 back wages. Having heard the learned companynsel appearing on both sides, we are of the view that there is numberjustification in awarding back wages in the facts of the present case.

Case C-227/08 Eva Martín Martín v EDP Editores SL (Reference for a preliminary ruling from the Audiencia Provincial de Salamanca) (Directive 85/577/EEC – Article 4 – Consumer protection – Contracts negotiated away from business premises – Right of cancellation – Obligation on the trader to give notice of that right – Contract void – Appropriate measures) Summary of the Judgment Approximation of laws – Consumer protection in respect of contracts negotiated away from business premises – Directive 85/577 – Consumer’s right to cancel (Council Directive 85/577, Arts 4 and 5(1)) Article 4 of Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises does not preclude a national court from declaring, of its own motion, that a contract falling within the scope of that directive is void on the ground that the consumer was not informed of his right to cancel, even though the consumer at no stage pleaded that the contract was void before the competent national courts. On the one hand, that provision comes under the public interest in justifying a positive intervention by the national court in order to compensate for the imbalance between the consumer and the trader in the context of contracts concluded away from business premises. On the other hand, a measure which consists in declaring the contract in dispute void can be categorised as ‘appropriate’ within the meaning of the third paragraph of Article 4 of Directive 85/577, in that it penalises the failure to comply with an obligation which is essential to create binding intent on the part of the consumer and to attain the level of protection sought by the Community legislature. However, that finding does not rule out the possibility that other measures might also ensure that level of protection, such as, for example, the resetting of the relevant time‑limits relating to the cancellation of the contract, thus placing the consumer in a position to exercise the right which is granted to him by Article 5(1) of the directive. In addition, the national court seised may also have to take account, in certain circumstances, of the consumer’s wish not to have the contract at issue cancelled. (see paras 28, 34-36, operative part) JUDGMENT OF THE COURT (First Chamber) 17 December 2009 (*) (Directive 85/577/EEC – Article 4 – Consumer protection – Contracts negotiated away from business premises – Right of cancellation – Obligation on the trader to give notice of that right – Contract void – Appropriate measures) In Case C‑227/08, REFERENCE for a preliminary ruling under Article 234 EC from the Audiencia Provincial de Salamanca (Spain), made by decision of 20 May 2008, received at the Court on 26 May 2008, in the proceedings Eva Martín Martín v EDP Editores, SL, THE COURT (First Chamber), composed of A. Tizzano (Rapporteur), President of the Chamber, A. Borg Barthet and M. Ilešič, Judges, Advocate General: V. Trstenjak, Registrar: M. Ferreira, Principal Administrator, having regard to the written procedure and further to the hearing on 12 March 2009, after considering the observations submitted on behalf of: – EDP Editores SL, by J.M. Sanchez Garcia, abogado, – the Spanish Government, by B. Plaza Cruz and J. López-Medel Bascones, acting as Agents, – the Austrian Government, by C. Pesendorfer, acting as Agent, – the European Commission, by R. Vidal Puig and W. Wils, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 7 May 2009, gives the following Judgment 1 This reference for a preliminary ruling concerns the interpretation of Article 4 of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises (OJ 1985 L 372, p. 31; ‘the Directive’). 2 The reference has been made in the course of proceedings between EDP Editores SL (‘EDP’) and Ms Martín Martín following the refusal of Ms Martín Martín to respect the commitments undertaken at the signing of a contract agreed, at her home, with an EDP representative. Legal context Community legislation 3 Recitals 4 to 6 of the preamble to the Directive state: ‘… the special feature of contracts concluded away from the business premises of the trader is that as a rule it is the trader who initiates the contract negotiations, for which the consumer is unprepared or which he does not [expect]; … the consumer is often unable to compare the quality and price of the offer with other offers; … ... the consumer should be given a right of cancellation over a period of at least seven days in order to enable him to assess the obligations arising under the contract; ... appropriate measures should be taken to ensure that the consumer is informed in writing of this period for reflection’. 4 Article 1(1) of the Directive provides: ‘This Directive shall apply to contracts under which a trader supplies goods or services to a consumer: … – during a visit by a trader: (i) to the consumer’s home or to that of another consumer; … where the visit does not take place at the express request of the consumer.’ 5 Under Article 4 of the Directive: ‘In the case of transactions within the scope of Article 1, traders shall be required to give consumers written notice of their right of cancellation within the period laid down in Article 5, together with the name and address of a person against whom that right may be exercised. Such notice shall be dated and shall state particulars enabling the contract to be identified. It shall be given to the consumer: (a) in the case of Article 1(1), at the time of conclusion of the contract; … Member States shall ensure that their national legislation lays down appropriate consumer protection measures in cases where the information referred to in this Article is not supplied.’ 6 Article 5 of the Directive states: ‘1. The consumer shall have the right to renounce the effects of his undertaking by sending notice within a period of not less than seven days from receipt by the consumer of the notice referred to in Article 4, in accordance with the procedure laid down by national law. … 2. The giving of the notice shall have the effect of releasing the consumer from any obligations under the cancelled contract.’ 7 Article 8 of the Directive provides: ‘This Directive shall not prevent Member States from adopting or maintaining more favourable provisions to protect consumers in the field which it covers.’ National legislation 8 Law 26/1991 of 21 November 1991 concerning contracts concluded away from business premises (BOE No 283 of 26 November 1991) transposes the Directive into Spanish law. 9 Article 3 of that law provides: ‘1. The contract or contractual offer referred to in Article 1 shall be set down in writing, in duplicate, with a cancellation notice, and shall be dated and signed by the consumer in his own hand. 2. The contract document shall include, in prominent letters immediately above the space for the consumer’s signature, a clear and precise reference to the right of the consumer to withdraw the consent given and to the conditions for and consequences of the exercise of that right. 3. The cancellation notice shall include in a clearly visible form the words ‘cancellation notice’ and shall state the name and address of the individual to whom it is to be sent and the particulars of the contract and the contracting parties. 4. Once the contract has been signed, the trader or the person acting on his behalf shall give to the consumer one copy of the contract and the cancellation notice. 5. The trader is responsible for proving that the obligations laid down in this article have been complied with.’ 10 Article 4 of Law 26/1991 sets out the effects of non-compliance with the conditions listed in Article 3 of that law, and provides: ‘A contract concluded or an offer made in breach of the conditions laid down in Article 3 may be cancelled at the request of the consumer. Under no circumstances may the trader invoke the ground of cancellation unless non‑compliance is exclusively on the part of the consumer.’ 11 Article 9 of that law states: ‘The rights conferred on the consumer by this Law may not be waived. Nevertheless, the contractual terms which are most favourable to the consumer shall be deemed to be valid.’ The dispute in the main proceedings and the question referred for a preliminary ruling 12 On 20 May 2003, Ms Martín Martín signed, at her home, a contract with a representative of EDP for the purchase of 15 books, 5 DVDs and a DVD player. Those goods were delivered to her on 2 June 2003. 13 As it did not receive payment for the goods, EDP applied to the Juzgado de Primera Instancia No 1 de Salamanca (First Chamber of the Salamanca Court of First Instance) to commence an order for payment procedure against Ms Martín Martín claiming the amount of EUR 1 861.52 plus default interest and costs. 14 Since the defendant was ordered, by decision of 14 June 2007, to pay the amount claimed, she brought an appeal before the Audencia Provincial de Salamanca (Salamanca Regional High Court). 15 In its order for reference, the Audiencia Provincial de Salamanca considers, first, that the contract in question may be declared void inasmuch as the defendant was not duly informed of her right to withdraw her consent within a period of seven days from delivery of the goods, nor of the conditions for and consequences of the exercise of that right. That court points out, however, that no plea of nullity was submitted by Ms Martín Martín before the court at first instance or during the appeal proceedings. 16 Taking account of the fact that under Article 4 of Law 26/1991 it is for the consumer to request cancellation of a contract concluded in breach of the conditions laid down in Article 3 of that law, and that, under Spanish law, civil actions are generally governed by the ‘principio de justicia rogada’, a principle on the basis of which the court cannot assess, of its own motion, facts, evidence and claims which the parties have not raised, the Audiencia Provincial de Salamanca is uncertain whether, in order to give judgment on the appeal brought against the decision at first instance, it must take into account solely the pleas submitted in the course of the action at first instance and the appeal, or whether, on the contrary, the provisions of the Directive allow it to rule, of its own motion, on the possibility that the contract is void. 17 In those circumstances, the Audiencia Provincial de Salamanca decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling: ‘Must Article 153 EC, in conjunction with Articles 3 EC and 95 EC, Article 38 of the Charter of Fundamental Rights of the European Union [proclaimed at Nice on 7 December 2000 (OJ 2000 C 364, p. 1), and the [Directive], specifically [with] Article 4 thereof, be interpreted as meaning that a court seised of an appeal against a judgment given at first instance may, of its own motion, declare a contract which falls within the scope of that directive void, where no plea of nullity was raised at any point by the defendant consumer when submitting a defence to the order for payment procedure, at the hearing, or during the appeal?’ The question referred for a preliminary ruling 18 By its question, the Audiencia Provincial de Salamanca asks, in essence, whether Article 4 of the Directive must be interpreted as meaning that it allows a national court to raise, of its own motion, an infringement of that provision and to declare a contract falling within the scope of that directive void on the ground that the consumer was not informed of his right of cancellation, even though the consumer, at no stage, pleaded that the contract was void before the competent national courts. 19 In order to reply to that question, it should at the outset be recalled that Community law does not, in principle, require national courts to raise of their own motion an issue concerning the breach of provisions of Community law, where examination of that issue would oblige them to go beyond the ambit of the dispute defined by the parties themselves and rely on facts and circumstances other than those on which the party with an interest in application of those provisions has based his claim (see, to that effect, inter alia, Case C‑430/93 van Schijndel and van Veen [1995] ECR I‑4705, paragraph 22 and Joined Cases C‑222/05 to C‑225/05 van der Weerd and Others [2007] ECR I‑4233, paragraph 36). 20 That limitation on the power of the national court is justified by the principle that, in a civil suit, it is for the parties to take the initiative, and that, as a result, the court is able to act of its own motion only in exceptional cases where the public interest requires its intervention (see van Schijndel and van Veen, paragraph 21 and van der Weerd and Others, paragraph 35). 21 It must, therefore, be ascertained, in the first place, whether the Community law provision at issue in the main proceedings, namely Article 4 of the Directive, can be considered to be founded on such a public interest. 22 In that regard, it should be noted that the Directive, as is apparent from recitals 4 and 5, is designed to protect consumers against the risks inherent in the conclusion of contracts away from business premises (Case C‑412/06 Hamilton [2008] ECR I‑2383, paragraph 32), as the special feature of those contracts is that as a rule it is the trader who initiates the contract negotiations, and the consumer has not prepared for such door-to-door selling by, inter alia, comparing the price and quality of the different offers available. 23 It is on account of that imbalance that the directive ensures consumer protection by granting, first of all, a right of cancellation to the consumer. Such a right seeks specifically to offset the disadvantage, for the consumer, of sales which take place away from business premises, to enable him over a period of at least seven days to assess the obligations arising under the contract (see, to that effect, Hamilton, paragraph 33). 24 In order to strengthen consumer protection in situations where consumers finds themselves caught unawares, Article 4 of the Directive also requires traders to give consumers written notice of their right to cancel the contract and the conditions for and means of exercising such a right. 25 Lastly, it is apparent from Article 5(1) of the Directive that the minimum period of seven days must be calculated from the date of receipt of that notice from the trader. That provision is explained, as the Court has previously indicated, by the fact that if the consumer is not aware of the existence of the right of cancellation, he will not be able to exercise that right (Case C‑481/99 Heininger [2001] ECR I‑9945, paragraph 45). 26 In other words, the system of protection established by the Directive assumes not only that the consumer, as the weaker party, has the right to cancel the contract, but also that he is made aware of his rights by being specifically informed of them in writing. 27 It must therefore be held that the obligation to give notice of the right of cancellation laid down in Article 4 of the Directive plays a central role in the overall scheme of that directive, as an essential guarantee, as the Advocate General stated in points 55 and 56 of her Opinion, for the effective exercise of that right and, therefore, for the effectiveness of consumer protection sought by the Community legislature. 28 Such a provision, therefore, comes under the public interest justifying – within the meaning of the case‑law cited in paragraph 20 of this judgment – a positive intervention by the national court in order to compensate for the imbalance between the consumer and the trader in the context of contracts concluded away from business premises. 29 In those circumstances, it must be held that, in the event that the consumer has not been duly informed of her right of cancellation, the national court seised may raise, of its own motion, an infringement of the requirements laid down in Article 4 of the Directive. 30 That being the case, in order to reply to the question referred by the Audiencia Provincial de Salamanca, it is necessary, in the second place, to clarify the consequences which may follow such an infringement and, more specifically, whether the national court seised can declare the contract void for the failure to comply with the obligation to give notice which is at issue. 31 In that regard, the Court has previously stated that, while the third paragraph of Article 4 leaves it to the Member States to legislate as regards the legal effects of a failure to comply with the obligation to give notice, the national courts, when hearing a case between individuals, must, for their part, interpret the whole body of rules of national law so far as possible in the light of the wording and purpose of the Directive in order to achieve an outcome consistent with the objective pursued by that directive (see, inter alia, to that effect, Case C‑350/03 Schulte [2005] ECR I‑9215, paragraphs 69, 71 and 102). 32 In that context, it must be pointed out, first, that the concept of ‘appropriate consumer protection measures’ in the third paragraph of Article 4 of the Directive, affords to the national authorities a discretion in determining the consequences which should follow a failure to give notice, provided that that discretion is exercised in conformity with the Directive’s aim of safeguarding the protection granted to consumers under appropriate conditions with regard to the particular circumstances of the case. 33 Second, it must also be borne in mind that the Directive provides for a minimum level of harmonisation inasmuch as, under Article 8, the Directive does not prevent Member States from adopting or maintaining more favourable provisions to protect consumers in the field which it covers (see, to that effect, Hamilton, paragraph 48). 34 In those circumstances, a measure, such as that envisaged by the referring court, which consists in declaring the contract in dispute void can be categorised as ‘appropriate’ within the meaning of the third paragraph of Article 4 of the Directive, in that it penalises the failure to comply with an obligation which is essential, as stated in paragraphs 26 and 27 of the present judgment, to create binding intent on the part of the consumer and to attain the level of protection sought by the Community legislature. 35 It should lastly be pointed out that, first, that finding does not rule out the possibility that other measures might also ensure that level of protection, such as, for example, the resetting of the relevant time‑limits relating to the cancellation of the contract, thus placing the consumer in a position to exercise the right which is granted to him by Article 5(1) of the Directive. Second, the national court seised may also have to take account, in certain circumstances, of the consumer’s wish not to have the contract at issue cancelled (see, by analogy, Case C‑243/08 Pannon GSM [2009] ECR I‑0000, paragraph 33). 36 In the light of all of the foregoing considerations, the reply to the question referred is that Article 4 of the Directive does not preclude a national court from declaring, of its own motion, that a contract falling within the scope of that directive is void on the ground that the consumer was not informed of his right of cancellation, even though the consumer at no stage pleaded that the contract was void before the competent national courts. Costs 37 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: Article 4 of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises does not preclude a national court from declaring, of its own motion, that a contract falling within the scope of that directive is void on the ground that the consumer was not informed of his right of cancellation, even though the consumer at no stage pleaded that the contract was void before the competent national courts. [Signatures] * Language of the case: Spanish.

MRS JUSTICE DOBBS: The appellant, who is a litigant in person, seeks to appeal the decision of the respondent dated 25th October 2006 that he is not fit to be on the register of pharmaceutical chemists and that he be removed therefrom. The background The appellant was first registered as a pharmacist in Australia in 1966. He came to the United Kingdom in 1998 and registered with the respondent's society. He came to the notice of the society as a result of a number of complaints. An inquiry took place which looked at allegations of misconduct in four separate employments. The history of the proceedings The Notice of Inquiry is dated 16th August 2006 and gave notice of the hearing to be held in the week of 25th September. Thus a period of some 38 days notice was given. Any applications, the Notice indicated, were to be made no less than ten days before the date of the hearing. On 13th September, Mr Southall-Edwards, then representing the appellant, indicated to the respondent's solicitors that the appellant was contending that the allegations in the Notice of Inquiry which related to allegations which were referred after 2006 (the others going back some time earlier), should not be heard by the committee. This was opposed by the respondent, particularly because it had not been raised under regulation 15 of the Pharmaceutical (Statutory Committee) Regulations with the Chairman of the Statutory Committee for a ruling. In an email dated 15th September 2006 the solicitor made the society's objections clear, setting out the history of the case and the reasons why they objected. In essence one can summarise the reasons contained in that long document as follows: (a) the appellant had been aware of the allegations for a long time; (b) it was the appellant who was pressing for matters to be heard together all along; (c) by February 2006 it was clear that consideration had been given by the appellant to the case in respect of three of the allegations as a provisional time estimate had been given for the defence case, with reference being made to the protocol then in existence; (d) on 13th June the appellant's legal representative had agreed the date of the hearing to be the week of 24th September onwards; (e) on 25th July the society served its case, draft charges and the proposed bundle on the legal representative as requested. It is to be noted that they had been prepared to serve the papers on Mr Ashby but the legal representative said he would accept service for the appellant. Following receipt of the Notice of Inquiry, Mr Ashby then asked for a copy of the bundle himself on 22nd August and then stated that he did not have sufficient time to prepare, alluding to the protocol. The society indicated that the appellant should make application to the Chairman. The application for adjournment of the 2006 matter was made and by a decision dated 20th September the Chairman to the Committee refused it, making the following comments: "This application comes perilously close to an abuse of process. The protocol was designed to be as fair as possible to the pharmacist under inquiry and to ensure he or she was fully aware of the case. The only statutory requirement is the service of the Notice of Inquiry in accordance with the timetable in the SI. The protocol was intended to give details of the evidence so that if possible evidence could be agreed and fewer members of the public thereby inconvenienced. Regrettably, as I understand it, Mr Ashby is not prepared to offer any agreement. It cannot be in the public interest to postpone any part of this case until 2007. Proceedings were first instituted in 2003 and hitherto it appears that Mr Ashby was enjoying the RPSGB as soon as possible notwithstanding the present request. The application is refused, although we will of course hear any submissions on the matter on Monday morning." The hearing The Notice of Charge set out a number of allegations but they can be summarised as follows. As indicated it concerned four separate employments: A. At St. John's Pharmacy in Weymouth between August 2002 and 21st March 2003 an inquiry was ordered in relation to that on 10th December 2003. These allegations concerned the appellant's personal behaviour, namely verbal abuse of other members of staff and offensive language about customers within the hearing of other customers, removal of patients returns from the part pharmacy for his own use, use of prescription only medicines which had not been prescribed for him, six dispensing errors including the supply of twice the number of Temazepam tablets ordered by the prescriber and false statements to the practice manager of a doctor's surgery in respect of one of the dispensing errors. B. At Moss Pharmacy in Hall Road, Norwich between 28th July 2003 and 31st July 2003 the inquiry was ordered on 14th November 2005 to be heard with the previous one. The allegations concerned this appellant's personal conduct in the verbal abuse of members of staff by way of offensive language, including in the presence of members of the public and a refusal to assist a diabetic patient with an urgent need for a particular medication brought about by an earlier dispensing error (to be pointed out that it was not the responsibility of the appellant) from the pharmacy. C. At Moss Pharmacy in Dereham Road, Norwich in October 2003 an inquiry was ordered also on 14th November 2005 to be heard with the previous two. The allegations concerned verbal abuse of the manager, verbal abuse of one senior manager and of a female member of staff to another senior manager, aggression and offensive language in a voicemail message left for the Society's Inspector, aggression and offensive language over the telephone to a Pharmacist Advisor to the respondent's society, wasting the time of the society's inspector by making false claims in respect of another pharmacy, and acting as described despite the inspector's earlier warning as to the professional need for courtesy. At Moss Pharmacy, Llandidrod, North Wales the inquiry was ordered on 2nd February 2006. These allegations concerned supplies of Methadone and Pethidine on four occasions otherwise than in accordance with the requirements of the prescriber and failing to read the Code of Ethics. At the Alliance Pharmacy in Bridlington, Yorkshire an inquiry was ordered on 18th March 2006. These allegations concerned an assault on a female member of staff and a failure to cooperate with the respondent's investigation into that assault. It has been noted that the allegations in relation to all the matters that have been set out were not at the end of the day challenged by the appellant, save for the allegation of assault which was the last inquiry to be ordered. The hearing took place over the course of four days. There were no further applications made at the beginning of the hearing. As indicated, most of the allegations had been admitted both before and during the proceedings, Mr Southall-Edwards representing the appellant at the hearing summarising what was accepted at the beginning of his closing submissions. Having deliberated, the decision of the Committee was as follows: "THE CHAIRMAN: This is a complaint by the Royal Pharmaceutical Society of Great Britain against Mr Samuel Edwin Ashby. He first registered with the Society in July 1998. He comes from farming stock in Australia, fine people generally imbued with a robust good sense. Mr Ashby was acting in various capacities when his conduct as a pharmacist was called into question. In the St John's Pharmacy at Weymouth, he was employed as a pharmacist manager; in the two Moss pharmacies in Norwich he was employed in a locum capacity; at Llandrindrod Wells, in the pharmacy owned by Moss Pharmacy, he was employed as the pharmacist in charge. In November 2003 he was employed by the Alliance Pharmacy in Bridlington, Yorkshire on a locum basis. The case was heard before us over four days - which we regard as verging on the excessive, although there were problems about getting all the witnesses in front of us - when in fact only one matter of fact, to which I shall turn, was disputed, namely the allegation of assault. The complaints about his acting in Weymouth are set out in paragraphs 2 to 16 of the Notice of Inquiry. They cover his rudeness to other members of staff and about a customer, his removal of patient returns for his own use, his consumption of medicines which had not been prescribed for him, a number of dispensing errors detailed in paragraphs 10 to 15 and a false representation to the practice manager of the GP's surgery. Although they have been described and remain described as dispensing errors, in fact one of the errors that is mentioned was picked up before prescription left the premises. In such circumstances that might be regarded as open to question whether in fact there had been a dispensing error or not. However, as Mr Ashby had completed all he had to do we have treated it as a dispensing error. As Mr Southall Edwards indicated on his behalf (D4/64 of the transcript), Mr Ashby admits all the dispensing errors and only sought to excuse them on the basis that they would have not been that bad, "If I had not had to suffer the abuse and disrespect for weeks and weeks and weeks of trying to implement good standards". That is a direct quote from him on D4/10 of the transcript. It is less clear what he is saying about the false representation to the practice manager, Miss Tina Carter, about dispensing and checking. Miss Carter gave her evidence briefly in an uncomplicated way. Mr Ashby seemed to be saying in this answer to Mr Bradly at D4/10, 'At that stage I did not believe it was a lie.' This less than satisfactory version does not square with the challenge made by Mrs Manders on D1/26 of the transcript. We prefer the accounts of Miss Turner, Miss Carter and Mrs Manders. We concluded that Mr Ashby had deliberately lied and was indifferent to the truth in making his statement to Miss Carter. Mr Ashby knew perfectly well that patient returns were not to be removed but, nevertheless, this is precisely what he did. The paragraph sets out the abusive language Mr Ashby used about a customer who had just left the premises. As we understand the situation, he claimed he would have said no such thing. However there is a compelling piece of evidence from Mrs Lambert (D1/35) to the effect that one of the members of the public who had overheard this abuse had promised he would not cause any trouble. In our view, Mr Ashby's conduct in this pharmacy in Weymouth was wholly unacceptable. He had neither the right nor good reason to be abusive to the manager or the staff or about customers, but - and I shall go on to narrate - he not only ignored the good advice about being courteous as part of his professional responsibility, received from the Royal Pharmaceutical Society Inspector, arguably, subsequent to that advice, his conduct deteriorated further. The next part of the complaint against him relates to the pharmacy at Hall Road Norwich. Paragraph 19 narrates that an error had been made by someone else about a patient who was a diabetic. Mr Ashby declined to help even though a simple phone call to his Area Development Manager, Mr Davies, could have resolved matters. Mr Ashby appeared indifferent to this patient's plight. We heard evidence subsequently, not only from Mr Davies but also from Patient BA. The Notice of Inquiry describes this, in summary, as a failure to assist. It certainly was that but, as Patient BA told us, he was so taken aback by Mr Ashby's response, that he would not use the pharmacy again. So, Mr Ashby not only failed to act in the interest of a patient as his Key Responsibilities require, and a diabetic one at that, but in terms of those Key Responsibilities he behaved in such a way that it brought the profession into disrepute and undermined public confidence in the profession. Although only weeks before he had been told to be courteous while at this pharmacy, he reduced the staff to tears with his language. I refer to page 74 of the transcript of interview to be found at D1/14 15 of the transcript. We find both heads established. His conduct did not much improve at another Moss Pharmacy in Norwich. We are not over vexed that he left a message with Mr Davies telling him not to interfere and later told him he did not know how to run to run a pharmacy. We have little doubt that that is commonly the practice between people working in similar organisations, where one is answerable to the other, but it is unacceptable for a professional to be rude about Mr Davies and to call a member of his staff 'a bitch' twice in the course of a conversation with the Regional General Manager, Mr Standerwick. Mr Ashby then came to the attention of the Royal Pharmaceutical Society when he was in Wales acting briefly as a pharmacist in charge. On three occasions he supplied methadone without the authority of a valid prescription and on another occasion he supplied another patient with Pethidine, similarly, without a valid prescription. The only explanation given for this was that there appears to have been something of an undignified spat on a single occasion about a microwave with another member of staff whose conduct Mr Ashby described to us as being that of 'severe intimidation'. The medicines to which I have referred are not only prescription only medicines but are controlled drugs with their own far tighter regime. We cannot wholly decide whether Mr Ashby was being just cavalier with Inspectors who interviewed him later when he said he had not read the Code of Ethics or whether that was exactly the case. Our view is that the latter is more likely, as in evidence before us on D4/1 Mr Ashby repeated that he had not read the Code of Ethics, but followed only his own ethics. Finally I turn to the incident at the Bridlington Pharmacy. There it is alleged that he physically assaulted a member of staff. It is hotly disputed by Mr Ashby that it did not amount to an assault, although there was no doubt that there was some physical contact between him and a member of staff over the use of a peg. We are more inclined to favour Lyn Price's version but, in any event, we agree that his behaviour towards her was unacceptable. It was a petty dispute and, far from seeking to defuse the situation, he exacerbated it. At paragraph 39 when a Royal Pharmaceutical Society Inspector had to investigate this alleged assault, he showed absolutely no cooperation with the Society and, as paragraph 39 spells out in some detail, he did not respond to what had been requested of him by the Society and by the Inspector. The Statutory Committee finds the Royal Pharmaceutical Society's allegations, as summarised, established with the exception of the wasting of the time of an Inspector (I refer to paragraph 29). That is simply because we are not satisfied that we know enough of that matter to come to a conclusion one way or the other, although it is certainly clear that the Inspector's investigation failed to reveal any problem at Bridlington. Our conclusion is that Mr Ashby's behaviour amounts to such misconduct as to render him unfit do be on the register. Subsequent to arriving at that decision, we have seen the note of mitigation put forward on his behalf by Mr Southall Edwards and have considered it very carefully. However we find nothing in it which would amount to mitigation to cause us not to direct the removal of his name from the register. The note which has been put before us by Mr Southall Edwards talks about a 'possible disorder of the mind'. We had no evidence to that effect, although we did hear of him give evidence for a day and half. In our view, Mr Ashby was high on self importance and self pity but low on inter personal skills. At times his evidence was muddled, contradictory and self seeking. It is difficult to resist the conclusion that he had no interest but to make life as difficult as possible for the Royal Pharmaceutical Society. Accordingly, our direction is that his name should be removed from the register of pharmaceutical chemists." The law Sections 8 to 10 of the Pharmacy Act deal with control of and registration and removal by the Statutory Committee including the right of appeal. The Pharmaceutical Society (Statutory Committee) Order of Council 1978 governs the disciplinary procedures applicable when the case of misconduct is alleged or where a registered chemist is convicted of a criminal offence. Part 2 sets out the timetable of procedure in relation to the holding of inquiries. By paragraph 11 no less than 28 days' notice is to be given to the person affected of the date appointed for the holding of inquiry. Paragraph 25 sets out the sanctions available to the Committee. In order to succeed in this appeal the appellant must show that an error has occurred in the proceedings before the Committee or in its decision -- see Ghosh v G.M.C. [2001] UKPC 29 and Threlfall v General Optical Council [2004] EWHC 2683 (Admin). The court will accord due respect to the judgment of the Committee on these issues -- see paragraph 34 of Ghosh which cites the case of Evans v G.M.C, an unreported appeal of 1994. Also relevant is the case of Moody v General Osteopathic Council [2004] EWHC 967 (Admin). With regard to sanction the court will have regard to the fact that the Committee of the Society, which is made up of both professional and lay members, have a special expertise when it comes to making the necessary judgments as to the measures required to protect the public and to maintain standards and the reputation of and public confidence in the profession. A number of cases set out the approach of the courts to this issue and they need not be rehearsed. They can be found in paragraph 15 of the respondent's skeleton argument. Grounds of appeal The grounds are that the Committee did not afford this appellant sufficient time to prepare and serve his case in accordance with the Committee's protocol for service of evidence and the bundles of evidence. The argument simply put is that because two inquiries had already been ordered before the Protocol for the Service of Evidence and the bundles of evidence came into force, in other words 1st January 2006, they should have conducted two inquiries. The Committee allowed all enquiries to be heard together but did not require the society to follow the protocol. The protocol provided six months from the date of service of the society's case for the appellant to disclose and serve his case in normal cases and four months in fast track cases, which this was not. The society served its case on 25th July for an inquiry to commence on 25th September. Representations were made that this appellant was entitled to the time provided for serving his defence regardless of whether he needed that time. As explained in court today, Mr Ashby says he was prejudiced because he could not instruct an investigator to collect evidence to prove what he had been told about the victim of the alleged assault by other girls. This leads to the second ground which is that the Committee was wrong to hear the inquiry ordered in 2006. Mr Ashby submits that the findings in respect of that inquiry be set aside and re-heard. As the finding of the determination was a global one, the order of removal from the register must also be set aside. It follows that this decision depends on the finding on the previous ground. Thirdly, Mr Ashby complains in the grounds that the Committee should not have tried the earlier matters due to the lapse of time. This is not pursued in the skeleton argument, but Mr Ashby in court today says that he was trying to trace staff from one of the shops but was only able to find one girl. Fourthly, that the Committee was biased against the appellant. In writing, but perhaps not in court today, the appellant accepts that he displayed an attitude to the Committee during the course of the proceedings, but submits that the Committee wrongly allowed itself to be influenced by the appellant's attitude, an attitude that he would describe as "brash Australian". Remarks made by the Chairman showed that the Chairman's mind was made up against this appellant and this led to prejudice. The appellant quotes an incident at day 4, page 27E, where it is said that the Chairman angrily, although this does not come over in the transcript, asked the appellant: "Why do you remain in this country then? You do not have a good word to say about the nursing in this country, you do not have a good word to say about the practice of pharmacy." It is further said that Mr Ashby's attitude and complaints that he made about the staff when giving evidence resulted in the Committee taking a generally more serious view of the matters than they would otherwise have done had he not mentioned them. In court today, Mr Ashby adds another example where he tried to explain to the Chairman that there were large problems with errors when trying to check scripts. The Chairman did not understand and the professional member of the committee said that there was not a problem. No part of the transcript was identified to this court, but Mr Ashby concluded by saying that the committee did not want to accept anything he said. Fifthly, the Committee took too serious a view of technical errors for infringements. Mr Ashby did not pursue this with great vigour in court, although he pointed to one or two examples where he felt they had been blown out of proportion, but put forward the mitigation that the errors had been committed when he was under great stress and frustration. Sixthly, that the Committee failed to accord sufficient weight to the appellant's health both at the time of the conduct complained of and during the course of the hearing and ought to have acceded to a proposal to adjourn for a medical or psychiatric report to be prepared before sanction was imposed, as is the usual practice of the Committee to do so when representations are made that a pharmacist is or was physically mentally unwell. The appellant had given evidence about the serious effect that workplace stress workloads and personal difficulties, including the death of his fiancée, had on him. This evidence was not challenged by the society but the Committee rejected it, finding that the appellant was high on self-importance and self-pity and low on interpersonal skills. It is submitted that they clearly ignored his evidence, including the fact that there was a serious underlying illness demonstrated, due to his attitude. Seventhly, as to sanction it was wrong to remove the appellant's name from the register without having considered evidence as to his physical and mental health. The appellant had clearly shown he was ill at the time of the misconduct, most of which he admitted, and the Committee could only but come to the conclusion that he was still ill, thus they should have received evidence as to his health. However, they went ahead in the absence of such evidence. It is contended therefore, that the decision to remove the appellant's name from the register was unreasonable and unfair. The respondent makes the following submissions. The committee was right to strike the appellant's name off the register because the conduct found proved was wholly contrary to the fundamental character of the profession in that it involved (a) widespread breaches of the profession's ethical guidance; (b) a large number of dispensing errors which indicate that the appellant showed no insight and did not learn from his errors but went on to commit more; (c) unprofessional and unacceptable personal conduct whilst working as a member of the profession, including offensive language towards and about the staff and in the presence of customers; (d) an assault on a member of staff; (e) dishonesty, in particular with his dealings with the practice manager of a local doctor's surgery; (f) removing a patient's return medicines from the pharmacy for his own use; (g) consuming prescription only medicines which had been prescribed for another person; (h) disregarding the advice of the inspector as to his personal conduct; (i) refusal to help a diabetic patient in urgent need of medication characterised by rudeness; (j) contempt at the profession's Code of Ethics; (k) failure to cooperate with the respondent's investigation into this inquiry. Dealing with the separate identified grounds, the respondent makes reply as follows. The protocol point Under the regulations the period of service of the Notice of Inquiry is no less than 28 days prior to the date of the hearing. More than 28 days was given in this case. The protocol was put in place as a practical attempt to help pharmacists be in as best a position as they could be. It is noted that the allegations were listed together at the behest of the appellant's legal representative with the agreement of the appellant and it was only at the last moment that objection was taken. Reference is made to the emails from the appellant's legal representatives dated 21st December 2005 and 27th January 2006 where it was made clear that the appellant wanted all matters listed together as soon as possible because the outstanding matters were continuing to prevent his registration in Ireland. Further correspondence is relied on dated 8th February 2006 and 13th June 2006, the latter agreed to a hearing commencing on 24th September 2006. The society had agreed to the course proposed in order to assist the appellant. Moreover, there was no unfairness to the appellant as he had been fully aware of all the allegations against him for a sufficient time prior to the inquiry and in the case of the majority of the allegations a considerable period of time. The information available to him at the early stage included the allegations, statements from relevant persons and the report before the Infringements Committee which would decide whether to take the case any further. There was plenty of time therefore for the appellant to instruct an inquiry agent which he had only done since the hearing in 2006, although no results of that inquiry have been put before the court. There is provision in the protocol to make application in writing for a variation of the time limits and for the Chairman to hold a directions hearing. An application was made and refused. The Chairman indicated he would consider further submissions at the outset of the hearing but none was made. The delay point The respondent notes that this matter was not developed in the skeleton argument, although raised in the grounds of appeal. It is submitted that the appellant made no representations to the Committee on this matter and thus it cannot be a ground of appeal. However, the respondent submits that the mere fact that time has elapsed since the events in question does not mean that proceedings cannot and should not take place. The appellant has not sought in the grounds to argue what prejudice has been suffered due to the lapse of time, in the sense of showing that a fair trial was not possible. More importantly, he admitted the factual allegations made against him, save for the allegation of assault, both before and during the hearing. No prejudice has been made out. It is pointed out that if delay there has been, it arose out of the desire of Mr Ashby to have all the matters heard together, thus the earlier matters lay in abeyance while the more recent matters were investigated. It is pointed out, importantly, that these were disciplinary proceedings involving a healthcare professional, involving the public interest, the protection of patients and public confidence in the profession. Had a submission of prejudice been made at the hearing then the Committee would have had to balance that against the various identified public interests. This was, it is submitted, a case which necessitated an inquiry in the public interest. Bias It is submitted the appellant does not identify the issues which the Committee had allegedly pre-judged or in what respect bias was shown, save for pointing to two instances which have to be seen in the context of how they arose. Save for the assault the factual allegations were admitted. Given the nature and seriousness of the facts admitted the real issues were therefore (i) whether the appellant's conduct was such as to render him unfit to have his name on the register and (ii) whether it was necessary in the public interest to impose sanction on him. It is submitted that there is no evidence for any suggestion of bias or pre-judgment on the part of the Chairman of the Committee. The conduct in question spoke for itself. It was clearly such as to render him unfit to have his name on the register. It is submitted further that the written submissions by Mr Southall-Edwards accepted the proposition that the conduct spoke for itself and was in principle liable to render the appellant unfit to have his name on the register and additionally it was accepted in the submissions that the appellant lacked insight into his conduct. It followed from the findings that the Committee was bound to make the order for the public interest in protecting the safety of patients and public confidence in the profession and maintaining professional standards. The health issue during the hearing The respondent submits that the Committee considered all the evidence in front of it. There was no medical evidence in front of the Committee. The appellant's behaviour was not such that the Committee was bound to infer that he was suffering from a psychiatric illness at the time and this is apparent from the decision. If he was not in a fit state to perform his duty safely at the time then he had a professional obligation to take steps to get assistance, but he did not. It had always been open to him to provide evidence about his current or past medical or mental condition and he has not done so even now. The first mention of medical reports was not until the written submissions right at the end of the hearing. There was no application before the hearing or at the beginning of the hearing for such reports. Sanction: Adjournment for reports No application was made to the committee for an adjournment and there is no proper basis for a report as the appellant's behaviour was not such that the committee was bound to infer he was suffering from a psychiatric illness. The Committee was addressed by the appellant's legal representative on the basis that it had two options in relation to its findings. One was that his medical condition had been the root of the problems and thus an adjournment for reports would be suitable or, alternatively, that it represented a wholly unsatisfactory, unprofessional and extreme behaviour of the pharmacist who did not care what he did said or did and which warrants removal from the register. The Committee decided it was the latter. Had the appellant wished to put medical evidence in front of the Committee as to his mental health at the time of the conduct complained of and indeed currently, he could and should have done so and should have obtained it before the hearing. It follows, it is submitted, that it was not wrong to remove his name from the register without having seen medical evidence. The technical infringements It is submitted that there were a significant number of dispensing errors. To characterise them as technical demonstrates the lack of insight of the appellant. His errors included the controlled drugs Methadone and Pethidine. He failed to gain any insight from his errors and continued to make further errors. As was accepted by the appellant in evidence when questioned by the Chairman of the Committee, he had not been looking at prescriptions when dispensing some of them and also accepted that errors were not acceptable. The requirement to dispense only in accordance with the prescription derives from statute and mis-prescribing carries potential risks for patients and cannot be characterised as technical. In summary the respondent submits that the order was the only appropriate order to make having found quite properly that the misconduct was extremely serious. It was necessary to protect the public, maintain confidence in the profession, maintain standards of the profession and protect those working with the appellant. The sanction was proportionate in the circumstances and was in accordance with the respondent's indicative sanction guide which was current at the time. It is further submitted that the Committee was in the best position to judge the relevant sanction and the court should be slow to interfere. Ruling In reaching my conclusions I indicate that I have read everything in the bundles and more particularly in depth the evidence before the Committee in light of the observations of the Chairman in setting out the Committee's determination. I deal first of all with the events at the beginning of this hearing. Mr Ashby indicated that he had no idea how to conduct his appeal, that he had not read any of the papers and that he only received the respondent's skeleton argument the night before. Enquiries were made of the respondent. The date for this hearing had been fixed at the end of April. The appellant had been notified. The respondent had emailed the appellant on 20th June asking if he wished the skeleton argument in the respondent's bundle by email or post. The appellant responded the same day that he wanted it by email. It was emailed on 21st June and copied to the appellant's legal representative. The court, it is to be noted, has been aware for some time that the appellant for this hearing was to be in person. Mr Ashby said that he relied on his previous legal adviser to do everything for him and that Mr Southall-Edwards had told him nothing about the appeal and how to conduct it. He relied on his lawyer for his grounds and the conduct of his case. He had not received the bundle of documents by email because the computer he was using was losing emails. He did not chase the respondent for a hard copy instead. He did not contact the court to get any advice or assistance. He simply tried to contact Mr Southall-Edwards and when unsuccessful did nothing. The court made it clear, although there had not been a formal application for an adjournment, that it was not minded to adjourn the hearing and thus went through the grounds with the appellant to ensure that both the court and the appellant understood the grounds being advanced. The appellant was allowed to expand on any of the grounds set out in the original document. I will deal briefly with each heading to give the essence of the court's findings. The split hearing It is absolutely apparent from the correspondence that this appellant through his legal adviser had been asking for all matters to be heard together right up until the service of the society's case against him. Mr Southall-Edwards judging from the transcript of the hearing was scrupulous in taking his client's instructions regarding authority to proceed, to make admissions and the like. It is quite clear therefore that this appellant was (a) aware of what was going on, (b) had a full understanding of the allegations against him at a very early stage and (c) was anxious to proceed with expedition with all matters together as he wanted to be registered in Ireland. It was only as the day for the hearing got closer that he sought refuge in the protocol. At first blush the submission that there should have been two processes in place may seem attractive, but the protocol is precisely that. What it does is set out parameters within which cases are to be conducted. There are outside time limits and it is quite clear, given the spirit of the protocol, that expedition and fairness are the key. In the light of the appellant's exhortation for all matters to be tried together as soon as possible because he was being unfairly penalised by not being able to register in another jurisdiction due to the matters hanging over his head, expedition and fairness dictated that the hearing must go ahead as soon as possible. It is to be noted that he was aware of the allegations for a long time, was aware from the end of February 2006 that three inquiries were to be held together with his consent, and was aware of the fourth set of allegations in January 2007. The papers were served two months before the hearing, but (as noted) he already had copies of the statements of witnesses many months earlier. The fourth allegation, although a separate incident, could not add substantially to any preparation. Moreover, the private investigator could only find out about the complainant what the girls had already told the appellant which he himself related to the committee. As none of the girls were prepared to give evidence no prejudice is shown. It is also to be noted that no application was made at the hearing to split the hearing on this basis. In the circumstances, particularly in light of the fact that the appellant admitted most of the matters, the only real challenge being to the fourth matter, which was a question of which witness the Committee believed, the complainant or the appellant, it is difficult to see what prejudice was occasioned. To split the enquiry would have meant further delay and further time and unnecessary cost incurred and would not have been in the interests of justice. As to the submission that the Committee should not have heard the earlier matters due to the lapse of time, this was not pursued in the skeleton argument. Moreover the appellant had the opportunity to challenge the allegations before the body which considers whether reference should be made to the Statutory Committee and he himself chose to make no representations accepting that the allegations were ones which would be likely to be referred. He indicated that he would vigorously defend himself before the Committee. It was due to his desire to have all matters heard together that such delay as there was took place. More importantly, it is in the public interest that serious allegations of the kind that were made are tried. The delay was not such in this case, as we can see from the transcript of the evidence, as to cause any prejudice. The appellant was able at some length to deal with the various incidents and it is to be noted that the girl from the shop that he did track down was not willing to give evidence. Bias It is true that if one looks at the odd individual comment, as the appellant has done, it could be suggested that there was bias. However, one has to read the whole of the proceedings and not just pick out extracts out of context. The extract complained of by the appellant therefore has to be read in context. The court itself drew the respondent's attention to a couple of other extracts which could, without more, seem to indicate bias. For example, Day 4 (page 54) which without more could seem to indicate bias. However, these when read in context in my view did not demonstrate bias. The extracts themselves will not be set out in full because to put them in context would mean setting out a substantial amount of the evidence. There is no doubt that the appellant was not a sympathetic witness, that sings out from the transcript. It is also clear from the evidence that the conclusions reached by the Committee were open to it, particularly in the light of admissions made in relation to all but the assault allegation. Thus any allegations of bias cannot be properly sustained. Failure to take sufficient account of the appellant's health at the time of the conduct complained of and during the course of the proceedings Again having read the transcript in full the Committee was justified in taking the approach that it did. There was no medical or psychiatric evidence in front of it. There could have been. There was unchallenged evidence that the appellant's fiancée was terminally ill and this obviously would have affected him. But the Committee found that if he was so ill, as he claimed in the witness box, then he should have taken time off and should have alerted his colleagues to his predicament. Indeed a failure by him at a time when he knew, according to him, that he was very ill both physically and mentally was itself a matter of great professional concern. We note to date that there has been no professional evidence to back up the assertions despite the appellant telling the court that he has seen a couple of psychiatrists. Sanction As to the submissions that it was wrong to remove the appellant's name from the register without having adjourned and considered evidence as to his physical and mental health, although it has been suggested that the normal course of events is for this to happen, this is only an assertion. The issue was raised in the closing submissions of the appellant's legal representative who himself indicated that he had been pleasantly surprised at the appellant's ability to conduct himself during the course of the proceedings and that had the hearing happened nearer the time of the earlier events that a different person would probably have confronted the Committee. As already noted, Mr Southall-Edwards submitted that there was one of two views that the Committee could take. The Committee took the view that this was not a case which arose out of such disorder of mind of sufficient seriousness to render the appellant not properly in control of or responsible for his actions. As to the suggestion that the Committee took too serious a view of technical infringements - errors in prescribing, as the Committee Chairman noted in questioning the appellant, can sometimes be fatal and are serious. In any event the Committee were looking at all of the evidence in coming to a decision on the serious nature of the charges proved and the sanction to follow. I have read the transcripts of the evidence and the other documents but the Committee had the further advantage of seeing the appellant give evidence. It was a matter for them whether its members considered it necessary to call reports before considering sanction. Their decision not to in the circumstances cannot be impugned. Their description of the appellant was apt. There can be no doubt that the sanction imposed was the correct one in the circumstances of this case. It is apparent from the hearing, and this one, that the appellant has little insight into how he is perceived by other professionals and has little insight as to how even his admitted behaviour offends the high professional standards which the public are entitled to expect and the profession is entitled to impose. For these and the other reasons which have already been rehearsed, this appeal is dismissed. MR BRADLEY: My Lady, in view of your Ladyship's judgment, on behalf of the respondents I ask for an order that the appellant pay the costs of the appeal. My Lady in making the submission may I ask your Ladyship to have a look at a letter which was written to Mr Ashby on 1st April 2008. (Handed) A copy of which is on its way up to your Ladyship. I make the application of course on the basis of the outcome and that this letter, as your Ladyship will see, refers in the first paragraph to the outstanding appeal and then in the second paragraph, my Lady, please, as you will also be aware there were some recent material developments. MRS JUSTICE DOBBS: Yes, Mr Ashby referred to being in prison but I did not pursue it because it was not relevant to what I had to decide. MR BRADLEY: Certainly not relevant to what your Ladyship has had to decide. MRS JUSTICE DOBBS: That is why I did not ask him for any further or better particulars. Was that the same case? MR BRADLEY: Yes. What happened was that the determination was given a month after the hearing was finished and on the occasion when the Committee gave judgment the society was represented by an officer of the society and at the end of the hearing -- MRS JUSTICE DOBBS: Was there a trial for the actual bodily harm? MR BRADLEY: Yes, there was a trial. Mr Ashby was found guilty. MRS JUSTICE DOBBS: He was convicted and by virtue of that in any event -- MR BRADLEY: He pleaded guilty. I am helpfully informed he pleaded guilty. He received a prison sentence of I think 14 months of which he served seven. MRS JUSTICE DOBBS: It was more than a push then. MR BRADLEY: My Lady, it was a strike on the head with a metal bar. MRS JUSTICE DOBBS: Is this the same one involved in this case? MR BRADLEY: It all happened, my Lady, when the decision in this case was given. MRS JUSTICE DOBBS: Is it the same assault as in -- MR BRADLEY: No, I was going to say -- MRS JUSTICE DOBBS: 14 months would be excessive for a push. I do not know need to know the details of this. It is not relevant. The actual details are not relevant. He had a prison sentence of 14 months and he served seven. The point at issue is that he has been struck from the register in any event and by virtue of the conviction. So the advice that was being given here was, actually your appeal is academic, even if you won it is not going to change the position, you are still going to be struck off and therefore you would not be able to register in Ireland or wherever. That is the point. MR BRADLEY: Your Ladyship is quite right. MRS JUSTICE DOBBS: Yes. Did you get any response? MR BRADLEY: No. No response. What this letter did was give Mr Ashby the opportunity to withdraw on the basis that each side bear their own costs, as it were, and reminded Mr Ashby that were the appeal to proceed to a contest then there would be the application for costs which I now make to your Ladyship. MRS JUSTICE DOBBS: What is the sum and have you alerted Mr Ashby? MR BRADLEY: My Lady, in the letter, you will see in the penultimate paragraph of the letter on the second page in anticipation the society's costs of the appeal will be in the region of £15,000. On Friday of last week, in accordance with the rules, a schedule was served on Mr Ashby by email. The figure on the schedule is £14,482.82. MRS JUSTICE DOBBS: Yes. Is there anything else you want to add? MR BRADLEY: No, my Lady. I am grateful. MRS JUSTICE DOBBS: Mr Ashby, costs. What do you say about that? Two points have been made. The first point is that a letter of 1st April alerted you to the fact that really pursuing this appeal was academic because even if you won you would still be struck off because of the conviction. And (2) in the letter it told you the rough cost, the risk that you were standing of pursuing the appeal, because the costs would be about £15,000 and (3) on the Friday they served a schedule on you with costs of about £14,500. You have not succeeded on the appeal and therefore the normal course is that costs follow the event and that a costs order should be made in the sum they are asking for. MR ASHBY: I have no money. I cannot pay anything. I have nothing left. MRS JUSTICE DOBBS: That does not stop the court from making a costs order, but you say you have got no means? MR ASHBY: No. I have nothing left. MRS JUSTICE DOBBS: Anything else you want to add in relation to that? MR ASHBY: No. MRS JUSTICE DOBBS: There will be an order that the appellant pay the respondent's costs in the sum of £14,482.82. MR BRADLEY: I am grateful.

JUDGE DENYER: This is an appeal by way of case stated from the decision of the Deputy District Judge given on 9th April 2008. On that date she allowed an appeal by the respondent against a decision of the local licensing authority to revoke the respondent's premises licence in respect of Delboy's Sports Bar, Rigby Road in Blackpool. The matter arose in this way. On 1st July 2007 the Health Act 2006 came into force. Section 8 of that Act is in these terms. By section 8(1): "It is the duty of any person who controls or is concerned in the management of smoke-free premises to cause a person smoking there to stop smoking." By subsection (4) of section 8: "A person who fails to comply with the duty in subsection (1) ... commits an offence." Lastly, although I shall return to this, subsection (7): "A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding a level on the standard scale specified in regulations made by the Secretary of State." The respondent to this appeal, Mr Howitt, is an avowed opponent of the smoking ban. He believes it is a gross interference with individual liberty and property rights. It may be that others agree with him. In any event he has allowed people to smoke in his pub. He has been convicted on at least two occasions of contravening section 8, ie failing to stop people from smoking. He made it clear to the Deputy District Judge and indeed to others that he intended to continue with that stance. Thus it was that the matter came before the licensing authority pursuant to the review provisions of section 51 of the Licensing Act. That in turn brought into play section 4 of that Act. By section 4 of the Licensing Act 2003 under the heading "General duties of licensing authorities", it is provided in section 4(1) that: "A licensing authority must carry out its functions under this Act ('licensing functions') with a view to promoting the licensing objectives". By subsection (2) the licensing objectives are set out. I am particularly concerned with section 4(2)(a), namely the licensing objective of "the prevention of crime and disorder." Again, although I shall return to this later, I note that by section 4(3): "In carrying out its licensing functions, a licensing authority must also have regard to- (b) any guidance issued by the Secretary of State under section 182." As I say, the matter had come before the licensing authority by way of review. Section 52 of the Act deals with the determination of a licensing review. That is set out at page 82 of the bundle. By section 52(1): "This section applies where- (a) the relevant licensing authority receives an application made in accordance with section 51." By subsection (2): "Before determining the application, the authority must hold a hearing to consider it and any relevant representations." And by subsection (3) - (3) and (4) being the important parts: "The authority must ... take such of the steps mentioned in subsection (4) (if any) as it considers necessary for the promotion of the licensing objectives." Those steps include in (4)(e) the revocation of the licence. The licensing authority, purportedly applying the section 4 criteria decided to revoke the respondent's licence and it was that decision that was successfully appealed by him to the Deputy District Judge. Her judgment very much centres on the meaning of the words "the prevention of crime and disorder" in section 4 of the Licensing Act. The appellants says that "crime" and "disorder" are to be regarded disjunctively. The respondent says that the words are to be read conjunctively so that effectively the word "disorder" qualifies the word "crime". It was this latter interpretation that appealed to the Deputy District Judge. In the stated case, and I will just select certain passages from it, she says as follows. Having found as a fact and indeed by agreement that the respondent did not enforce the smoking ban and the respondent effectively confirming to her that he would continue to flout the smoking ban, she set out (at page 14 of the bundle) the contentions thus: "It was contended that I should consider the words 'crime' and 'disorder' independently from one another and adopt a strict interpretation of the word 'crime' with its ordinary, everyday meaning in the context of the licensing objectives. It was submitted that in doing so, I should then find that the respondent would continue to commit 'crime' on the premises." Then she said this: "I was of the opinion that the term 'crime and disorder' under the Licensing Act 2003 was directed towards the drunken, yobbish, alcohol-related behaviour..." She continued: "I did not agree that the word 'crime' should be given the strict interpretation but rather that it formed part of a phrase that covered the kind of behaviour, described above..." She went on to say: "... smoking is a Public Health issue, which is not a licensing objective for the purposes of the Act. I was therefore of the opinion that the issue of unlawful smoking was not relevant to the objectives of promoting the prevention of crime and disorder." She also noted that she would have expected, given this was a crime and disorder objection, some police representation and she was also concerned about the dangers of duplicity and that if she were to find in favour of the appellants it would effectively be punishing the respondent twice because he had already been prosecuted under the Health Act. The question for me is indeed the one that the learned Deputy District Judge poses as the question for this court at page 15 of the bundle: "Was the court correct to decide that evidence of unlawful smoking on the licensed premises was not relevant to the licensing objective of promoting the prevention of crime and disorder?" I will deal with a couple of ancillary points which I have already mentioned arising from her ruling/statement of case. It seems to me that the absence of police representation or objections at the hearing is frankly irrelevant to a consideration of the issue. So far as the duplicity point is concerned, this seems to me to confuse the issue of culpability of an individual under the Health Act with the duty of a licensing authority to promote the licensing objectives. As a matter of strict definition it seems to me that an offence contrary to section 8 of the Health Act is a criminal offence. I have already read subsection (7) of section 8, but I will just repeat myself in that respect. By subsection (7): "A person guilty of an offence under this section is liable on summary conviction to a fine..." So it is clear that section 8 creates a criminal offence which is punishable by way of fine. It is equally obvious that of itself and by itself a section 8 offence is not a crime of disorder. The respondent therefore says it is not a relevant matter for the purposes of section 4(2)(a) of the Licensing Act and at this point it is necessary to consider section 4(3) of that Act and the whole question of the Secretary of State's guidance. Again, as I have already said, but I will repeat, by section 4(3) in carrying out its licensing functions a licensing authority must also have regard to any guidance issued by the Secretary of State. The relevant guidance, which came into force on 28th January 2007, is set out at page 101 and following of the appellant's bundle. I shall refer to one or two parts of the guidance. At page 115, which is paragraph 1.23 of the guidance: "The Licensing Act is part of a wider Government strategy to tackle crime, disorder and anti-social behaviour and reduce alcohol harm." So that gives us some idea of the broader purposes behind the current strategy. At paragraph 1.28 and following, set out at page 116, there is a reference to certain specific statutes relevant to that strategy: the Crime and Disorder Act 1998, the Anti-social Behaviour Act 2003 and the Violent Crime Reduction Act 2006. Those are specific examples of what are said to be related legislation. They do not necessarily assist greatly in resolving the issue with which I have to deal. But if one goes to page 187 of the bundle there is there set out paragraph 11.25 of the guidance and that does have some relevance. At paragraph 11.25 we find the following: "There is certain criminal activity that may arise in connection with licensed premises, which the Secretary of State considers should be treated particularly seriously. These are the use of the licensed premises: • for the sale and distribution of Class A drugs and the laundering of the proceeds of drugs crime; • for the sale and distribution of illegal firearms; • for the evasion of copyright in respect of pirated or unlicensed films and music... • for the purchase and consumption of alcohol by minors... • for prostitution or the sale of unlawful pornography; • by organised groups of paedophiles to groom children; • as the base for the organisation of criminal activity, particularly by gangs; • for the organisation of racist activity or the promotion of racist attacks; • for unlawful gaming and gambling; and • for the sale of smuggled tobacco and alcohol." I appreciate straightaway the point that the respondent makes which is that no one has ever alleged that his premises have ever been used for anything like that and I make it absolutely plain that I fully accept that. But the point I think is this: Although on any view those are serious crimes, they do not necessarily involve any disorder on the premises. I have already indicated that there is no suggestion that such activities go on at the respondent's pub, but the fact that they are not necessarily disorderly offences rather undermines the argument that crime and disorder are necessarily conjoined for the purposes of section 4. Of course I accept that the guidance set out in that document is certainly not to be construed as a statute. I was helpfully referred by counsel for the Secretary of State to the decision of Beatson J in a case involving Wetherspoons [2006] EWHC 815 Admin, [2007] 1 AllER 400. The facts need not concern us. At paragraph 58, which is at page 417 of the report, there is this short passage: "... guidance such as this is not drafted in the tight way in which a statute is drafted." Then there is a reference to a couple of other decisions, including a decision of Sullivan J where Beatson J quotes from that judgment: "'a legalistic approach to the interpretation of development plan policies is to be avoided'. A similar approach has been taken in contexts other than planning: see the authorities referred to in paragraph 82 below. These qualities apply to the licensing guidance in this case and must be taken into account in considering whether the statements favouring a general lengthening of licensing hours preclude the application of a cumulative impact policy to an application to increase hours." The point of course being that one takes the guidance and guidelines into account because the statute says they have to be taken into account, but they are not to be construed as if they were themselves a statute. Let me at this point deal with another point raised by the respondent. He says, and rightly says, that when the Licensing Act 2003 was introduced the smoking ban did not exist - in other words the crime of permitting smoking in pubs was but a glint in the eye of anti-smoking campaigners. However, that is not really to the point. Times move on; times change; legislative changes are introduced and technology and science may advance, all of which may impinge upon the interpretation of a statute and this is very much dealt with in the speech of Lord Bingham in a decision called Quintavalle [2003] UKHL 13, [2003] 2 AC 687. That was a case in fact under the Human Fertilisation and Embryology Act 1990 where technology had indeed moved on (if technology is the right word to apply to medical science) in and about the creation of embryos. At paragraph 9 of his speech, Lord Bingham said this: "There is, I think, no inconsistency between the rule that statutory language retains the meaning it had when Parliament used it and the rule that a statute is always speaking. If Parliament, however long ago, passed an Act applicable to dogs, it could not properly be interpreted to apply to cats; but it could properly be held to apply to animals which were not regarded as dogs when the Act was passed but are so regarded now. The meaning of 'cruel and unusual punishments' has not changed over the years since 1689, but many punishments which were not then thought to fall within that category would now be held to do so. The courts have frequently had to grapple with the question whether a modern invention or activity falls within old statutory language... A revealing example is found in Grant v Southwestern Properties Ltd (1975) where Walton J had to decide [in those far off days of prehistoric technology] whether a tape recording fell within the expression 'document' in the Rules of the Supreme Court. Pointing out ... that the furnishing of information had been treated as one of the main functions of a document, the judge concluded that the tape recording was a document." From this, therefore, it does seem to me to be abundantly clear that the words of a statute can clearly apply to future events, including changed future events, provided only that those future events fall within the wording of the statute. Smoking in pubs was not a crime in 2003 but it was made so in 2007. Words in a statute are, so far as possible, to be given their ordinary and natural meaning. As I have already indicated, although not a crime of disorder permitting smoking in a place where smoking is barred is a criminal offence by virtue of section 8 and as therefore a simple matter of definition it is a crime. The use of the word "and" can sometimes suggest a conjunctive relationship between two activities, but not necessarily so. It can have a disjunctive use. At divider 6 of the intervenor's bundle there is a fairly lengthy passage from Bennion on Statutory Interpretations set out. I simply go to what is page 1192 from the extract that has been photocopied. There there is a heading "Disjunctive use of 'and' The word 'and' may be used disjunctively as well as conjunctively." The learned author gives this illustration: "The Court of Appeal held that in article 10 of the European Convention on the Recognition and Enforcement of Decisions Concerning Custody of Children, given the force of law by the Child Abduction and Custody Act 1985, the statement that 'recognition and enforcement' of a foreign judgment may be refused was to be construed disjunctively. This meant that a judgment might be recognised but not enforced. The court had regard to the statement in Dicey and Morris on the Conflict of Laws that 'while a court must recognise every foreign judgment which it enforces, it need not enforce every foreign judgment which it recognises'." With that in mind, one goes back to the wording of section 4. It is true, and indeed is the case, that it is hard to think of any disorderly behaviour which would not in fact be criminal. Equally though, as the Secretary of State's guidelines show, there may be many examples of serious criminal behaviour, serious crimes, which do not involve disorder. To give the section the meaning for which the respondent contends and the Deputy District Judge gave it might effectively lead to an authority having to ignore that guidance from the Secretary of State, which by definition the licensing authority and indeed the court has to have regard to by virtue of section 4. Like the respondent I agree that to regard smoking in a public place such as his pub as a serious crime on a par with dealing in heroin, gun running or even flogging counterfeit videos is an absurdity. Nevertheless, it is a crime. Given the respondent's convictions and his stated intention to carry on the permitting of smoking, the licensing authority were entitled to say that the revocation of his licence did promote the licensing objective of preventing crime. The answer therefore to the learned Deputy District Judge's question at page 15 of the bundle, the question I have to decide, namely "Was the court correct to decide that evidence of unlawful smoking was not relevant to the licensing objective?" the answer is yes the court was wrong. Accordingly I allow this appeal by way of case stated. That is the end of the judgment. I agree that it seems to follow, as we said right at the outset -- this is not part of the judgment -- I would still hope that some sort of agreement can be arrived at because he is clearly a concerned publican, but I accept that is not my function and not my role. So for the moment I am effectively restoring the decision of the licensing authority. MR WILLIAMS: My Lord, I am grateful. I do not know if Mr Howitt wishes to say anything at this stage? MR HOWITT: Only that I think at the end of the day, with due respect, law and justice are two different things. JUDGE DENYER: I am afraid that is often the case. MR HOWITT: What I would ask for is, if you could just enlighten me today, I will respect your decision, I will not, I will give an undertaking if need be, however, that I will not allow smoking because this is what---- JUDGE DENYER: I cannot actually deal with that. I hope though that you and the licensing authority can sort it out. MR HOWITT: I would like to ask you, sir, for - I would like obviously to appeal against this decision. Will I get the stated case in writing then from yourself so that I can---- JUDGE DENYER: You can apply, I think, for a copy of the judgment. MR HOWITT: Apply for a copy, yes, and I mean that with respect, sir. I mean no disrespect. JUDGE DENYER: I do not take these things personally at all. The only thing is you will need leave either from me or from the Court of Appeal. I think I am disinclined to give you leave because I think the answer was fairly plain. So I am going to refuse you leave to appeal my decision to the Court of Appeal. That does not prevent you going to the Court of Appeal and trying to persuade them to grant you leave. But you might start running into some fairly heavy costs sanctions if you do. MR HOWITT: I think it is of great public interest and I think this is one of the few cases where the public, I mean that the taxpayer should pay for the costs, because of the public interest. JUDGE DENYER: Yes. Let me make a note of the reasons why, as I am obliged to, I am not giving permission for Mr Howitt to appeal. MR HOWITT: Sir, on that, I do not know if I am allowed to state my reason for it. My reason for it is clearly you have stated that crime and disorder, that the way you take it that it happens in public does not necessarily have to happen in the pub. I am saying that contraband and counterfeit selling drugs lead to disorder either inside the pub or outside the pub, it is immaterial. These are serious crimes that lead to disorder at any point, at the point in the pub or a point outside the pub, certainly all these crimes all lead to disorder at a later date, if not that day, and I am saying smoking in a pub leads to no disorder at any time whether outside my pub or inside my pub. That is my main reason for the argument and that is why I wish for leave to appeal. JUDGE DENYER: Yes. MR WILLIAMS: My Lord, there are two points. The first one, and my learned friend will, I think, endorse this view is that there lies no further right to appeal from this decision this being-- JUDGE DENYER: You are quite right. It can go only go to the House of Lords, can it not? MR WILLIAMS: Yes, that would be the only way. JUDGE DENYER: I am certainly not giving leave. MR HOWITT: I knew it was the House of Lords. JUDGE DENYER: You are quite right. MR WILLIAMS: The secondary application is one for costs. In handing Mr Howitt and yourself a copy of these costs, those who instruct me wish to make it very clear we do not seek the full amount we seek a contribution and we do so having regard to Mr Howitt's circumstances. We take that fair position at the outset. JUDGE DENYER: Is the secretary of State applying for costs as well? MISS BROADFOOT: No, my Lord. JUDGE DENYER: I imagine you take the view that this was a not unimportant matter from the point of view of a publican such as yourself. You won in front of the District Judge-- MR HOWITT: Yes, I did not receive costs. I applied for costs. I did about 200 hours work. The judge -- I did not appeal against it, although she said I could appeal. I accepted the judge completely. I think it is a rather complicated matter. I am going to abide by your decision today, sir, and I will not allow smoking, but I think it would be an insult to grant costs against me. JUDGE DENYER: I have the point. MR HOWITT: I mean it's of huge public interest and the taxpayer, 24 per cent of people who smoke pay these taxes also---- JUDGE DENYER: Yes. No, I think that there is some public interest. I do not pretend that my judgment will necessarily put an end to it, but there was some public interest in the outcome of this appeal, witness the fact that it has been appealed here and the Secretary of State has felt it necessary to intervene. You did win in front of the District Judge. You have been brought here. You have lost, but in the particular circumstances of this case, because of the point of public interest involved, I shall make no order for costs. MR HOWITT: Thank you very much, sir. JUDGE DENYER: I had better just warn you, if you do pursue it further you might just find yourself on the receiving end of a fairly hefty costs liability. Do you follow? MR HOWITT: Yes, thank you very much. JUDGE DENYER: Thank you for the moderation in which you argued it and thank you both.

SECOND SECTION CASE OF GINIEWSKI v. FRANCE (Application no. 64016/00) JUDGMENT STRASBOURG 31 January 2006 FINAL 31/04/2006 In the case of Giniewski v. France, The European Court of Human Rights (Second Section), sitting as a Chamber composed of: András Baka, President,Jean-Paul Costa,Rıza Türmen,Karel Jungwiert,Mindia Ugrekhelidze,Antonella Mularoni,Elisabet Fura-Sandström, judges, and Sally Dollé, Section Registrar, Having deliberated in private on 7 June 2005 and 10 January 2006, Delivers the following judgment, which was adopted on the last-mentioned date: PROCEDURE 1. The case originated in an application (no. 64016/00) against the French Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by an Austrian national, Mr Paul Giniewski (“the applicant”), on 13 December 2000. 2. The applicant was represented by Arnaud Lyon-Caen, Françoise Fabiani, Frédéric Thiriez, a law firm authorised to practise in the Conseil d'Etat and the Court of Cassation. The French Government (“the Government”) were represented by their Agent, Mrs E. Belliard, Director of Legal Affairs at the Ministry of Foreign Affairs. 3. The Government of Austria, having been informed by the Registrar of their right to intervene (Article 36 § 1 of the Convention and Rule 44 § 1 (a) of the Rules of Court), indicated in a letter of 29 June 2005 that they did not intend to avail themselves of that right. 4. The applicant alleged that there had been a violation of his right to freedom of expression within the meaning of Article 10 of the Convention. 5. The application was allocated to the Second Section of the Court (Rule 52 § 1). Within that Section, the Chamber that would consider the case (Article 27 § 1 of the Convention) was constituted as provided in Rule 26 § 1. 6. On 1 November 2001 and 1 November 2004 the Court changed the composition of its Sections (Rule 25 § 1). This case was assigned to the newly composed Second Section (Rule 52 § 1). 7. By a decision of 7 June 2005, the Chamber declared the application admissible. 8. The applicant and the Government each filed observations on the merits (Rule 59 § 1). 9. By letters of 15 June 2005, transmitted through the Registry, the Court requested the parties to submit, if they so wished, supplementary information and observations. It also asked the applicant's representative to submit his claims for just satisfaction under Article 41 of the Convention by 9 September 2005. 10. On 20 September 2005, no request for an extension of the time allowed having been received by the Court, the applicant filed further observations and his claims for just satisfaction. As these had been filed outside the time-limit, the President of the Chamber decided, under Rule 38 § 1, not to include them in the case file. THE FACTS I. THE CIRCUMSTANCES OF THE CASE A. The proceedings 11. The applicant was born in 1926 and lives in Paris. He explained that he sought in all of his work to promote a rapprochement between Jews and Christians. 12. The facts of the case, as submitted by the parties, may be summarised as follows. 13. In its issue of 4 January 1994, the newspaper Le quotidien de Paris published an article written by the applicant, entitled “The obscurity of error” concerning the papal encyclical “The Splendour of Truth” (“Veritatis Splendor”), which had been published at the end of 1993. 14. On 18 March 1994 the association General Alliance against Racism and for Respect for the French and Christian Identity (Alliance générale contre le racisme et pour le respect de l'identité française et chrétienne (AGRIF)) brought proceedings before the Paris Criminal Court against Mr P. Tesson, publishing director of the newspaper, the applicant and the newspaper Le quotidien de Paris, as author, accomplice and the entity civilly liable respectively, alleging that, through publication of the above-mentioned article, they had made racially defamatory statements against the Christian community, an offence punishable under section 32, second paragraph, of the Freedom of the Press Act of 29 July 1881. In particular, they referred to the following passages: “The Catholic Church sets itself up as the sole keeper of divine truth ... It strongly proclaims the fulfilment of the Old Covenant in the New, and the superiority of the latter ... ... Many Christians have acknowledged that scriptural anti-Judaism and the doctrine of the 'fulfilment' [accomplissement] of the Old Covenant in the New led to anti-Semitism and prepared the ground in which the idea and implementation [accomplissement] of Auschwitz took seed.” 15. By a judgment of 4 October 1994, the Criminal Court dismissed the objections of invalidity raised by the applicant and, inter alia, committed the case for trial. By a judgment of 8 March 1995, the Criminal Court found established the offence of publicly defaming a group of persons on the ground of membership of a religion, in this case the Christian community. The publishing director and the applicant were both ordered to pay a fine of 6,000 French francs (FRF). 16. The Criminal Court found the AGRIF's civil application admissible and ordered the publishing director and the applicant, jointly and severally, to pay the association one franc in damages and FRF 7,000 in application of Article 475-1 of the Code of Criminal Procedure. In addition, the court ordered that its decision be published, at the defendants' expense up to FRF 10,000, in a national newspaper. In its judgment, it stated, inter alia: “The Catholic Church, which is described as holding, exclusively and in error, divine truth, is accused of proclaiming its attachment to the doctrine of the fulfilment of the Old Covenant in the New Covenant, a doctrine that was reaffirmed in the encyclical 'The Splendour of Truth'. It is also stated that anti-Judaism in the Scriptures and this doctrine of fulfilment 'led to anti-Semitism and prepared the ground in which the idea and implementation of Auschwitz took seed'. Thus, according to the author of the text, not only the idea, but even the implementation of the massacres and horrors committed at Auschwitz, the symbol of the Nazi extermination camps, was a direct extension of one of the core doctrines of the Catholic faith, namely the doctrine of the fulfilment of the Old Covenant in the New, and thus directly engages the responsibility of Catholics and, more generally, Christians. Such a statement clearly undermines the honour and character of Christians and, more specifically, the Catholic community, and is covered by the provisions of section 32, second paragraph, of the [Freedom of the Press Act] of 29 July 1881. ... the causal link between membership of a religion and the events imputed by the impugned remarks is certainly present in this case: it is because they adhere to a religion that has allegedly displayed anti-Semitism in its past and because they acknowledge the status of the papal encyclical and the doctrine of fulfilment asserted in it that Christians and Catholics are accused of bearing some responsibility for the Auschwitz massacres. ... Even if the defendant was entitled to condemn Christianity's historical anti-Semitism and to alert the reader to any new expression or resurgence of that sentiment, by pointing out that, historically, the various Christian churches have sometimes accepted or even encouraged the idea of 'the teaching of contempt' with regard to the Jewish people, who are described as deicidal, he nevertheless had no right, when the new papal encyclical was published reaffirming the doctrine of 'fulfilment', to use extreme terms and, through a process of generalisation, to hold the Catholic community responsible for the Nazi massacres at Auschwitz. The witnesses questioned at the hearing, at the defendant's request and in support of his allegation of good faith, all claimed that Nazism, a racist and biological doctrine, was totally unconnected to the historical anti-Semitism of Christians and the doctrine of 'fulfilment', which concerns the full realisation of the law of God's old alliance with his people in the new alliance born of Christ's sacrifice. Finally, the confusion made between, on the one hand, Christian anti-Semitism and the encyclical 'The Splendour of Truth', which Mr Giniewski furthermore refrained from commenting on during the hearing, and, on the other hand, the persecution of the Jews in Auschwitz, reflects personal animosity on the part of the defendant and resentment towards the Christian community which lack good faith, since the disputed statements go well beyond theoretical and theological discussion. In this regard, the Court notes the deliberate use of the same word 'accomplissement' to describe the organisation of the massacres in Auschwitz and the doctrine reaffirmed by the Pope in his encyclical. It follows from these elements as a whole that proof of the defendant's good faith has not been provided.” 17. The applicant appealed. In a judgment of 9 November 1995, the Paris Court of Appeal upheld, in so far as it concerned the applicant, the judgment of 4 October 1994 and overturned the judgment of 8 March 1995. The Court of Appeal acquitted the applicant and dismissed the civil party's claims against him. In particular, it held that: “... in his article, Paul Giniewski criticises the encyclical 'The Splendour of Truth' for, in essence, enshrining within the body of theological principles the doctrine of the 'fulfilment' of the Old Covenant in the New, a doctrine he considered to contain the seeds of anti-Semitism; this criticism is expressed unambiguously in the penultimate paragraph of the article ...; ... the contention in Paul Giniewski's statements may be summarised as follows: certain principles of the Catholic religion are tainted with anti-Semitism and contributed to the Holocaust; ... the Court is fully aware of the reactions such an article could evoke within the Catholic community, even if the author claims to be reflecting the opinion of 'many Christians'; ... nonetheless, ... in criticising the encyclical 'The Splendour of Truth' so strongly, Paul Giniewski opened a discussion that was both theological and historical on the scope of certain religious principles and on the origins of the Holocaust; given that it concerns exclusively doctrinal debate, the argument put forward by this author is not, as a matter of law, a specific fact that could amount to defamation ...” 18. The AGRIF appealed on points of law. In a judgment of 28 April 1998, the Court of Cassation quashed the judgment of the Paris Court of Appeal, “but only in so far as it concerned the civil action, all other provisions being expressly upheld”. It remitted the case to the Orléans Court of Appeal. The Court of Cassation stated: “... by ruling in this way, although the impugned statements imputed incitement to anti-Semitism and responsibility for the massacres committed at Auschwitz to the Catholic community, the Court of Appeal did not give a legal basis to its decision; The judgment falls to be quashed, but only in respect of the civil action ...” 19. In a judgment of 14 December 1998, the Orléans Court of Appeal, ruling on the civil claims and following the Court of Cassation's analysis, upheld the judgments of 4 October 1994 and 8 March 1995 in so far as they concerned the applicant. The Court of Appeal made a new award of FRF 10,000 to the AGRIF on the basis of Article 475-1 of the Code of Criminal Procedure. It also ordered that the following statement be published, at the defendant's expense, in a national newspaper of the civil party's choice: “By a judgment of 14 December 1998, the Orléans Court of Appeal ordered Paul GINIEWSKI, journalist, to pay the General Alliance against Racism and for Respect for the French and Christian Identity (AGRIF) 1 FRANC (one) in damages, on the ground that he had committed the offence of public defamation against a group of persons on account of their membership of a religion, in the instant case the Christian community, through his publication of ... an article entitled 'As regards the Encyclical “The Splendour of Truth”, The obscurity of error...' ”. 20. In its judgment, the Court of Appeal noted, inter alia: “... The defendant is wrong in denying that he accused Catholics and, more generally, Christians of being responsible for the Nazi massacres; it is of little importance that this responsibility is viewed in a more or less long-term perspective, given the use of the expression 'prepared the ground'; It emerges, after analysis of the documents submitted, that neither the Pope nor the [Catholic] Church of France alleges the direct responsibility of Catholics in the extermination at Auschwitz; Thus, on account of their membership of a religion, Christians are indeed victims of the offence of defamation; ... the virulence of the article's general tone, the parallel made between the 'doctrine of fulfilment' and the 'implementation of Auschwitz' and even the use of this last word, which is sufficient in itself to evoke both genocide and the extermination of opponents of the Nazi regime, rule out the possibility of the author's good faith ...” 21. The applicant appealed on points of law. As part of the single argument set out in support of his appeal, he referred to Article 10 of the Convention and claimed that his objective and sincere statements had not been unnecessarily polemical and malicious and that they had not therefore failed to meet the requirements of good faith. 22. On 14 June 2000 the Court of Cassation dismissed the appeal on points of law on the following grounds: “... the Court of Cassation is satisfied from the wording of the judgment appealed against and analysis of the evidence in the case file that the Court of Appeal, in ruling that the defendant was excluded from the benefit of a finding of good faith, relied on grounds which were sufficient and free of contradictions, answered the submissions made to it and analysed the particular circumstances relied on by the defendant ...” B. The article 23. The published article read: “As regards the encyclical 'The Splendour of Truth' The obscurity of error... John Paul II's new encyclical, 'The Splendour of Truth', concerns the basis of moral theology from the perspective of Catholic teaching. It is intended to provide the faithful with answers to the questions put to Jesus by a young man in a New Testament parable: What good thing shall I do, that I may have eternal life? Unfortunately, from the point of view of other religions and from the Jewish perspective, the Pope's text is based on two types of assertion: 1. The Catholic Church sets itself up as the sole keeper of divine truth and assumes the 'duty' of disseminating its doctrine as the sole universal teaching. 2. It strongly proclaims the fulfilment of the Old Covenant in the New and the superiority of the latter, a doctrine which propagates 'the teaching of contempt' for the Jews, long since condemned by Jules Isaac as an element in the development of anti-Semitism. According to John Paul II, 'the task of authentically interpreting the word of God ... has been entrusted only to those charged with the Church's living Magisterium', which is consequently empowered to state that some theological and even philosophical affirmations are 'incompatible with revealed truth'. The Catholic Church is said to possess 'a light and a power capable of answering even the most controversial and complex questions'. Non-Catholics are viewed with disdain: '... whatever goodness and truth is found in them is considered by the Church as a preparation for the Gospel.' The passing away of Jewish religious tradition is asserted with the same arrogance. The Law, which the Church labels 'old', merely prefigures Christian perfection. The Mosaic Decalogue is 'a promise and sign of the New Covenant'. Jesus is the 'new Moses'. The Law of Moses is only a 'figure of the true law', 'an image of the truth'. Moses came down from Mount Sinai carrying 'tablets of stone' in his hands. The apostles carried 'the Holy Spirit in their hearts'. Christian law is 'written not with ink but with the Spirit of the living God, not on tablets of stone but on tablets of human hearts'. The prescriptions imparted by God in the Old Covenant 'attained their perfection in the New'. For the old law was incomplete. Admittedly, it had a pedagogical function. But it was unable to give the 'righteousness' it demanded: only the new law gives grace, it 'is not content to say what must be done', but also gives the power to 'do what is true'. We find here ideas which were already explored in the voluminous 'Catechism of the Catholic Church' of 1992. As in that unfortunate catechism, a few arrows are also fired, in line with Catholic tradition, at the Pharisees. The faithful are called to take 'great care ... not to allow themselves to be tainted by the attitude of the Pharisee', which, in our day, is expressed in adapting the moral norm to one's own capacities and personal interests, that is, in rejecting the very idea of a moral norm. One must wonder how Catholics and the Catholic religious authorities would 'appreciate' an equivalent Jewish attack on the New Covenant. One must also wonder how the Polish pontiff reconciles his encyclical with the exhortation in the 'Ten Points of Seelisberg' and with the requirement envisaged in the first draft of the declaration on the Jews at Vatican II, calling on Christians not to teach anything that would vilify the Jews and their doctrine. Many Christians have acknowledged that scriptural anti-Judaism and the doctrine of the 'fulfilment' [accomplissement] of the Old Covenant in the New led to anti-Semitism and prepared the ground in which the idea and implementation [accomplissement] of Auschwitz took seed. No consideration is given to this by the Holy See in 1993. In proclaiming the splendour of truth, it perseveres in obscurity and error.” C. The general context 24. The applicant's statements contribute to a recurrent debate of ideas between historians, theologians and religious authorities. The two most recent Popes, John Paul II and Benedict XVI, as well as the hierarchy of the Catholic Church, have discussed the possibility that the manner in which the Jews are presented in the New Testament contributed to creating hostility against them. In particular, reference is made to the “Declaration of Repentance of the Church of France” of 30 September 1997, which emphasises the Church of France's historical responsibility towards the Jewish people; the speech given on 31 October 1997 by John Paul II during a colloquy on the “Roots of Anti-Judaism in the Christian Environment”; or, more recently, the book The Jewish People and their Sacred Scriptures in the Christian Bible, published in 2001 by the Pontifical Biblical Commission under the direction of Cardinal Joseph Ratzinger – in its preface, the latter writes with regard to the Shoah that “in the light of what has happened, what ought to emerge now is a new respect for the Jewish interpretation of the Old Testament”. II. RELEVANT DOMESTIC LAW 25. The relevant sections of the Freedom of the Press Act of 29 July 1881 provide as follows: Section 29 “It shall be defamatory to make any statement or allegation of a fact that damages the honour or reputation of the person or body of whom the fact is alleged. The direct publication or reproduction of such a statement or allegation shall be an offence, even if expressed in tentative terms or if made about a person or body not expressly named but identifiable by the terms of the impugned speeches, shouts, threats, written or printed matter, placards or posters. It shall be an insult to use any abusive or contemptuous language or invective not containing an allegation of fact.” Section 32(Prior to amendment by Order no. 2000-916 of 19 September 2000, Article 3(Official Gazette of 22 September 2000, in force from 1 January 2002)) “Defamation of an individual by one of the means set forth in section 23 shall be punishable by a fine of FRF 80,000. Defamation by the same means of a person or group of people on the ground of their origin or their membership or non-membership of a specific ethnic group, nation, race or religion shall be punishable by a term of imprisonment of one year and a fine of FRF 300,000 or one of those penalties only. Where a conviction is secured for one of the offences listed in the preceding paragraph the court may also order: 1. the decision to be posted up or displayed in accordance with Article 131-35 of the Criminal Code.” THE LAW I. ALLEGED VIOLATION OF ARTICLE 10 OF THE CONVENTION 26. The applicant alleged that his conviction under sections 29 and 32, second paragraph, of the Freedom of the Press Act of 29 July 1881 had given rise to a violation of Article 10 of the Convention, the relevant parts of which provide: “1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. ... 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society ... for the protection of the reputation or rights of others ...” A. The parties' submissions 1. The applicant 27. The applicant considered that his conviction for the publication of the impugned article amounted to an unlawful interference with his right to freedom of expression. He disagreed with the interpretation given to his article in the decisions of the domestic courts. In his view, the text criticised the attitude of the Catholic Church as the self-proclaimed “sole keeper of divine truth”. He had subsequently wished to demonstrate that the doctrine of supremacy expressed through the primacy given to the New Covenant, in that its consequence had been the belittling of the Old Covenant passed between God and the Jewish people, had cast opprobrium on the latter group and had contained the seeds of the anti-Semitism without which Auschwitz could not have occurred. The impugned article did not claim that the Catholic Church's doctrine was intrinsically anti-Semitic, but that “scriptural anti-Judaism” had led to anti-Semitism, a not insignificant nuance. Short of resorting to a caricatured and simplistic summary, the applicant could not therefore be accused of having imputed responsibility for the crimes committed at Auschwitz to the Catholic Church. He added that the domestic courts had systematically extrapolated his statements to Christianity as a whole, even though they had referred only to the Catholic Church. 28. The applicant further challenged the claim that, since the impugned article concerned a sensitive religious matter, his freedom of expression could be subjected to stricter control. He considered that the circumstances of his case were different from those analysed by the Court in its judgments in Wingrove v. the United Kingdom (25 November 1996, Reports of Judgments and Decisions 1996‑V) and Otto-Preminger-Institut v. Austria (20 September 1994, Series A no. 295-A). In the instant case, the issue was not one of assessing the form of his article but only the idea, which had been set out in it without animosity or a desire to harm. He stated that, in his capacity as a historian and experienced journalist, he had sought only to contribute to the discussion on the origins of anti-Semitism and the extermination of the Jews, and thus to take part in a public debate. While he accepted that his point of view was not shared by all, including the AGRIF, he nonetheless considered that his article had contributed to an essential debate. While he was aware that his text could have offended or shocked some readers, he nevertheless considered that, having regard to the factors outlined above, he should not have been convicted, as this had not been “necessary in a democratic society”. 29. Finally, the matter of the pecuniary penalties was not the subject matter of these proceedings, which essentially concerned a dispute regarding the very principle of his conviction. 2. The Government 30. The Government did not deny that the applicant's conviction constituted an “interference” in the exercise of his right of freedom of expression, and that that interference was “prescribed by law”, namely sections 29 and 32 of the Freedom of the Press Act of 29 July 1881. 31. Nonetheless, the Government considered that the complaint under Article 10 of the Convention was unfounded. 32. In the first place, the interference in question pursued one of the legitimate aims provided for in paragraph 2 of Article 10 of the Convention, namely the protection of the reputation or rights of others, in that the applicant's conviction was intended to protect Christians from defamation. 33. In particular, the Government submitted that the interference was “necessary in a democratic society”. The applicant's conviction satisfied the criteria of necessity and proportionality which emerged from the Court's case-law, having regard to the margin of appreciation which was to be allowed to the national authorities in this matter. 34. In this connection, the Government considered, firstly, that the grounds on which the domestic courts had based their decisions had been “relevant and sufficient”, since the applicant's conviction had been pronounced following a thorough and careful analysis of the disputed statements. 35. As to the proportionality of the conviction in relation to the legitimate aim pursued, the Government submitted that the applicant's statements had been directed against a large group of people, namely the Christian community, through a national newspaper, and were of a particularly serious nature. In addition, although the Government recognised that, in principle, the States' margin of appreciation was limited in cases concerning freedom of expression with regard to political speech or matters of serious public concern, they nevertheless considered that this same margin of appreciation could prove wider in relation to attacks on religious convictions (they referred, in particular, to Wingrove, cited above). It followed that the applicant should have taken greater care in wording his article. This was all the more so in that the impugned passage did not constitute a value judgment but referred to a fact, the truth of which could be proved or disproved. The article clearly affirmed the responsibility of the Catholic Church, and therefore of its members, in the extermination of the Jews by the Nazi regime. Thus, the applicant had not expressed an opinion but had “laid a charge” against the Christian community. 36. In the alternative, the Government considered that the applicant's statements, if they were to be construed as constituting a value judgment, had gone beyond the stage of participation, however controversial, in a historical debate, and represented a defamatory confusion, consisting in attributing to the Catholic Church part of the responsibility for one of the most heinous crimes in history. 37. Finally, the Government emphasised the limited pecuniary nature of the penalty imposed on the applicant and concluded that the domestic courts had been careful to strike a fair balance between, on the one hand, freedom of expression and, on the other, respect for the rights of others. B. The Court's assessment 38. The impugned conviction undoubtedly amounted to an “interference” in the exercise of the applicant's freedom of expression. Such an interference infringes the Convention if it does not satisfy the requirements of paragraph 2 of Article 10. It should therefore be determined whether it was “prescribed by law”, whether it pursued one or more of the legitimate aims set out in that paragraph and whether it was “necessary in a democratic society” to achieve those aims. 1. “Prescribed by law” 39. It was common ground that the interference was “prescribed by law”, namely by sections 29 and 32, second paragraph, of the Freedom of the Press Act of 29 July 1881, as worded at the material time (see paragraph 25 above). The Court is of the same opinion. 2. Legitimate aim 40. The Court notes that the aim of this interference was to protect a group of persons from defamation on account of their membership of a specific religion, in this case the Christian community. This aim corresponds to that of the protection of “the reputation or rights of others” within the meaning of paragraph 2 of Article 10 of the Convention. It is also fully consonant with the aim of the protections afforded by Article 9 to religious freedom (see, mutatis mutandis, Wingrove, cited above, § 48). 41. Whether or not there was a real need for protection of the Christian community, as asserted by the domestic courts and the Government, or whether, as the applicant argues, the impugned article is confined to criticism of the Catholic Church alone, and of the papal encyclical “The Splendour of Truth”, requires an analysis of the grounds relied on by the domestic authorities to justify the interference and therefore of the requirement that it be “necessary in a democratic society”, examined below. 42. Consequently, the contested interference pursued a legitimate aim in the light of paragraph 2 of Article 10 of the Convention. 3. “Necessary in a democratic society” 43. As the Court has stated on many occasions, freedom of expression constitutes one of the essential foundations of a democratic society and one of the basic conditions for its progress and for each individual's self-fulfilment. Subject to paragraph 2 of Article 10, it is applicable not only to “information” or “ideas” that are favourably received or regarded as inoffensive or as a matter of indifference, but also to those that offend, shock or disturb (see Handyside v. the United Kingdom, 7 December 1976, § 49, Series A no. 24). As paragraph 2 of Article 10 recognises, however, the exercise of that freedom carries with it duties and responsibilities. Amongst them – in the context of religious opinions and beliefs – may legitimately be included an obligation to avoid as far as possible expressions that are gratuitously offensive to others and thus an infringement of their rights, and which therefore do not contribute to any form of public debate capable of furthering progress in human affairs (see, mutatis mutandis, Otto-Preminger-Institut, cited above, § 49; Wingrove, cited above, § 52; and Gündüz v. Turkey, no. 35071/97, § 37, ECHR 2003‑XI). 44. In examining whether restrictions on the rights and freedoms guaranteed by the Convention can be considered “necessary in a democratic society”, the Court has consistently held that the Contracting States enjoy a certain but not unlimited margin of appreciation (see Wingrove, cited above, § 53). The absence of a uniform European conception of the requirements of the protection of the rights of others in relation to attacks on their religious convictions broadens the Contracting States' margin of appreciation when regulating freedom of expression in relation to matters liable to offend intimate personal convictions within the sphere of morals or religion (see Otto‑Preminger-Institut, cited above, § 50; Wingrove, cited above, § 58; and Murphy v. Ireland, no. 44179/98, § 67, ECHR 2003‑IX). It is, in any event, for the European Court to give a final ruling on the restriction's compatibility with the Convention and it will do so by assessing in the circumstances of a particular case, inter alia, whether the interference corresponded to a “pressing social need” and whether it was “proportionate to the legitimate aim pursued” (see, mutatis mutandis, Wingrove, cited above, § 53). 45. In the instant case, the Court notes at the outset, like the Paris Court of Appeal, whose judgment was partially quashed, that the applicant's article essentially accuses the encyclical “The Splendour of Truth” of enshrining among theological principles the so-called doctrine of the “fulfilment” of the Old Covenant in the New, and the superiority of the latter. According to the impugned article, this doctrine contains the seeds of the anti-Semitism which fostered the idea and implementation of the Holocaust. 46. According to the domestic courts, especially the Orléans Court of Appeal, whose judgment was upheld by the Court of Cassation, this amounts to accusing “Catholics and, more generally, Christians of being responsible for the Nazi massacres”. It followed, again according to the Court of Appeal, that Christians were therefore victims of the offence of defamation on account of their religious beliefs. 47. The Court cannot accept these arguments. 48. It notes, firstly, that the action for defamation brought against the applicant was lodged by an association, the General Alliance against Racism and for Respect for the French and Christian Identity. It is not for the Court to comment on whether this group is representative, nor on its task of defending the Catholic Church or Christianity in general. Nor is it the role of the Court, short of taking the place of the domestic courts, to evaluate whether the article in question directly undermined the complainant association or the interests it seeks to defend. 49. The Court further observes that, although the applicant's article criticises a papal encyclical and hence the Pope's position, the analysis it contains cannot be extended to Christianity as a whole, which, as pointed out by the applicant, is made up of various strands, several of which reject papal authority. 50. The Court considers, in particular, that the applicant sought primarily to develop an argument about the scope of a specific doctrine and its possible links with the origins of the Holocaust. In so doing he had made a contribution, which by definition was open to discussion, to a wide-ranging and ongoing debate (see paragraph 24 above), without sparking off any controversy that was gratuitous or detached from the reality of contemporary thought. 51. By considering the detrimental effects of a particular doctrine, the article in question contributed to a discussion of the various possible reasons behind the extermination of the Jews in Europe, a question of indisputable public interest in a democratic society. In such matters, restrictions on freedom of expression are to be strictly construed. Although the issue raised in the present case concerns a doctrine upheld by the Catholic Church, and hence a religious matter, an analysis of the article in question shows that it does not contain attacks on religious beliefs as such, but a view which the applicant wishes to express as a journalist and historian. In that connection, the Court considers it essential in a democratic society that a debate on the causes of acts of particular gravity amounting to crimes against humanity should be able to take place freely (see, mutatis mutandis, Lehideux and Isorni v. France, 23 September 1998, §§ 54-55, Reports 1998‑VII). Furthermore, it has already had occasion to note that “it is an integral part of freedom of expression to seek historical truth”, and that “it is not its role to arbitrate” the underlying historical issues (see Chauvy and Others v. France, no. 64915/01, § 69, ECHR 2004-VI). 52. While the published text, as the applicant himself acknowledges, contains conclusions and phrases which may offend, shock or disturb some people, the Court has reiterated on several occasions that such views do not in themselves preclude the enjoyment of freedom of expression (see, in particular, De Haes and Gijsels v. Belgium, 24 February 1997, § 46, Reports 1997-I). Moreover, the article in question is not “gratuitously offensive” (see Otto‑Preminger-Institut, cited above, § 49), or insulting (contrast İ.A. v. Turkey, no. 42571/98, § 29, ECHR 2005‑VIII), and does not incite disrespect or hatred. Nor does it cast doubt in any way on clearly established historical facts (contrast Garaudy v. France (dec.), no. 65831/01, ECHR 2003‑IX). 53. In these circumstances, the reasons given by the French courts in support of the applicant's conviction cannot be regarded as sufficient to convince the Court that the interference in the exercise of the applicant's right to freedom of expression was “necessary in a democratic society”; in particular, his conviction on a charge of public defamation towards the Christian community did not meet a “pressing social need”. 54. As to the proportionality of the interference in issue to the legitimate aim pursued, the Court reiterates that the nature and severity of the penalties imposed are also factors to be taken into account (see, for example, Pedersen and Baadsgaard v. Denmark [GC], no. 49017/99, § 93, ECHR 2004‑XI). The Court must also exercise caution when the measures taken or penalties imposed by the national authority are such as to dissuade the press from taking part in the discussion of matters of legitimate public interest (see, mutatis mutandis, Jersild v. Denmark, 23 September 1994, § 35, Series A no. 298). 55. In the instant case, the applicant was acquitted in the criminal proceedings. In the civil action, he was ordered to pay FRF 1 in damages to the complainant association and, in particular, to publish a notice of the ruling in a national newspaper at his own expense. While the publication of such a notice does not in principle appear to constitute an excessive restriction on freedom of expression (see Chauvy and Others, cited above, § 78), in the instant case the fact that it mentioned the criminal offence of defamation undoubtedly had a deterrent effect and the sanction thus imposed appears disproportionate in view of the importance and interest of the debate in which the applicant legitimately sought to take part (see paragraphs 50-51 above). 56. Consequently, there has been a violation of Article 10 of the Convention. II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 57. Under Article 41 of the Convention, “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.” 58. The Court notes that the applicant did not submit any claim for just satisfaction within the time allowed after the decision on admissibility. 59. According to its settled case-law (see, in particular, Andrea Corsi v. Italy, no. 42210/98, 4 July 2002; Andrea Corsi v. Italy (revision), no. 42210/98, 2 October 2003; Willekens v. Belgium, no. 50859/99, 24 April 2003; and Mancini v. Italy, no. 44955/98, ECHR 2001-IX), the Court does not make any award by way of just satisfaction where quantified claims and the relevant documentation have not been submitted within the time-limit fixed for that purpose by Rule 60 § 1 of the Rules of Court. 60. In these circumstances, the Court considers that the applicant has failed to comply with his obligations under Rule 60. As no valid claim for just satisfaction has been submitted, the Court considers that no award should be made in this respect. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Holds that there has been a violation of Article 10 of the Convention; 2. Holds that it is not necessary to apply Article 41 of the Convention. Done in French, and notified in writing on 31 January 2006, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Sally Dollé András Baka Registrar President

COURT OF APPEAL FOR ONTARIO CITATION: Hamilton (City) v. The Equitable Trust Company, 2013 ONCA 143 DATE: 20130311 DOCKET: C54762 Laskin, Blair and Epstein JJ.A. BETWEEN City of Hamilton Applicant (Appellant) and The Equitable Trust Company Respondent (Respondent) Martin G. Banach and Elissa Banach for the appellant Byrdena M. MacNeil for the respondent Heard: October 3, 2012 On appeal from the order of Justice James A. Ramsay of the Superior Court of Justice dated December 5, 2011, with reasons reported at 2011 ONSC 7149. R.A. Blair J.A.: Overview [1] An owner/landlord defaulted in its obligation to pay for the supply of natural gas to its tenants in a residential apartment complex in Hamilton. [2] As it was entitled to do under its Vital Services By-law , the City of Hamilton stepped in and took over payment to ensure the delivery of gas to the residents.  As it was also entitled to do under the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “Act”), the City sought to enforce its claim for recovery of those payments in two ways: it registered a lien against the property (s. 219), and it directed the tenants to pay their rent to the City instead of to the owner/landlord (s. 221). [3] The property was ultimately sold by the first mortgagee under power of sale to a bona fide purchaser for value, but the proceeds of sale were insufficient to satisfy the City’s claim. [4] The issue on this appeal is whether the City’s right under the Act to direct the tenants to pay their rent to it instead of the owner/landlord, survives the sale of the lands.  In my view, it does not, and for the reasons that follow I would allow the appeal. Facts [5] In July 2008, gas service was discontinued at 355 Melvin Ave., Hamilton, Ontario, an apartment building consisting of some 60 residential units.  The owner/landlord was in financial trouble and had defaulted on the required payments to Union Gas. [6] This failure to provide what constitutes a “vital service” to tenants triggered the provisions of Part XIII of the Act and of the City’s Vital Services By-law (by-law no. 05-322) . In the event that a landlord fails to provide such services, they enable a municipality to arrange for the vital services to be provided and to recuperate the costs of doing so. More specifically, the City may enforce its right to reimbursement both by way of a notice of lien registered against the property and by directing the tenants to pay their rents directly to the municipality instead of to the landlord. [7] The City of Hamilton arranged for Union Gas to resume the gas services at 355 Melvin Ave. and paid for them.  After paying for a number of months, the City filed a notice of lien against the property in early March 2009, and in late March gave the tenants notice to pay their rents to it, which the tenants did effective April 1, 2009. [8] At the time the default occurred, the property was subject to a first charge in favour of the appellant, The Equitable Trust Company.  Equitable Trust also had a first registered assignment of rents, but had not exercised its rights under that assignment.  In June 2009, Equitable Trust exercised its power of sale rights and the property was sold to a bona fide purchaser for value. [9] As of June 20, 2009, the City had a shortfall of approximately $80,000 between the rents it had collected as reimbursement for payment of the gas services and the amount it had paid to Union Gas.  Recognizing that Equitable Trust as first chargee had priority over its lien, and that the proceeds of sale would be insufficient to enable it to recover in full, the City took the position that its statutory right to collect the rents survived the closing of any sale and that it was entitled to continue collecting rent from the tenants until its claim was satisfied in full. [10] Equitable Trust did not agree with this position.  To facilitate the sale, however, the parties responsibly entered into an agreement.  The agreement was that the sale would go through and that the City would not continue to assert its claim for the payment of rents following the sale to the new owner.  Either of the parties would be entitled to apply to the court for a determination of the City’s claim to continue to do so; if the City succeeded, it would be paid the outstanding balance by Equitable Trust. [11] The City brought such an application, and Ramsay J. ruled in its favour.  Equitable Trust now appeals, but Equitable Trust is not truly the party interested in the legal issue to be determined.  It is an interested party, of course, but only because of the agreement. The legal issue to be determined – whether the City’s statutory right to collect rents to defray the expenses incurred in providing the vital services on the previous owner/landlord’s default – is really between the City and the new owner.  Because of the agreement, however, the new owner is not a party to the proceedings. The Statutory Framework [12] Section 216(1)(a) of the Act empowers a municipality to pass by-laws “requiring every landlord to provide adequate and suitable vital services to each of the landlord’s rental units”.  The City of Hamilton’s Vital Services By-Law is such a by-law.  There is no dispute that the landlord breached this by-law when gas services at 355 Melvin Ave. were discontinued for lack of payment. [13] As noted above, when such an event occurs, a municipality may take steps to ensure the vital services are provided, pay for them, and protect its right to reimbursement for those payments by filing a notice of lien against the property and by directing the tenants of the property to pay their rents to the City, instead of to the landlord.  The relevant statutory framework governing this procedure, for purposes of this proceeding, is found in Part XIII of the Act: 219.  (1)  If a landlord does not provide a vital service for a rental unit in accordance with a vital services by-law, the local municipality may arrange for the service to be provided. (2)  The amount spent by the local municipality under subsection (1) plus an administrative fee of 10 per cent of that amount shall, on registration of a notice of lien in the appropriate land registry office, be a lien in favour of the local municipality against the property at which the vital service is provided. (3)  Subsection 349 (3) of the Municipal Act, 2001 and subsection 314 (3) of the City of Toronto Act, 2006 do not apply with respect to the amount spent and the fee, and no special lien is created under either subsection. ... 221.  (1)  If the local municipality has arranged for a vital service to be provided to a rental unit, an official named in the vital services by-law may direct a tenant to pay any or all of the rent for the rental unit to the local municipality. (2)  Payment by a tenant under subsection (1) shall be deemed not to constitute a default in the payment of rent due under a tenancy agreement or a default in the tenant’s obligations for the purposes of this Act. 222.  (1)  The local municipality shall apply the rent received from a tenant to reduce the amount that it spent to provide the vital service and the related administrative fee. (2)  The local municipality shall provide the person otherwise entitled to receive the rent with an accounting of the rents received for each individual rental unit and shall pay to that person any amount remaining after the rent is applied in accordance with subsection (1). [14] The “special lien” provision of s. 349(3) of the Municipal Act, 2001 , S.O. 2001, c. 25, which is specifically excluded by s. 219(3) of the Act, is also relevant: 349 (3 ) Taxes are a special lien on the land in priority to every claim, privilege, lien or encumbrance of every person except the Crown, and the lien and its priority are not lost or impaired by any neglect, omission or error of the municipality or its agents or through taking no action to register a tax arrears certificate. Issues [15] The only issue that needs to be determined on this appeal is whether the City’s right, under s. 221(1) of the Act, to direct the tenants to pay their rent to it survives the sale of the premises to a bona fide purchaser for value and entitles the City to continue to collect those rents until it has been reimbursed in full.  As noted above, in the legal sense, this issue is really a matter between the City and the new owner. [16] Equitable Trust advanced arguments about whether the City’s right to collect rents takes priority over Equitable Trust’s interest as first chargee.  I do not think this question is properly in play here, however.  Any issues between Equitable Trust, as first chargee, and the City, as a subsequent encumbrancer, are resolved based on their priority rights in relation to the proceeds of sale.  Equitable Trust’s rights in this regard prevail because it registered first and the City’s right to register a lien does not create a “special lien” capable of defeating a previously registered mortgage.  The City conceded as much in a letter to Equitable Trust dated April 22, 2009: This will confirm that the lien created under section 219 of the Residential Tenancies Act, 2006 … and our Vital Services By-Law does not have special lien status as provided for in section 349(3) of the Municipal Act, so it therefore does not have priority over a mortgage registered on title prior to the lien.  As I understand Equitable Trust’s mortgage is previously registered, our lien is subsequent to the priority of your client’s mortgage on this property. [17] In its factum, Equitable Trust also raised a second argument in this context, claiming that its first registered Notice of Assignment of Rents gave it priority over the City’s claim to receive those rents.  This argument cannot apply to post-sale rents since the Notice of Assignment of Rents was deleted from the register upon the sale to the new owner, as was the City’s lien.  To the extent that the argument relates to the rent collected by the City prior to the sale, the application judge ruled that it was “not part of the application.”  Equitable Trust had not brought a counter-application putting the issue properly before the court, but had simply raised the issue in its responding material.  In oral argument before this Court, Mr. Banach advised that there was no complaint about the City’s collection of the rents up to the point of sale. In any event, I see no reason to interfere with the application judge’s decision in that regard. [18] Finally, Equitable Trust raised an estoppel argument, which was rejected by the application judge.  The argument is based on the premise that Equitable Trust abandoned an appeal contesting the quantum of the lien, and that it had done so substantially on the basis of the foregoing letter.  Equitable Trust submitted that the City had represented that if it abandoned its appeal, the City would not continue to collect rent after the sale of the property.  The application judge’s finding that the City did nothing that amounted to a representation, express or implied, is supported on the record, and I see no basis for interfering with it.  Therefore, I would not give effect to the estoppel argument either. [19] I turn, then, to the question of whether the City’s right to collect rent to recover its costs of vital services survives the sale of the property to a bona fide purchaser for value. Analysis [20] The City does not rely on its lien to give any kind of priority effect to its right to collect rents, recognizing that the lien claim is subsequent to the Equitable Trust charge and that it is extinguished by the transfer to the new owner.  Ms. McNeil argues on the City’s behalf, instead, that the lien and the right to collect rents are separate and different remedies. The City is entitled to rely upon the latter despite the sale because the legislature did not say the right terminates on a sale of the property, she submits.  At the end of the day, the new owner simply takes subject to the City’s Vital Services By-law : caveat emptor. [21] I do not agree. [22] However the dispute is characterized, it involves competing claims to an interest arising out of the newly-transferred lands – the rental stream flowing from them.  That interest is a real property right in the hands of the new owner.  The dispute is, therefore, a priority dispute relating to an interest in the land between the City and the new owner.  Calling it something else does not change that reality. [23] For the following reasons, I do not accept that the language of s. 221(1) of the Act – viewed in context, and having regard to the purpose and scheme of the Act and of Part XIII of the Act – gives the City’s right to have the rents directed to it a priority over the new owner’s interest in the land.  Claims to an interest touching these lands are subject to, and governed by, the land titles regime in Ontario.  Nothing in the language of s. 221(1), or in the scheme and purpose of the Act, suggests that the legislature intended to oust this regime.  Indeed, they suggest the contrary. [24] The fundamental principle of statutory interpretation today is that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature: see Rizzo & Rizzo Shoes Ltd. (Re) , [1998] 1 S.C.R. 27, at para. 21; R v. Gladue , [1999] 1 S.C.R. 688, at para. 25; and Bell ExpressVu Limited Partnership v. Rex , [2002] 2 S.C.R. 559, at para. 26.  Respectfully, the interpretation adopted by the application judge is not consistent with that principle. [25] I agree with the application judge that the purpose of the Act is generally to protect tenants and, in particular, that the purpose of Part XIII is to shield residential tenants from disruptions of vital services by encouraging municipalities to step up and “bridge the gap” when an owner or landlord defaults in its obligation to provide them.  I also agree that Part XIII gives a municipality two distinct and independent means of recovering the expenses incurred by the municipality when it does intervene in such circumstances: (i) a lien against the lands in question (s. 219); and (ii) the right to collect rents from the tenants to defray those expenses (s. 221(1)).  What I disagree with is the notion that the s. 221(1) remedy was intended to create (by whatever name it is called) a type of super-priority claim to an interest in land, when the legislature expressly dealt with a municipality’s land-attached rights in a much less sweeping fashion in s. 219.  Section 221(1) is a statutory collection device; it is not a priority device. [26] Section 219 demonstrates that the legislature intended to provide municipalities with a claim for recovery that attached to the land itself. However, in providing this remedy, the legislature expressly declined to give the s. 219 lien the super-priority referred to above (or any priority, save for priority of registration). [27] Subsections 219(2) and (3) make this clear by stating that the municipality’s lien is not a “special” lien and that “subsection 349(3) of the Municipal Act, 2001 and subsection 314(3) of the City of Toronto Act, 2006” do not apply. The Municipal Act and City of Toronto Act provisions relate to the recovery of municipal taxes and are examples of what the legislature does when it intends to create a super-priority claim over a subsequent purchaser’s interest in the land.  For instance, s. 349(3) of the Municipal Act stipulates the following: Taxes are a special lien on the land in priority to every claim , privilege, lien or encumbrance of every person except the Crown, and the lien and its priority are not lost or impaired by any neglect, omission or error of the municipality or its agents or through taking no action to register a tax arrears certificate .  [Emphasis added.] [28] That taxes, as a special lien or claim against the land, survive a transfer of the land is reinforced by s. 44(1) of the Land Titles Act , R.S.O. 1990, c. L.5. Section 44(1) provides that registered land remains liable to certain easements and other rights that are deemed not to be encumbrances.  The first of these is municipal taxes. [29] Without explicit language from the legislature, courts have refused to interpret a provision so as to give municipalities a claim against the land with tax-like super priority. Some statutory provisions deem amounts owing to municipalities for expenses incurred due to a landowner’s failure to conform to municipal requirements to be taxes . Courts have held that this deeming is sufficient to create the same priority as property taxes: see e.g., Re Scarbim Realty Ltd. and City of Toronto (1978), 21 O.R. (2d) 558 (H.C.).  On the other hand, where the legislature has been less clear – providing only that the expenses may be recovered in the same fashion as taxes – courts have held that such provisions create only a collection mechanism, without a property tax priority: see Guaranty Trust Company of Canada v. Quality Steels (Canada) Limited et al. , [1953] O.R. 434 (H.C.), at pp. 443-447 (amounts owing for public utilities supplied); Canadian Imperial Bank of Commerce v. City of Burlington (1984), 49 O.R. (2d) 265 (H.C.) (costs of demolition of a building not conforming to the Building Code); CIBC Mortgage Corp. v. Belle River (Town) (1993), 36 R.P.R. (2D) 133 (Ont. C.J. Gen. Div.), at para. 9 (costs of demolition); and Jones v. Gomez et. al. (1978), 20 O.R. (2d) 89 (H.C.) (claim by a municipality to recover a loan made pursuant to the Housing Development Act ). [30] Thus, when the legislature has intended to give a municipality a super priority that overrides land claim interests and survives the transfer of the property to a bona fide purchaser for value, it has done so expressly.  Here, however, the legislature has expressly disavowed such an intention. [31] The City argues, nonetheless, that its s. 221(1) right overrides the new owner’s interest in the rents.  The argument may be summarized succinctly as follows:  Nothing in the Act says that the statutory collection device does not override the purchaser’s interest or continue until the municipality has been reimbursed in full; therefore, it does .  This is confirmed by the effect of ss. 222(1) and (2), which stipulate that after applying the rent received “to reduce the amount [the municipality] spent to provide the vital service”, the municipality is to account to “the person otherwise entitled to receive the rent” and pay over “any amount remaining”.  Since a new owner would be a “person otherwise entitled to receive the rent”, the City interprets these provisions as entitling it to recover its expenses fully, regardless of a transfer of the lands by the defaulting owner – or, in this case, by the defaulting owner’s first chargee under power of sale – to a bona fide purchaser for value. [32] The argument has some appeal at first blush.  It is not difficult to fit a new owner into the expression “[a] person otherwise entitled to receive the rent”.  However, I do not think that a mechanism for returning the surplus collected by the municipality to the owner/landlord or someone else otherwise entitled to the rents (e.g., a mortgagee, assignee, or garnishor standing behind the municipality) can be interpreted to give the City a statutory priority not otherwise clearly given. [33] As explained above, that interpretation runs up squarely against the land titles regime governing claims to interests in transferred lands in this province. Moreover, it is inconsistent with the scheme of Part XIII of the Act, which expressly declines to give the City’s claim that sort of priority.  It is an interpretation that grants a municipality by the back door a remedy the legislature specifically declined to grant it by the front door, turning the otherwise applicable land title scheme of priorities on its head in the process. [34] In addition to the foregoing considerations, it would be contrary to another well-entrenched principle of statutory interpretation to give effect to the City’s submissions.  The legislature is presumed not to intend to abolish, limit, or otherwise interfere with the established common law or statutory rights, including property rights, in the absence of explicit statutory language that it intends to do so: see Parry Sound (District) Social Services Administration Board v. Ontario Public Services Employees Union , [2003] 2 S.C.R. 157, at para. 39; Morguard Properties Ltd. et. al. v. City of Winnipeg , [1983] 2 S.C.R. 493, at pp. 508-511; Crystalline Investments Ltd. v. Domgroup Ltd. , 2004 SCC 3, [2004] 1 S.C.R. 60, at para. 43; and 80 Mornelle Properties Inc. v. Mala Properties Ltd. , 2010 ONCA 850, 99 R.P.R. (4th) 21, at para. 42.  Estey J. expressed the principle in this fashion, in Morguard at p. 509: In more modern terminology the courts require that, in order to adversely affect a citizen’s right, whether as a taxpayer or otherwise, the Legislature must do so expressly.  Truncation of such rights may be legislatively unintended or even accidental, but the courts must look for express language in the statute before concluding that these rights have been reduced.  This principle of construction becomes even more important and more generally operative in modern times because the Legislature is guided and assisted by a well-staffed and ordinarily very articulate Executive.  The resources at hand in the preparation and enactment of legislation are such that a court must be slow to presume oversight or inarticulate intentions when the rights of the citizen are involved.  The Legislature has complete control of the process of legislation, and when it has not for any reason clearly expressed itself, it has all the resources available to correct that inadequacy of expression.  This is more true today than ever before in our history of parliamentary rule. [35] Here, the bona fide purchaser for value is a citizen in exactly the position contemplated by Estey J.  To interpret s. 221(1) of the Act in a fashion that would permit the City to reach through the transfer directly interferes with the new owner’s proprietary interest in the rents.  Respectfully, I can see no clear and unambiguous language in s. 221(1) or in Part XIII of the Act that would permit us to do so. [36] Finally, the City submits that the provisions of s. 3(4) of the Act suggests otherwise.  That section states that, if the provisions of the Act conflict with a provision of another Act, the provisions of the Act apply.  I do not think this assists the City, however.  First, I do not think there is a conflict between s. 221(1) and the provisions of the Land Titles Act .  The Land Titles Act does not prevent the s. 221(1) collection device from operating.  Its registration regime simply caps that recovery at the point of sale to a bona fide purchaser for value.  Secondly, I would be reluctant to interpret the general language of s. 3(4) as sufficient to oust the prevailing land registry regime in Ontario, particularly as I view the legislature’s express decision to limit a municipality’s direct claim respecting the land as the predominant indicator of intention. [37] While the foregoing is sufficient to dispose of the appeal, in my view, a comparison of the type of legal right created by s. 221(1) and the legal right of the new owner in the rents is instructive and also reinforces a restricted interpretation of that provision:  The new owner’s claim to rents is an interest in the lands.  A municipality’s remedy under s. 221(1) is not. [38] Rent has long been viewed as an incorporeal interest in land because of its close affinity with land, being payable to an owner/landlord as an incident of ownership of the land: see Anne Warner La Forest, Anger & Honsberger Law of Real Property , loose-leaf (consulted on 3 February 2013), (Toronto, Ontario: Canada Law Book, 2012), at pp. 1-6 to 1-8, 7-24, and Bruce Ziff, Principles of Property Law , 5th ed. (Toronto: Thomson Reuters Canada Ltd., 2010), at pp. 74-77, for a discussion of the classifications of real and personal property and other rights, including the incidents of real property. [39] The new owner’s proprietary right to rents is therefore a “real property” right flowing from an interest in the lands.  But the same cannot be said of the municipality’s right to recover rents under s. 221(1).  The s. 221(1) right is more akin to an assignment of rents – a statutory assignment as it were – or to rights of garnishment, in my view.  Neither gives rise to an interest in land. [40] An assignee of the landlord’s right to collect rent does not have an interest in the land that is the source of the rental flow.  That is because an assignee has no right to the reversionary interest in the land, and therefore no right to recover the land should the tenant default: see Canada Trustco Mortgage Company v. Skoretz (1983), 45 A.R. 18 (Q.B.), at paras. 34-35; Lifescan Canada Ltd. v. Hogg (1999), 44 O.R. (3d) 593 (S.C.), at pp. 596-97; Northland Bank v. Van de Geer and Bank of Montreal (1986), 75 A.R. 201 (C.A.), at para. 14; and Finch v. Gilray (1889), 16 O.A.R. 484 (C.A.), at p. 493, per Osler J.A. A municipality’s right to direct tenants to pay rent under s. 221(1) is not supported by any underlying property interest either.  The municipality does not become the landlord upon exercising its right (and, in all likelihood, does not wish to become one).  It has no reversionary right in the property and no right to seize a tenant’s leasehold interest if the tenant refuses to pay. [41] The City’s s. 221(1) remedy might also be characterized as akin to a right of garnishment.  It is a statutory mechanism requiring a third party (a tenant) who is indebted to the principal debtor (the defaulting owner/landlord) to turn over to the creditor (the City) property of the principal debtor held by the third party (rent): see Black’s Law Dictionary , 9th ed., sub verbo “garnishment”.  In Alberta (Treasury Branches) v. M.N.R.; Toronto-Dominion Bank v. M.N.R. , [1996] 1 S.C.R. 963, at para. 5, the Supreme Court of Canada held that a similar right of the Minister of National Revenue to divert payments due to a defaulting taxpayer to it was a form of statutory garnishment.  Like an assignment, however, the right to garnish rents does not carry with it a right to attach the underlying leasehold interest of the garnishee, nor does it continue once the principal debtor no longer owns the property: Lifescan Canada , at p. 596-97; and FCA Sales Ltd. v. Niagara Falls Big Brothers Big Sisters Assn. Inc. (2004), 40 C.P.C. (6th) 24 (Ont. Div. Ct.), at para. 19.  In the same way, once a sale is completed to a bona fide purchaser for value, the third-party tenant is no longer indebted to the principal debtor. Accordingly, the rents generated by the property, no longer property of the principal debtor, become out of reach of the creditor. [42] No matter how it is viewed, the City is attempting to claim priority to the rental flow from the new owner’s property in order to satisfy a claim against the prior owner/landlord.  But the defaulting owner/landlord no longer has any claim to those proceeds following the sale.  The tenants do not owe the defaulting owner/landlord the post-sale rents.  They are the property of the new owner.  To adopt the City’s submission would be to adopt an interpretation of the Act that interferes with those rights.  Thus, in my opinion, like an assignment of rents or a right to garnishee a debt, a municipality’s “right” under s. 221(1) is not an incorporeal interest that runs with the land, whatever else that right may be. [43] Even if were, however, it would be an unregistered claim to an interest in land.  A bona fide purchaser for value takes the land free and clear of all such claims, in the absence of fraud or of actual notice amounting to fraud:  see Anger & Honsberger , at pp. 30-18 to 30-22; Land Titles Act, s. 87; and Farah v. Glen Lake Mining Co. (1908), 17 O.L.R. 1 (C.A.), at pp. 19-20. [1] There is no suggestion of fraud on the part of the new owner here, nor is there anything in the record to indicate that the new owner had actual notice that the City had exercised its s. 221(1) right (as opposed to claiming its lien).  An unregistered claim to an interest in the land would not help the City here, then. [44] Characterizing the City’s s. 221(1) remedy as either some sort of “personal property” claim or as a stand-alone creature of statute, does not advance the City’s position either.  A claim to personal property, not registered against the land, cannot trump the interest a bona fide purchaser for value acquires in the real property.  And, for the reasons I have explained above, the language of the section – assuming it provides a stand-alone remedy – is not sufficiently explicit to create a statutory, super-priority scheme that would deprive the new owner’s real property interests in the transferred lands. [45] That interpretation is reinforced by the underlying public and commercial contexts, as well. [46] “Public interest” concerns push municipalities to intervene where an owner/landlord has defaulted in providing vital services to tenants – as they should.  At the same time, a municipality’s right to intervene under s. 219(1) is not obligatory, but discretionary.  Is there a public interest concern that a municipality’s inability to ensure complete recovery of the public funds utilized to “bridge the gap” may act as a disincentive to intervene?  Perhaps.  But communities work when political leaders and legislatures respond to their needs, and other factors have to be weighed in crafting a measured response to those needs.  Here, the legislature has chosen to respond to those needs by not providing municipalities with the ultimate assurance of recovery. [47] That resolution reflects a balancing of the other side of the equation – the protection of private proprietary rights.  There is social value in that as well.  Shifting the burden of the previous owner/landlord’s default and of the municipality’s intervention to a new owner/landlord would lead to significant problems in the financing market.  Potential buyers would have no way of knowing whether a municipality has a bridging the gap claim (apart from any lien that may have been registered).  Nor would potential mortgagees.  To require them to assume ultimate liability for any shortfall would create uncertainty in the financing market, in addition to being contrary to the notice regime so important to land transfer issues. [48] If investors are reluctant to invest, and lenders are reluctant to lend against properties in distress, because there is insecurity and lack of finality as to their prospective interests in the land, that reluctance does not help either the municipality (which will continue to have to “bridge the gap” during the period of uncertainty) or the tenants (who will remain in a state of disruption until more financially stable ownership is in place).  Such a result is not consistent with the purposes and objects of Part XIII or of the Act as a whole, in my opinion. Conclusion and Disposition [49] The City has no claim against the new owner personally.  The City has no claim against the tenants personally.  It only has the right, pursuant to s. 222(1) of the Act, to divert the tenant’s rental payments to it in order to “reduce the amount it spent to provide the vital service” that the defaulting previous owner/landlord failed to provide.  However, with the sale of the property, the previous owner/landlord lost the right to the rental income.  By whatever name it is called, the claim to deprive the new owner of that right is to say – in the absence of some personal claim against the new owner – that the purchased lands are encumbered by the City’s statutory claim.  That is no different than saying the City has a prior claim to a right or interest in the land superior to that of anyone else, even a subsequent purchaser who takes the property on the basis of a clean registered title. [50] On a fair reading of the Act and the provisions of Part XIII, the language of s. 221(1) cannot be read as expressing such an intention.  Indeed, as I have noted, the contrary is the case. [51] I would therefore allow the appeal, set aside the order below, and declare that the City’s remedy under s. 221(1) of the Act to direct that rents owing by tenants at the apartment building known municipally as 355 Melvin Ave., Hamilton, be paid to the City, ceased upon registration of the transfer of those premises to the new owner.  It follows, pursuant to the agreement entered into between the City and Equitable Trust, that Equitable Trust is not required to pay to the City the amount of the shortfall unrecovered by the City from its payment for vital services. [52] The parties have agreed that there should be no costs of the appeal. “R.A. Blair J.A.” “I agree John Laskin J.A.” “I agree Gloria J. Epstein J.A.” Released: March 11, 2013 [1] While the Land Titles Act recognizes the existence of some unregistered interests, none of those are present in this appeal.

MR JUSTICE LLOYD: Mr Rees owns a property whose address is 14 Hastings Street, Plymouth. With his wife, who has died since the judgment below, he rented it first, and then bought it in 1983. At that time it was a terraced property, adjoined by another on each side. In February 1990, however, the property on one side, known as number 14A, was demolished. That is the origin of the litigation in which this appeal is brought. Mr Rees claims to have suffered damage to his property as a result of the demolition. With his wife he sued Mr Skerrett, the First Defendant, who was the owner at the time of the demolition, and also Mr Solomon, who later became the owner, of 14A. In the county court they satisfied His Honour Judge Overend that they were entitled to a right of support from 14A, but not that they had suffered any damage as a result of the withdrawal of that support, nor that Mr Skerrett was liable in either negligence or nuisance apart from the withdrawal of support. They were awarded part of their costs against each Defendant, but no damages. They brought this appeal against both Defendants, but as against the Second Defendant, Mr Solomon, the appeal has been compromised. Thus we are now only concerned with Mr Rees as Appellant and Mr Skerrett as Respondent. Mr Skerrett is a solicitor. He served a decidedly pugnacious Defence and Counterclaim, but he appeared at the trial only to ask for an adjournment on the grounds, we are told, of ill health. The judge refused that application and Mr Skerrett then withdrew and took no further part in the proceedings. He has not appeared nor been represented on the appeal. The judge's conclusion that a right of support existed in favour of 14 over 14A has not been challenged. The questions on the appeal are whether the judge was right to hold that none of the damage which has been suffered is attributable to the withdrawal of the support to which Mr Rees has a legal right, and whether he was right to hold that Mr Skerrett was not otherwise liable in negligence or nuisance for that damage. The facts The precise circumstances in which the two adjoining properties were built are not clear and do not matter. Both had existed for around a hundred years by 1990. At the front, facing Hastings Street, number 14 is a 3 storey building (though a fourth floor has now been created out of the loft) as was 14A, effectively of the same height as 14. At the back, each of the two properties extended further back than some other houses in the terrace. Number 14 has a 2 storey extension at the back, with a conservatory on top. Number 14A had a substantial 3 storey building at the back, though the top storey was of wood. The dividing wall between the two properties was one common wall, though it had not been the subject of any party wall award or agreement. It seems to have been assumed that half of the wall belonged to each property. When the demolition took place the whole of the common wall was left in place. Mr Skerrett bought 14A on 16 January 1990. A dangerous structure notice had been served by the local authority, and planning permission seems already to have been granted for a new building, consisting of flats, to be built on the site. On 18 January 1990 Plymouth City Council served a demolition order under the Housing Act 1957, together with a notice to the owner under the Building Act 1984. The latter notice required him, within 30 days after starting the demolition work, among other things, to shore up any adjoining building, and to weatherproof any surfaces of any adjacent building which were exposed by the demolition. The demolition work was carried out during February 1990. The work seems to have been done in a thoroughly inconsiderate and unsatisfactory way, and the site was left in a poor state. Only token gestures were made as regards support for number 14 and weatherproofing the exposed wall. Nothing was done as regards implementing the planning permission for a new building, so the flank wall of number 14 remained exposed and, in effect, unsupported. Mr Rees later obtained a visual improvement grant from the local authority with which he was able to have some rendering done to the flank wall. This makes it look better, and may have had some beneficial effect, but Mr Rees' expert, Mr Cooper, did not consider that the work was very effective. Mr Skerrett sold 14A to a company which later went into liquidation. In 1994 the mortgagees sold 14A to Mr Solomon, the Second Defendant. This action was started in 1995. In April 1996 Mr Rees got an expert report from a structural engineer, Mr Cooper. According to this report, the flank wall had suffered considerable damp penetration since the demolition of 14A, directly attributable to the inadequate precautions taken at the time of the demolition. Mr Cooper expressed the opinion that there had been some structural movement since the demolition, that the wall was by then not adequately supported, as it had been before the demolition, and that a scheme of remedial works was needed in order to redress the fact that the flank wall was not properly restrained as regards lateral movement, and to deal with, and prevent for the future, damp penetration. With this advice, Mr Rees amended his Particulars of Claim. Mr Skerrett had served a Defence and Counterclaim in October 1995. Apart from matters which are not now in issue, he denied negligence in the demolition and denied that number 14 was left unsupported or exposed. Mr Rees served a Reply and Defence to Counterclaim, but I do not need to mention any particular point from that pleading. At the trial, evidence was given by Mr Cooper, and by another expert, Mr Hancock, for the Second Defendant. The judge preferred Mr Cooper's evidence where they were in conflict, but Counsel for the Second Defendant was able to cross-examine Mr Cooper in a way which led the judge to say this: "Crack damage was observed by Mr Cooper. His view was that this damage was probably more likely to have been caused by the effect of wind, in particular suction to part of the gable wall, rather than by failure to provide lateral support. He agreed that the lateral support provided was minimal." I will set out some of the material from Mr Cooper's second report which provided the basis for this, and which enables the point to be understood somewhat more fully. But before I do so, I should quote from Mr Cooper's first report as to the condition of the property, and in particular the flank wall. His opinion can be seen from three paragraphs, as follows: "7.2 In addition to damp penetration problems it is also clear that the flank/gable wall has undergone some structural movement since the demolition of the adjoining property. The writer's investigation has revealed that the wall is effectively free-standing with no adequate restraint from any of the intermediate floors or the roof structure over the entire terraced section of the property. 7.3 Bearing in mind the substantial window and door openings in the front elevation immediately adjacent to the flank wall and the even larger opening in the rear elevation wall of the terraced section of the property which permits the passage of the staircase, the wall is effectively a 12m high by 11m long free-standing panel of masonry of approximately 550mm thickness. BS5628: Part 1: 1978, being the relevant British Standard Design Code of Practice for the masonry walls, in clause 36.3 limits the height of a free-standing wall to 12 times the thickness. The height of this wall is almost 22 times the thickness and without any lateral restraint it can only be described as unstable." "7.5 Any competent engineer asked to advise on the demolition works is likely to have recommended that buttressing be provided to the wall prior to the demolition works being carried out and that this buttressing should have extended over the entire height of the building and been maintained in position until such time as alternative measures such as the redevelopment of the site were complete. Likewise the design for any redevelopment should have taken full account of the need to provide restraint to the existing wall and the new structure should have been designed to carry the loads required to ensure its stability." His second report, dated 25 June 1997, was written in answer to a report from a Mr Bird, I assume prepared on behalf of the First Defendant, which we do not have, and whom the judge did not see. The contents of that report are therefore a matter of inference from Mr Cooper's comments. This is somewhat unsatisfactory, since we can understand the context only from what Mr Cooper does say by way of comment on, and prompted by, the other report. Clearly Mr Bird had commented on wind loading on the wall, and had done so in ways which suggested that this was not a serious factor. On this aspect, Mr Cooper said that Mr Bird had applied inappropriate factors, and that "the wind loading to be applied to the wall is significantly greater than Mr Bird has assumed". He went on: "4.2.3 Furthermore, the wall is effectively partially buttressed against positive wind pressures on the party wall in that the floors will restrain movement in the inward direction. The critical case for wind loading is therefore the suction case where the wind attempts to pull the wall on to the site of 14A Hastings Street. Mr Bird has given no consideration whatsoever to this load case nor to the additional effect of internal positive pressures which may occur within the building of number 14 and worsen the situation. Consequently the bending movement calculated as existing within the wall has been greatly underestimated." "4.2.11 Mr Bird then proceeds into pure fantasy choosing to ignore totally the advice and recommendations of British Standard CP3: Chapter 5: Part 2: 1972 being the code of basic data for the design of buildings, Chapter 5 relating to loading and Part 2 specifically to wind loads. He suggests that eddies will form resulting in zones of suction and pressure if the wind were to blow away from the gable wall. He further suggests that it is not possible to ascertain the loading on to the wall in this circumstance other than by the production of a detailed model analysis using coloured smoke traces in a wind tunnel. 4.2.12 This is absurd as such model analyses have been undertaken and a great wealth of information is available to the designer to accurately predict the forces which might be applied to the gable. This wealth of information indicates that there is undoubtedly an overall suction on the gable wall in the event of the wind blowing away from the wall. Moreover a far more severe loading case would occur when the wind blows parallel to the gable-wall, in either direction. The same wealth of information indicates that in this case the suction will be 2 to 2.5 times as much. 4.2.13 Incidentally in comparison with the positive pressure due to wind blowing on the face, the value of the suction in the circumstances of wind blowing parallel to the face is likely to be in the regions of 0.7 to 1.0 times the positive pressure. This is both significant and critical." "5.1 The primary reason for concern over the stability of the party wall to number 14 Hastings Street after the demolition of the property known as 14A Hastings Street is that this wall has now become subjected to wind load from which it would have been sheltered previously. Additionally the structure of 14A would also have provided lateral restraint to the wall with the floors arresting any outward movement of the wall which might occur." Thus, Mr Cooper's opinion, taking the two reports together, was that the wall was unstable, as a result of the withdrawal of the lateral support which 14A formerly provided, and that, because of its lack of stability, when the wind blows either along the front of the terrace, from the direction of number 14 and past the empty site of the former 14A, or in either direction along the flank wall, it is exposed to, and has suffered damage through, structural movement and therefore cracking which is distinct from movement attributable to the sheer weight of the roof and the upper parts of the structure bearing down on the lower parts and forcing the unsupported and unrestrained wall outwards. The judge found that the crack damage was more likely to be attributable to suction damage by the wind. He found that 14A had provided some (though minimal) lateral support to 14, though not to the conservatory, and that an easement of support was established. He found that 14A had protected 14 from the weather for as long as it had provided support. He said that there had been a breach of the easement of support by reason of the demolition of 14A but that damage had not yet been suffered as a result of the withdrawal of the support. If and when damage was suffered in future an action would lie: see Midland Bank plc v. Bardgrove Property Services Ltd (1992) 65 P&CR 153. But he refused to accept that the damage already suffered by 14 was attributable to the withdrawal of support, and he also refused to accept that Mr Skerrett had been under a common law duty of care to do anything by way of providing protection against the risk of the damage that in fact occurred. Mr Rees' claim at trial was for damages amounting to some £40,000 (plus VAT), of which £23,000 was for structural work, £15,000 for damp-proofing work and £2,000 for related professional fees. As Mr Spens put it to us, part of the work is justifiable on his submission as to the right of support, but part has to be justified by reference to negligence or nuisance. I will therefore consider the two aspects of the case separately. The claim in nuisance, based on the easement of support Mr Spens submits that the judge's error on this aspect of the case lay in distinguishing between support given against the downward pressure exerted by the weight of the roof and structure of a building, which he called weight support, and support given against the effect, on an inadequately supported side wall, of the wind, not blowing directly on the wall, but blowing along the front of the house, or along the wall itself in either direction, which he called wind support. The judge made that distinction, and accepted a submission for the Second Defendant that wind support was not within the scope of the right of support; he said that this followed as a consequence of the Court of Appeal's decision in Phipps v. Pears [1965] 1 QB 76. I will come to that case shortly, but will start from earlier authority. Dalton v. Angus (1881) 6 App Cas 740 is not the first case on rights of support but is the farthest back that it is necessary to go for present purposes. It was concerned with support to a building from adjacent land, rather than from an adjacent building. The Plaintiff's building had collapsed after the Defendant's contractors had dug down to create cellars next door. The very existence of the right of support was put in issue, one of the principal factors relied on against such a right being that, unlike all other easements, it was not generally possible for the servient owner to take any reasonable steps to prevent the acquisition of the right. If he has an adjoining building, he would have to demolish his own building and dig down, before the building next door had been standing for 20 years, to prevent it from relying on support from his property. Despite objection of that sort, the House of Lords held that a right could be, and had been, acquired, in the nature of an easement. Lord Selborne LC said this, at page 793: "What is support? The force of gravity causes the superincumbent land, or building, to press downward upon what is below it, whether artificial or natural; and it also has a tendency to thrust outwards, laterally, any loose or yielding substance such as earth or clay, until it meets with adequate resistance. Using the language of the law of easements, I say that, in the case alike of vertical and of lateral support, both to land and to buildings, the dominant tenement imposes on the servient a positive and a constant burden, the sustenance of which, by the servient tenement, is necessary for the safety and stability of the dominant." Sixty years later, in Bond v. Nottingham Corporation [1940] Ch 429 at 438-9, Sir Wilfred Greene MR said this: "The nature of the right of support is not open to dispute. The owner of the servient tenement is under no obligation to repair that part of his building which provides support for his neighbour. He can let it fall into decay. If it does so and support is removed, the owner of the dominant tenement has no cause for complaint. On the other hand, the owner of the dominant tenement is not bound to sit by and watch the gradual deterioration of the support constituted by his neighbour's building. He is entitled to enter and take the necessary steps to ensure that the support continues by effecting repairs, and so forth, to the part of the building which gives the support. But what the owner of the servient tenement is not entitled to do is, by an act of his own, to remove the support without providing an equivalent." So far as both the court and Mr Spens are aware, in no previous case has the distinction drawn by the judge in the present case been made. This may be because the point has never been taken or has never arisen on the evidence. Mr Spens submits that what was at issue in Phipps v. Pears was something quite different, and in particular a point which arose where no right of support had been found, and he says that the point at issue in the present case was not raised or argued. He therefore submits that the decision of the Court of Appeal in that case is no obstacle to his success, as the judge below thought it was. In Phipps v. Pears, two houses had stood adjacent to each other since 1930. They did not share a wall, but their respective flank walls were flat up against each other. One got into disrepair, was the subject of a demolition notice by the local authority, and was then demolished. The flank wall of the surviving property had not been rendered or plastered, and was not so treated at that stage, so rain got in and froze, causing cracks and damage. The owner of the surviving property sued for damages for withdrawal of support, but the judge held that the two houses had not in fact supported each other but rather had been free-standing. The judge also rejected an argument that the surviving property had acquired a right of protection against the elements from the demolished property. That was the point at issue on the appeal. Mr Spens asks us to note that the damage alleged was from penetration of rain, rather than from the suction effect of the wind, and says that this is a material distinction, quite apart from the non-existence in that case of a right of support. Lord Denning MR gave the principal judgment. At [1965] Ch. 82-3 he said this: "The case, so put, raises the question whether there is a right known to the law to be protected - by your neighbour's house - from the weather. Is there an easement of protection? There are two kinds of easements known to the law: positive easements, such as a right of way, which give to the owner of land a right himself to do something on or to his neighbour's land: and negative easements, which give him a right to stop his neighbour doing something on his (the neighbour's) own land. The right of support does not fall neatly into either category. It seems in some way to partake of the nature of a positive easement rather than a negative easement. The one building, by its weight, exerts a thrust, not only downwards but also sideways on to the adjoining building or the adjoining land, and is thus doing something to the neighbour's land, exerting a thrust on it: see Dalton v. Angus. But a right to protection for the weather (if it exists) is entirely negative. It is a right to stop your neighbour pulling down his own house. Seeing that it is a negative easement, it must be looked at with caution. Because the law has always been very chary of creating any new negative easements." He then drew analogies with the absence of a right to a view, and the absence of any right to the flow of wind, for example to a wind-mill, otherwise than through defined channels or to a defined aperture. He continued: "The reason underlying these instances is that if such an easement were to be permitted it would unduly restrict your neighbour in his enjoyment of his own land. It would hamper legitimate development: see Dalton v. Angus. Likewise here, if we were to stop a man pulling down his house, we would put a brake upon desirable improvement. Every man is entitled to pull down his house if he likes. If he exposes your house to the weather, that is your misfortune. It is no wrong on his part. Likewise every man is entitled to cut down his trees if he likes, even if it leaves you without shelter from the wind or shade from the sun: see Cochrane v. Verner. There is no such easement known to the law as an easement to be protected from the weather. The only way for an owner to protect himself is by getting a covenant from his neighbour that he will not pull down his house or cut down his trees. Such a covenant would be binding on him in contract, and it would be binding on any successors who took with notice of it." Thus clearly Mr Rees cannot establish a right to damages as a result of penetration of rain into his flank wall by virtue of a separate easement. But Mr Spens says his case is different: he does have a right of support, and he claims that an aspect of that is the right to be protected against instability of number 14 resulting from the flow of wind which may cause the flank wall to be pulled away from the rest of the structure of number 14. The absence of this support has led to cracks, and the existence of those cracks has led to damp penetration, but that is different from the ordinary case, at issue in Phipps v. Pears, of rain falling on the exposed wall, penetrating the un-rendered wall and causing cracking when it freezes. There is no indication that this separate cause of damage had been experienced in Phipps v. Pears. Maybe the two houses were relatively sheltered from the wind, perhaps because Warwick, far inland, was less exposed to wind than Plymouth, by the sea. Phipps v. Pears is not authority as to the scope of the right of support, but underlying the decision there is a policy that it is wrong to require too much of one of two adjoining owners as a consequence of or condition upon his entitlement to demolish his property. Phipps v. Pears was considered in two later cases: Marchant v. Capital and Counties Property Co Ltd, [1982] 2 EGLR 152 and Bradburn v. Lindsay [1983] 2 All ER 408; I will come to the latter in the context of negligence. In Marchant the owner of the surviving property had a right of support from the demolished property, but the support had not been withdrawn. Her property suffered from the penetration of damp through the party wall, and she sued the owner of the demolished property. Sir Douglas Frank Q.C. rejected her claim, relying on Phipps v. Pears. The case was then taken to the Court of Appeal, and is reported at [1983] 2 EGLR 156; there Mrs Marchant won, but on the basis of a party wall award, which had been before the judge only in an incomplete copy. The Court of Appeal held that the adjoining owner was in breach of the terms of the award as regards weatherproofing. The evidence before the court in the present case is not in the most satisfactory state, with Mr Cooper's second report having been written in response to another which was not before the judge and which we do not have. Moreover, the tape of the proceedings was, regrettably, lost before being transcribed. We have a note of the judgment prepared by the Plaintiffs' Counsel and solicitors, which has been seen, and not dissented from, by the Second Defendant's Counsel and the judge, but it does not seem to be a full verbatim account. Also, we do not have any record of the oral evidence, so that we are limited to the expert's reports, and what the judge said about them as recorded in the note of his judgment. Moreover, despite Mr Spens' clear and fair submissions, I would have preferred, on novel points such as arise in this case, to have had the benefit of submissions from advocates on both sides. Nevertheless, considering the matter on the basis of the note we have of the judge's judgment and what we do have of the evidence before him, I have come to the conclusion that what Mr Spens calls wind support is properly to be regarded as an aspect of the support which one of two adjoining buildings provides to the other. It is true that the cracking damage experienced in this case is not, on the judge's findings, part of the consequences of the pressure exerted on the flank wall, vertically or laterally, by the weight of the other parts of the structure, and so it is not within the terms in which judges have previously spoken of the right of support, as quoted in paragraphs 16 and 17 above. But it is a respect in which the building is unstable, it is so because of the demolition of the structure which did provide support, and because the flank wall itself is subject to outward lateral pressures to which it would not have been subject while 14A was in place. It is also true that, whereas weight pressures operate on the structure continuously, being kept in equilibrium by the adjoining structure, the pressure from the effects of the weather is something to which, while the adjoining structure is in place, the dominant tenement is just not exposed. From that point of view, it occurred to me that the right which Mr Rees claims might more properly be called a right of protection from these particular effects of the weather than a right of support for anything. But on reflection it seems to me that it is correctly to be regarded as an aspect of support, even if what one is considering is the effect of the unsupported weight, largely if not exclusively, of the wall itself. As Mr Cooper said in his first report, the flank wall is too high and too long to be stable as a free-standing structure. Before the demolition it was supported and was therefore stable. Afterwards it is not supported and therefore it is not stable. Why is it not stable? Because it is too big, and therefore too heavy, to stand without additional support. It is the effect of the wind suction that has made the instability manifest by cracking in the wall, but it does not seem to me that it matters what particular circumstances produce the actual cracking which is the symptom and result of the instability caused by the withdrawal of support. It could be objected that for Mr Rees to be able to recover for this type of damage, caused by the withdrawal of support, would be anomalous when Mr Phipps might have suffered exactly the same damage, but could not recover. However the distinction is that Mr Phipps' property had not been supported by the adjoining house, and it must therefore be presumed to have been stable as a free-standing structure, and not subject to this particular risk. For these reasons I have come to the conclusion that the judge was wrong to hold that the particular type of damage suffered in this case as a result of wind suction was not within the scope of the right of support. It may be that it was somewhat misleading to categorise it as something other than part of the destabilising effect of the pressure of the weight of the structure itself. As I see it, it is an effect of weight pressure, though of the weight of the wall itself, and is accordingly within the protection afforded by the right of support. Duty of care in relation to the demolition of one of two adjoining properties The finding that cracking damage to the flank wall was due to withdrawal of support does not establish that Mr Rees is entitled to the whole of the damages that he claims. That is because, as Mr Spens accepted, some of the damp penetration is likely to have been due to rain falling on the wall before it was rendered, and permeating through because of its unprotected state rather than penetrating into cracks caused by the loss of support already discussed. The evidence does not distinguish between damage resulting from one and from the other cause. Accordingly, Mr Spens seeks to show that Mr Skerrett was at fault not only in withdrawing support but also in failing to take steps to weatherproof the wall after the demolition. That is a proposition which he cannot base on his client's property rights, because of Phipps v. Pears. He therefore relies instead on showing that Mr Skerrett was under a common law duty to take these steps, and caused the loss by breach of the duty. No such duty was alleged in Phipps v. Pears, so it is not authority against the existence of such a duty. Mr Spens submits that developments in the law since then show that such a duty is incumbent on an owner in the position of Mr Skerrett. He relies first on Leakey v. National Trust [1980] QB 485. That case was concerned with a situation different from the present, because the Defendant had done nothing itself to cause or exacerbate the situation on its land which had led to damage to that of the Plaintiff. It established the proposition that an occupier of land owes a general duty of care to a neighbouring occupier, in relation to a hazard occurring on his land, whether natural or man-made, that duty being to take such steps as were reasonable in all the circumstances to prevent or minimise the risk of any injury or damage to the neighbour or his property of which the occupier knew or ought to have known, and that what is reasonable in all the circumstances will depend, among other things, on the cost of the steps which might usefully be taken and, viewed broadly, the resources available to the occupier and the neighbour. Leakey had already been decided when Mrs Marchant's case came on for trial (see paragraph 22 above). However, there is no reference to Leakey in the judgment of Sir Douglas Frank Q.C., and Mrs Marchant appeared in person at the trial, so it can be assumed that the implications of the Court of Appeal's then recent decision were not considered at all. Though the case went to the Court of Appeal, the basis on which it was argued there meant that the court did not have to consider any other possible basis of liability than the party wall award. That decision is therefore of no assistance either way. Leakey was, however, applied in a situation close to, though not quite the same as, the present by Blackett-Ord VC in Bradburn v. Lindsay [1983] 2 All ER 408. There, one of two adjoining houses, whose dividing wall was a party wall, had fallen into disrepair, to such an extent that it had dry rot, which had spread to the next house. The local authority made a demolition order and, the Defendant not having complied with it, entered and demolished the property, leaving the whole of the party wall standing but unsupported. The Plaintiff sued the owner of the demolished house. She was held liable for the loss caused by the dry rot having spread to the Plaintiff's house, on the basis that she had known of the existence of dry rot in her property, that she should reasonably have appreciated that there was a danger that it would spread to the next door house and that there were steps that she could reasonably have taken to prevent that happening. However, the judge went on to hold that she was also liable for the consequences of the demolition of her house, the party wall having been left unsupported and not weatherproofed. He distinguished Phipps v. Pears on the basis that in that case there was no question of an interference with a right of support. He held that the Plaintiff was, in principle, entitled to have the party wall both supported by buttresses and finished or rendered on the outside so as to make it weatherproof (and likewise the roof as well) as well as having protection on the inside to prevent any further risk of the spread of dry rot. He did say that there had to be a cap on the damages, by reference to the difference between the present value of the Plaintiff's property and the value that it would have had at the time with the next door property still in place but not amounting to a nuisance. The detailed circumstances of that case are such that one should not become too concerned with the details of the relief allowed, but it is clear that the judge gave the Plaintiff damages which were by no means limited to the loss of support, nor to the consequences of the presence and spread of the dry rot. He therefore applied the principle of Leakey to a situation which had been created by the Defendant's own omissions, namely the neglect leading to the presence of dry rot, and also acts, namely the demolition without proper remedial work. Mr Spens submits that, leaving aside the dry rot aspect, that case is closely analogous to the present. Leakey was also considered, in the context of support, in Holbeck Hall Hotel Ltd v. Scarborough Borough Council [2000] 2 WLR 1396, and had in the meantime also been considered in Bar-Gur v. Bruton (unreported, 29 July 1993, Court of Appeal transcript 981 of 1993), the circumstances of which sufficiently appear from the judgment in the Holbeck Hall Hotel case (see paragraphs 37 and 38). The latter case concerned support by land of buildings, and arose from the fall of a cliff which led to the hotel being damaged and having to be demolished. The complaint against the Defendant was not that it had done something negligently, but that it had failed to take steps to maintain the support, or prevent it from being withdrawn by a fall of the cliff. The Court of Appeal rejected the submission for the Defendants that, if they were to be made liable, there had to be something that they had done, rather than mere omissions. They therefore held that the statement in Bond v. Nottingham Corporation, that the servient owner can with impunity stand by and let his property fall into decay, and thereby withdraw support, (the second, third and fourth sentences in the passage quoted at paragraph 17 above) is no longer good law in the light of Leakey. In fact, both in the Holbeck Hall Hotel case, and in Bar-Gur v. Bruton (there by a majority), the court held that the Defendant was not liable on the facts, but the decisions show that the duty of the owner of the supporting land or building has now to be seen as extending, in some circumstances, to a duty to take positive steps to maintain and continue support. The point now at issue, however, is not concerned with support. Mr Spens submits that one of two adjoining owners who demolishes his property can generally foresee, and that Mr Skerrett certainly could in the present case, that, if the previously internal dividing wall is left exposed to the elements, it will suffer as a result, in particular through rain permeating the unprotected wall, then freezing and thus causing cracks, and so can foresee that his neighbour will suffer loss and damage, and that he therefore owes the neighbour a duty to take reasonable steps to protect the wall against this danger, so that, if he fails to do so, he is liable in damages for the consequences. He submits that Mr Skerrett had sufficient knowledge of the risk from the terms of the notice served under the Building Act, referred to in paragraph 6 above, with its requirement to weatherproof any surfaces of an adjacent building which are exposed by the demolition. The judge found that Mr Skerrett did know of the risk, by reason of this notice, but held that the notice itself did not give rise to anything other than a statutory obligation, and Mr Rees' action was not based on that obligation. He held that at common law there was no such duty to weatherproof, that this was established by Phipps v. Pears, and was not altered by Leakey, and that the duties of Mr Skerrett in this respect were limited to those defined in respect of the law of nuisance. With the benefit of fuller reference to authority, and in particular of the Holbeck Hall Hotel case which was decided after the judgment in the present case, it can be seen that the judge's view of the legal principle was too narrow. The principle in Leakey can apply in a case such as this, it can require the Defendant to take positive steps, and it can therefore certainly require him to take positive steps at the time of, or consequential upon, his act of demolishing his own property. Reference to Leakey itself makes it clear that it matters not whether the action is regarded as lying in nuisance or in negligence, since the ingredients would be the same: see [1980] QB 514F to 515B. The duty found to exist in Leakey is to do that which is reasonable in all the circumstances to prevent or minimise the known risk of damage to the neighbouring property: see [1980] QB 524E to H, where Megaw LJ deals in some detail with the sort of circumstances which may be taken into account in deciding what is reasonable. Though it is not relevant on the facts to the present case, it is worth noting that the carrying out of works such as those undertaken by Mr Skerrett would now be governed by the provisions of the Party Wall etc. Act 1996. By section 2(2)(n) of that Act a building owner has the right to expose a party wall hitherto enclosed subject to providing adequate weathering. Though an owner who is subject to a demolition notice does not have to serve a party structure notice under section 3 (see s. 3(3)(b)) he is still liable to compensate his neighbour for loss or damage resulting from the work done under section 7. Accordingly, circumstances of the kind at issue in this action which arise now would be likely to be dealt with under that statutory regime. The application of common law liability to a new, and far from uncommon, set of circumstances which Mr Spens invites us to make may, therefore, be of less far-reaching significance than it would be if the point had not in the meantime been affected, in practical terms, by this statutory provision. Nevertheless, his proposition does involve recognising a liability as a matter of general law, which does not depend on any unusual facts and is of potentially wide significance, and one which would attach to those in the position of Mr Skerrett a duty that has not previously been asserted but might involve significant extra expenditure, and would, in practice, reduce substantially the continuing significance of the decision of this court in Phipps v. Pears. That case remains authority that there is no absolute duty to provide weatherproofing, whereas in a case where a right of support exists there is an absolute liability for loss caused by the withdrawal of that support. The liability which Mr Spens seeks to establish is dependent on showing first that the Defendant knew or ought to have known of the risk of damage likely to result from his demolition works, if not accompanied by weatherproofing, and secondly that the damage suffered would have been prevented by work which it would have been reasonable, in all the circumstances, for him to carry out. Unlike Leakey itself and the Holbeck Hall Hotel case, but like Bradburn v. Lindsay, liability is sought to be established here for the consequences of action, rather than omissions, by the Defendant; this may be easier to establish on the facts. Lord Denning in Phipps v. Pears, in the passage cited at paragraph 20 above, identifies a policy as underlying the denial of a right of protection, namely that to recognise the right which Mr Phipps asserted would stop a man pulling down his house and would put a brake on desirable development. Such a policy is no doubt relevant, especially as regards the establishment (or not) of property rights, the infringement of which carries absolute liability. As regards the law of negligence and nuisance, developments since 1965, especially Leakey, show that the balance between the position of those who are neighbours (both in fact and in law) is now to be drawn differently in these areas of law. Moreover, it is not a question of preventing a man from pulling down his house altogether, any more than a right of support prevents demolition. Here Mr Skerrett was obliged to pull down his house. Rather, it is a question of requiring him, if and when he does demolish the house, to provide substitute protection, to the extent that this can be done by works which, in all the circumstances, it is reasonable to expect him to undertake. Having considered the matter in the light of Leakey and the cases since, especially the Holbeck Hall Hotel case, it seems to me that it would be right to hold that Mr Skerrett was under a duty, in February 1990, to take reasonable steps to provide weatherproofing for the dividing wall once it was exposed to the elements as a result of the demolition of number 14A. No issue was taken (or not effectively) by Mr Skerrett on the question whether the damage from rain penetration (as opposed to the damage from withdrawal of support) could only have been prevented by works more onerous than it would have been reasonable in the circumstances to expect Mr Skerrett to carry out. We therefore do not have to consider any such point. On that basis, I am satisfied that the judge was wrong to reject Mr Rees' claim against Mr Skerrett based on a duty of care requiring him to weatherproof the dividing wall after the demolition of 14A. Conclusion For those reasons, I would allow Mr Rees' appeal as against Mr Skerrett. In place of paragraph 1 of the judge's order, dismissing the claim for damages, I would give judgment in favour of Mr Rees against Mr Skerrett for £47,000 damages. For the purposes of the Practice Direction (Citation of Authorities) [2001] 1 W.L.R. 1001, this judgment may be cited despite the hearing having been attended by only one party, since it is intended to extend the present law. LORD JUSTICE WALLER: I agree. I have nothing to add on the easement of support aspect. As regards the liability for damage on the basis of breach of duty, I ought to add a short word. I have some anxiety, which is shared by Lloyd J, that to give judgment on this aspect in favour of the Claimant involves an extension of the law. It certainly could be said to be inconsistent with Phipps v. Pears, although as Lloyd J points out no argument was presented in that case on the basis that a liability in negligence or nuisance could be established. Such anxiety as I have is, however, dispelled by the following. If someone can owe a duty to take reasonable steps to prevent damage to his neighbour's property resulting from something naturally on his land (Leakey v. National Trust) or placed on his land by trespassers (Sedleigh-Denfield v. O'Callaghan [1940] AC 880), it would seem strange that he should not owe some duty when he pulls down the house which he appreciates protects the wall of the neighbouring house. The only suggestion is that a duty be imposed which is reasonable having regard to the position and resources of the two house owners. That does not seem extreme. In this case, furthermore, a notice had been served by the local authority, requiring weatherproofing to be done. It could thus scarcely be said either that it was not obvious that weatherproofing would be necessary if the house was demolished, or that it was unreasonable as between the Claimant and the First Defendant to require the First Defendant to carry out that weatherproofing. ORDER: Appeal allowed with costs here and below, to be the subject of a detailed assessment if not agreed; interest in the sum of £6,855 to be added to damages figure; public funded costs assessment for the appellant. (Order does not form part of approved Judgment)

MR JUSTICE COLLINS: This is an application for judicial review brought by Keith Rodger, who at the material time was a serving police officer with the Cleveland Police Authority. Since March 1996 he had been off work as a result of ill health and on 26th February 1997 he was required by the Chief Constable to retire on medical grounds. On 3rd March he was served with a notice of medical retirement. At about that time it came to the notice of the relevant officers in the force that certain allegations were being made about this Applicant and, in particular, about a fellow officer. Those allegations were such that in an ordinary course of events he would have been the subject of disciplinary proceedings. Accordingly the Assistant Chief Constable wrote a letter on 18th March to the Applicant in these terms: "Dear Mr Rodger, Further to the recent correspondence forwarded to you concerning your proposed medical retirement under the requirements of the Police Pensions Regulations, I wish to notify you that in accordance with Regulation H1 and Home Office Circular 34/1996, I have decided to defer your retirement. The Notice of Retirement dated 3rd March, 1997, is therefore withdrawn and you will not be allowed to retire at the present time. I will notify you of any change in circumstances in due course." On 27th March the relevant disciplinary notices were served. The notice of requirement, which had been given on 3rd March, had set the last working day as 8th April 1997. The first paragraph stated this: "I have to inform you that on 26th February, 1997, it was ordered that you be retired from the Police Service on medical grounds. Your last working day will be 8th April 1997." Then the various formal matters were referred to. Since the 8th or possibly 9th April 1997 (because for reasons which do not matter it seems an extra day has been given) the Applicant has remained a serving member of the police force, albeit he has not attended for duty and has, in the meantime been receiving full pay. The disciplinary proceedings have not been pursued, I assume pending the decision on this application for judicial review. The question that is raised is whether the authority, through the Assistant Chief Constable, had the power to defer retirement by the letter of 18th March 1997. It is submitted by Mr Millar, on behalf of the Applicant, that on their true construction the relevant regulations make it clear that there was no such power. I should, therefore, refer to the relevant regulations, which are the Police Pension Regulations of 1987. A20, which has a side note "Compulsory retirement on grounds of disablement", reads: "Every regular policeman may be required to retire on the date on which the police authority determine that he ought to retire on the ground that he is permanently disabled for the performance of his duty: Provided that a retirement under this Regulation shall be void if, after the said date, on an appeal against the medical opinion on which the police authority acted in determining that he ought to retire, the medical referee decides that the appellant is not permanently disabled." To put the proviso and indeed A20 in context, so far as the medical side is concerned, one has to go to Regulation H1. H1, which is in part H headed: "APPEALS AND MEDICAL QUESTIONS" and is under a side note "Reference of medical questions", reads, so far as material, as follows: "(1) Subject as hereinafter provided, the question whether a person is entitled to any, if so, what, awards under these Regulations shall be determined in the first instance by the police authority. (2) Where the police authority are considering whether a person is permanently disabled, they shall refer to a decision to a duly qualified medical practitioner selected by them the following questions: (a) whether the person concerned is disabled; (b) whether the disablement is likely to be permanent; and, if they are further considering whether to grant an injury pension, shall so refer the following questions: (c) whether the disablement is the result of an injury received in the execution of duty, and (d) the degree of the person's disablement; and, if they are considering whether to revise an injury pension, shall so refer question (d) above. ... (4) The decision of the selected medical practitioner on the questions referred to him under this Regulation shall be expressed in the form of a certificate and shall, subject to Regulations H2 and H3, be final." H2 provides a right of appeal by the officer concerned to a medical referee. That explains the proviso to A20 because the police authority are enabled by A20 to act once they receive the certificate of the selected medical practitioner, which so far as they are concerned is final. Thus, if they receive such a certificate indicating that disablement is likely to be permanent, they cannot appeal against it and they cannot seek to impugn it. Accordingly, they have then to consider the exercise of their powers under A20. I will come back to whether there is a discretion whether to exercise those powers in due course. The only other regulation which I think I need refer to is A21 which is headed: "Effective date of retirement" and, so far as material, reads by paragraph 1: "For the purposes of these Regulations- ... (b) a member of a police force required to retire under Regulation... A20 shall be deemed to retire on the date on which he is so required to retire and his last day of service shall be the immediately preceding day;" I said that was the only other provision I need to refer to, perhaps I should just en passant refer to K5 because that deals with "Forfeiture of pension" and in narrow circumstances where an ex-officer has committed a criminal offence of a particular kind then the pension can be forfeited. I do not think I need to refer to the details of K5, but merely indicate that this is the position under it. The first question to determine is: what is the duty of the police authority under A20? It is to be noted that the word used is "may": "Every regular policeman may be required to retire..." The use of that word indicates that it is a power which is to be exercised and that there must be a degree of discretion involved in it exercise. How far does that discretion extend? I have been referred to a decision of Pill J, unreported, given on 15th April 1994, CO-41-94: R v Chief Constable of Northumbria Police and Clerk to the Northumbria Police Authority, ex parte Charlton. That was a case involving a police Inspector in the Northumbria Police who was seeking judicial review of a similar decision to this, in the sense that it was an attempt by the authority to defer the disability retirement under what is now A20, pending disciplinary proceedings. There are some distinction as to fact between this case and that. It appears that it was the Northumbria Police practice laid down in their standing orders that if they obtained a medical practitioner's certificate under Regulation H1, which indicated that there was a permanent disability, they would automatically serve an A20 notice. In the case of Mr Charlton the notice purported to give a provisional date as the last date on which he was to be a serving police officer. It appears, and it is not necessary to go into the facts in any detail, that it was known that the disciplinary proceedings were pending and that there was some collusion somewhere which led to the officer obtaining the medical certificate. It is not suggested that the certificate was other than genuine, notwithstanding that the disciplinary proceedings were pending. Someone took the view, it seems, that it was desirable to avoid a lengthy investigation for formal disciplinary proceedings and possible dismissal. It is not entirely clear, from my reading of the judgment, whether it was accepted that the provisional date had, as it were, crystallised and that the last day had passed, albeit it was described as provisional. It seems that a pay slip received by the Applicant in that case on 10th November 1993 indicated that he had retired as from 4th November 1993, which was the provisional date inserted in the notice. However, it perhaps matters not because when he was told of the medical retirement he was also told by the Superintendant that the medical retirement was to be delayed until the present inquiry concerning himself had been finally resolved. That is a reference clearly to the disciplinary proceedings. Thus if he had been retired on 4th November that may simply have been because one part of the authority did not quite know what the other part was doing. It may simply have been an error. It clearly cannot be determinative because the circumstances of Charlton boil down to a service of what I will continue to call an "A20 notice", and it seems contemporaneously with that, or very shortly after it, an indication that it was to be deferred pending the disciplinary proceedings. Mr Millar, who appeared in that case too for the Applicant, submitted that there was no power to do that, and I assume may well have submitted that the discretion under A20 was a discretion that could only very narrowly be used and really only for the question of when rather than if there should be a medical retirement. At page 20 of the transcript, with which I have been provided, the learned judge says this: "In my judgment, the two stages which Lord Denning contemplated..." (He is there referring to R v Kent Police Authority and Others, Ex Parte Godden [1971] 2 QB 663. In a passage at 669E Lord Denning said this: "I am clearly of opinion that the decisions leading to compulsory retirement are of a judicial character and must conform to the rules of natural justice. They are, first, decision by the medical practitioner or on appeal by the medical referee, and, secondly, the inquiry by the police authority themselves.") To go back to the passage at 20F Pill J continues: "Under the procedures they had in force, the decision by the police authority, following their laid down procedure, came immediately upon the issue of the medical certificate. If I am wrong in my construction of the events of 7th October and the letter served on that date, in my judgment, in the present circumstances as I have outlined them, the respondents still cannot treat the applicant as being employed by them. The sequence of events was such that they cannot choose for the purpose which they indicate (namely, the purpose of continuing disciplinary action against him) to treat him as an employed person. In my judgment, there is some discretion in the police authority. There is a discretion as to date. The first letter refers to the date of termination as 'provisional'. Sensibly, in my view, the exact date is not to be stated until detailed enquiries about entitlement to pay and other matters have been made, and there is a discretion as to that date. However, I cannot hold that it is within the powers conferred by the existence of that discretion that the respondents are able indefinitely to put off that date; and particularly when the reason they seek to do so is nothing to do with pay and the detail of the working out of allowances, but is to do with the fact that they wish to pursue disciplinary procedures." Mr Millar, if I correctly followed his submissions, suggested that in that passage Pill J was expressing the scope of a discretion under A20. I do not read the passage in that way. It seems to me that what he was there saying was geared to the circumstances of that case. If he was not and if he intended the matter to go wider, I must respectfully disagree with his approach. Indeed I have my doubts as to whether there is a discretion as to date. It seems to me that if it is to exercise its discretion under A20 the language suggests that the authority has to fix a date. It is for the police authority to work out before it serves the notice the date which is the appropriate date and to include it in the notice under A20. That is after all what A20, on the face of it, says. It seems to me that the natural reading of A20 is that there is a discretion in the police authority whether to make use of it at all. It has the medical certificate. That gives it the power to use A20 because a combination of A20 and H1 makes that clear. It must then decide whether it will and if it does what should be the relevant date that is put in the notice. It is perfectly proper for it to have regard to other matters such as, for example, whether a police officer who may be permanently disabled from carrying out his normal duties, can be found light duties. If the officer has been injured on duty, or incapacitated on duty, I have no doubt forces do from time to time decide that it is perfectly proper for them to decide that they will not retire him, albeit he is permanently disabled from doing the whole of his duties. Another possibility is the existence of disciplinary proceedings. Obviously the nature of those proceedings will have to be considered and if they are relatively trivial matter it would seem quite wrong that the discretion should be exercised against retirement on grounds of disablement. If, on the other hand, they are serious, and they might well lead, if established, to a penalty of dismissal, the authority will have to decide whether on balance it is better to permit the officer to remain suspended on full pay or to discharge him on grounds of disablement. In this respect, as we know, questions of public interest may come into the picture. I am quite satisfied that the discretion under A20 is, as the regulation quite clearly, in my judgment, indicates, a discretion whether to exercise and if so, when. Thus the set of automatic approach adopted in the Northumbria case was in my view wrong. However, it is not right to put in an A20 notice anything other than a fixed date for retirement. After all, as Mr Millar has submitted, in my judgment rightly, one of the purposes of A20 is to let the officer know where he stands and part of that is to let him know when he is due to retire from the force so that he can make any necessary arrangements for what he does during his retirement. Mr Millar gave the example that he might want to take employment of some sort and may commit himself to an agreement which starts, or needs to start, on a particular date. He may want to buy himself a place where he can live in retirement. Again that is something which will no doubt be dependent upon knowing when it is that he is due to retire. Everything, in my judgment, points to the need to be certain as to the date once a decision is made that A20 is going to be used. Because the discretion exists, Mr Marron submits that it is open to the authority to re-exercise that discretion if new information comes to light. It was not Mr Marron's submission that the information has to be determinative, but I think it must be potentially determinative information. He accepts, inevitably I think, that if the information comes to light after the date that the officer has retired, nothing can be done. But he submits that so long as the officer remains in the force, it is proper that the matter should be able to be reconsidered. Mr Marron says, rightly, that there is nothing in the regulations which suggests that the decision under A20 is to be final, such as there is in relation to the medical practitioner's certificate under H1. Mr Millar's primary submission is, as I have said, that the discretion under A20 is narrower and that effectively once the medical practitioner's certificate exists that is the time at which the A20 proceedings must be brought into being. I have already indicated that I do not accept that. However, Mr Millar goes on to submit that if he is wrong about that, if there is a discretion in relation to the exercise of A20 powers, once those powers are exercised then they are irrevocable. He submits that the existence of the proviso in A20, A21(1)(b), and to a degree K5, all point in that direction. Parliament has thought it necessary to make it clear in A20 that the retirement under A20 shall be void if an appeal to the medical referee decides that the Appellant is not permanently disabled. Equally A21(1)(b) deems the retirement to be on the date on which the officer is required to retire and that suggests that the matter is indeed fixed once and for all at the service of the A20 notice. There is inevitably a degree of artificially because the line has to be drawn somewhere. If this information had come to light on, or after, 10th April Mr Marron accepts that there is nothing that could have been done about it. The effect of Mr Millar's submissions is that that is the position if it comes to light on or after the 26th February, when the decision was made. In my judgment the scheme of the regulations is such that Mr Millar's argument must be preferred. It seems to me that it would have been open to Parliament to have made it plain that after - acquired information of the sort that is referred to in this case can be a ground for reopening the matter. Parliament has not so decided and the proviso to A20 and A21(1)(b) do indeed point in the direction of finality. The officer will want to make his dispositions on the basis of what he is told and prima facie it would be quite wrong, in my judgment, to enable the matter to be left in the air. Mr Millar has drawn my attention to a passage in Wade at page 261 which deals with revocable and irrevocable action. There is, he submits, a class of case where legal rights have been determined administratively and the subject of the determination is entitled to know where he stands. At the top of page 262 we see this: "But if in a particular case it has to determine the amount of compensation or to fix the pension of an employee, there are equally clear reasons for imposing finality. Citizens whose legal rights are determined administratively are entitled to know where they stand." There is a passage further on where in dealing with Tribunals the point is made that there may be a power to set aside judgments obtained by fraud, to correct accidental mistakes or to review a decision where facts subsequently discovered have revealed a miscarriage of justice. That applies if at all to Tribunals. It is somewhat tentatively set forward and is not dealing with the sort of situation that we have here. There is no question of any miscarriage of justice. It may be that on one view the Applicant is fortunate. Equally, as I have said, it boils down to the question as to where one has to draw the line. I am quite clear that the line is to be drawn at the decision. MR MILLAR: My Lord, I am sure the matter can be disposed of by a declaration, as per point 1 at page 1 in the bundle in the notice of application, to the effect: "... the Applicant was lawfully retired from the Cleveland Constabulary on 8th April 1987 pursuant to Regulation 20 of the Police Pension Regulations 1987;" MR JUSTICE COLLINS: Yes, any observations? MR MARRON: My Lord, no. MR JUSTICE COLLINS: That seems appropriate. MR MARRON: My Lord, yes it does. MR JUSTICE COLLINS: Presumably you have to accept that costs follow the event? MR MARRON: I do. Because of the general ramifications of this particular matter would your Lordship entertain an application for leave to appeal? MR JUSTICE COLLINS: Mr Millar? MR MILLAR: I cannot pretend that it is not important to have a clear legal authority on what age something is about and if that is the basis of the application there is some force in that. It is a matter for your Lordship whether you feel this is a case where you ought to seek leave from the Court of Appeal or whether you feel, on the basis of what you have heard, that it is important enough. I suppose the only argument against it is that had the case turned on the argument between him and I as to whether there is a discretion under A20 as to whether you retire, there would have been rather more force in saying that this case should go further. It turns in fact on the construction of A20 and A21 and its significance. MR JUSTICE COLLINS: That is the part of the--- MR MILLAR: Its significance is in relation to the odd case that falls between that time gap and the decision and the retirement. Its practical importance on the ratio of your Lordship's decision. MR JUSTICE COLLINS: I think on reflection I indicated, in my judgment, the decision as to the service. I think actually thinking about it again it must be the decision and not the service of it. It must be the decision. MR MILLAR: You only did that right at the very end. MR JUSTICE COLLINS: I shall amend the transcript when I get to it and indicate that it was the decision. MR MILLAR: Therefore I say my learned friend really has what he wants on that point. I have lost on that. That is not the ratio of decision. On the other points we say that the arguments of construction are overwhelmingly in our favour. It will be a rare case that falls within that, in any event. MR JUSTICE COLLINS: Yes, you want to add---- MR MARRON: Just the observation you made, the proposed amendment, and seek to fortify the application for leave to appeal. It is an important matter. The general ramifications throughout the country---- MR JUSTICE COLLINS: I equally understand that, on the other hand I have reached a very clear conclusion indeed and that is something that I think I am entitled to take into account. MR MARRON: My Lord I would not wish to trespass at all on the content of your judgment, but you have mentioned that the position could be clarified somewhat by the efforts of Parliament. The prospect of that occurring are remote, to say the least, and accordingly we would no doubt all benefit from an established authority on ---- MR JUSTICE COLLINS: You mean my decision is not an established authority? MR MARRON: My Lord, it certainly is that but, my Lord, a higher decision. It is, in fact, imperative that this is clear. MR JUSTICE COLLINS: It is clear. No, I think I am afraid that you will have to persuade the Court of Appeal that you have a good arguable point that I am wrong. MR MARRON: My Lord, so be it. Thank you.

LORD JUSTICE WARD: This is an application by a father for permission to appeal against what is, at the moment, only the judgment of His Honour Judge Taylor, sitting in the Middlesbrough County Court on 11th January 2002. The order affecting the father was not made until 1st March, on a subsequent hearing, when the learned judge ordered, without giving any further judgment, that permission be given to the local authority to terminate the contact the father was to have to two sets of twins. There is no point in being over-concerned about the technicalities. We therefore approach this matter on the basis that the order under appeal may technically be that made on 1st March, when no reasons were given for it, and the judgment giving those reasons is the judgment of 11th January. The matter arises in difficult care proceedings brought by the local authority in respect of five children of this family. G is aged six. She is not the child of the first respondent, the applicant, Mr G. The applicant and his wife, Mrs G, then had two sets of twins: N and C are a little short of their third birthday; C and T are only 18 months old. The care proceedings were brought partly out of a concern that G may have been sexually abused, but the judge was abundantly satisfied that there was no sexual abuse proved in respect of that child and those matters disappear completely from the picture. But G and two of the twins suffered physical injuries, and serious ones at that. C had had a number of ribs broken and suffered bruising; T also had broken ribs; and G from time to time had bruising on her cheeks and a black eye. The finger of suspicion pointed inevitably to the father, but the mother was not able to exculpate herself either and, with both of them denying responsibility, an issue in the case for the judge was to make findings about those injuries. To summarise it, he found that he could not be sure which of the parents had caused which injury. He was satisfied that one or other or both had done so. Reading between the lines, it may be that he thought there was more suspicion attaching to the father's conduct than to the mother's, but there are no findings of fact which carry that further forward and the court has to proceed upon the basis that it is undetermined who caused what. Those were anxious enough decisions to take in any event, but this case had an unusual twist to it which caused the judge the manifest concern which leaps from the pages of his long, careful and sympathetic judgment, to which I pay tribute. These twins had been placed with experienced foster parents. There was a question-mark over their ability to act as adoptive parents because Mrs I is 48 and Mr I is 51, and they are at the upper level of acceptability for adoptive parents, according to conventional local authority guidelines. But they were an admirable couple who had looked after these children for many, many months so well that for the younger pair of twins they had become the primary attachment; and the elder twins likewise were firmly attached to Mr and Mrs I. Entering the picture was the father's brother and his wife, a childless couple, who demonstrated to the judge's satisfaction the most admirable qualities possible. Their claim to have both sets of twins live with them was a very powerful one. The judge resisted what would have seemed, perhaps, to be the obvious arithmetical solution of placing one set of twins with one family and the other with the other family - rightly, in my judgment. His agonising choice was to determine, therefore, whether the twins lived with the foster parents or with uncle and aunt. G, the elder child, was fairly securely placed with the maternal grandmother. That decision is what caused the judge the greatest acute anxiety. He concluded, after very careful consideration, that the right course for these children would be to remain with the foster parents. He subsequently, on 1st March, dismissed the local authority's application that the children be freed for adoption, on the basis that Mr and Mrs I would be making their own adoption application. On 1st March he gave directions accordingly, and the timetabling of the case is such that the parents are to file their statements setting out their views on the adoption by 29th May (that is to say, next week) and the matter is to be heard on Friday 7th June, with a time estimate of a day. The guardian ad litem will remain involved in the case. Having spent the major part of an extempore judgment dealing with those issues, the judge turned to the question of contact at p.52 of his judgment. He pointed out that the proposals for contact between the siblings was, wisely, that G, living with her maternal grandmother, should keep in contact with her half-brothers and sisters. Moreover, despite some difficulties that were being experienced in that regard, mother would continue to have contact with G. The judge was satisfied that Mr and Mrs I: "... because of their almost unique experience and expertise in caring for children, are people who are going to bend over backwards to ensure that the family link is not lost." The judge went on to note that the preferred view of the local authority and of the guardian was that contact with both parents should be severed. But he concluded (and I cannot fault this finding): "It is an artificial situation that would present itself because of the contact that mother and G have with one another. Because of the contact G is going to have with her siblings, and as they grow up and discuss seeing their mum, N and C in particular are of an age to know their mum and there is a bond, in particular between C and her mum, which is close and meaningful. I think, at this stage, it is impossible to say that contact is necessarily going to be a bad thing. I think that the Is were open enough to concede that it could be a good thing for some, albeit limited, contact between the mother and the twins because of the situation concerning her parents and G. What I propose to say about mother's contact at this stage, and it is difficult to make a final ruling until I know precisely the form of final order that I will make -- the timescale involved -- but on the assumption that the children remain with the Is, there needs to be a period of calm and settling down, for some months. I cannot envisage contact taking place much before the end of this year and thereafter contact that the mother may enjoy will be of an infrequent nature. It would not exceed twice a year and it may only be once a year. But I think, and it needs careful considerable in conjunction with the Is in particular, because -- particularly if there is an adoptive placement -- they have got to live with it, and they have got to make it operate, and much will depend upon the co-operation of mother. But I hope that it may be possible. I think it is in the interests of the four younger children, particularly because of G being in the equation, that there be some very limited contact with mum. As I say, not more than twice a year, possibly once a year, and I cannot envisage much contact before the end of this year. That is what I say about mother's position." I see, if I may say so with respect, the sound common sense of that part of the judgment. What has caused anxiety in this court is that the judge then dealt with the father's position immediately after the comments that I have read. He said: "So far as father is concerned, I regret to say, from his point of view, that I cannot see the same benefit accruing. He is not going to be seeing G. The children are going to be confused by his involvement in the equation and I am afraid that I have come to the view that it is not in the interests of the children to continue contact. I therefore give the local authority permission, under section 34, to terminate." I pause for a moment to observe that what the judge was doing was no more than giving the local authority permission under section 34 of the Children Act to end the contact that they would otherwise be obliged to facilitate between these children in care and their father. The judge then went on to say something about the position of the uncle and aunt. He had been asked to consider making a direction about contact between uncle and aunt and the twins. The judge was not prepared to make an order about it, but he wished the foster parents to be told of his views. He praised uncle and aunt for their mature attitude in the proceedings: they were not jumping on what he called "the bandwagon" of splitting the twins. He concluded: "I am satisfied that they are worthy people. I am satisfied that they are people who would have something to offer these young children. I think that they are people who would not disrupt the placement -- not only do I think it, I am absolutely certain of it. I think that, as the children grow up knowing about their extended family, occasional contact -- indirect, and possibly direct, would be in the long-term interests of those children. I am certain that the way that this can be achieved is by sensible consideration given by Mr and Mrs I to exchange of communications, cards -- perhaps some presents, the odd telephone call, to see how relations build up over a period of time. But I hope that that can be achieved." The father applies for permission to appeal against the order giving the local authority permission to terminate his contact. In my judgment he has shown sufficiently arguable grounds for that permission to be granted. I therefore deal with the matter on the basis that it is a full appeal. The main attack against the judgment is that the judge was so concerned to deal with the really important question of placement of the children, which he did very carefully, that, when it came to dealing with contact, it was dealt with in a way which leaves the father uncertain as to quite why his contact was denied and (more importantly, submits Mr Pinkney for the father) leaves this court uncertain as to the judge's reasons. There is force in that argument, though I wish to say at the very outset that I am wholly sympathetic to the judge because he dealt with all those other matters very carefully indeed and it is easy to see why, at the end of a very long hearing over many, many days and at the end of a long extempore judgment, he did not express himself as fully as ordinarily he would have done. The problem is that his analysis seems to be that there would not be the same benefit accruing to the children from seeing their father as accrues to them from seeing their mother. The judge felt that G's part in the equation was important. It certainly was in justifying the mother's contact, but, once contact was being afforded to her, I find it difficult to be persuaded that the children would be confused by father's involvement in the equation (using his words) when I would have expected that the children might be as confused, if not more confused, by his non-involvement in the equation. Certainly, when G comes to visit and talks about Mummy, the twins would say that it is strange that she should be seeing their mother but they are not, and that is a good reason for her having contact. But equally, I fear, the twins are as likely to be asking, "Why is it that we are seeing Mummy, but not seeing Daddy?", to which no easy answer can be given. On the judge's finding that it was uncertain who had caused the injuries, the absence of father could not be explained on the grounds that he was the perpetrator of the injuries which led to the children being put in care. He was probably one perpetrator, but it could not be excluded that mother had played her part. Moreover, when one is looking at the benefits of contact, in a case like this the benefit is the benefit that comes from the children simply knowing who the natural parental figures are. It is to remove the sense of the ogre, as they reach adolescence and begin to search for their own identity, with the double crisis not only of adolescence itself but of coming to grips with the fact that they are adopted. That is why the current research is in favour of some contact in adoption. It does not seem to me that the judge has analysed why the minimal benefit of keeping the link alive does not operate as much for father as for mother. He does not look into the long term and analyse whether there is some benefit to the children in knowing that this father has kept in touch with them, despite the adoption. Mr Pinkney made the point in the most effective way by his careful understatement of the benefits for contact in adoption, which merited more consideration than the judge was able, perhaps because of pressures of time, to give it. There is another factor that troubles me. The judge was encouraging Mr and Mrs I to keep the door open to the paternal family through uncle and aunt, and again I see the wisdom of that view that he formed. Indeed, the paradox in this case is that the guardian ad litem was prepared to support father's contact to the children if they had been placed with uncle and aunt because it would be unnatural to expect that it could not properly take place in those circumstances. But the guardian and the local authority were both of the view that both parents should have no contact if the long-term placement was with Mr and Mrs I. It seems to me that there will be even more confusion for the children if they are to be able to have contact with their paternal uncle but not to have any contact with their father, and I do not see that the judge explains why that distinction can, and should, properly be drawn. It is with a measure of reluctance that I would allow the appeal against the order because, although I find it to be flawed when subjected to detailed criticism, I remain always conscious that the judge heard the parties over days and days and had come to obvious conclusions about the personalities before him. Mr Swiffen, for the local authority, correctly submits to us that, following the recent decision of this court in English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605, an appropriate course, when considering whether or not to grant permission where the reasons of the judge are not starkly apparent, is to invite him to supplement the defect by spelling out precisely why he came to the conclusions he did. That course is unattractive to me because we do not have the time to do so. The judge will be looking at this matter on 7th June in the adoption context, and it is really in that context that this question ought to have arisen. In the light of his judgment to dismiss the local authority's application to free the children for adoption, and in the light of his inviting Mr and Mrs I to make their own adoption application, as it is inevitable they will now do, the decision he was asked to make by the local authority to terminate contact under section 34 was almost a meaningless order and it was quite unnecessary to make it. All that the order did was relieve the local authority of the duty otherwise on them to make some contact available to the parents. The local authority will cease to have anything to do in this case, as it seems to me, on 7th June as their control will come to an end on the making of the adoption order. The right time to consider what kind of contact natural parents are to have to children being adopted is on the occasion adoption is under consideration. This case is not one where the children are still with short-term foster parents, when no decisions have been taken about placement and where it can take months and, in the unhappy experience of all of us, even years to find a secure adoptive placement. In those circumstances ceasing contact by virtue of section 34 has a purpose, but, on the facts of this case, it seems to me to be particularly unimportant to avail of that remedy. Mr Swiffen has urged that one reason for denying father's contact would be his opposition to the placement with Mr and Mrs I. That is unfair on the father. It is not unfair of Mr Swiffen to make the point, but it does not do the father's case justice. He was supporting his brother and it is wholly understandable that in the proceedings before Judge Taylor in January he was pro-brother and anti-Mr and Mrs I. But what his attitude will be to their adoption application is yet to be determined. If he is adamantly opposed and if he is at risk of disrupting the placement, then that will be a factor to be taken into account. But at the moment we do not know for certain how he will be responding to the judgment of 11th January and how he will seek to assure Mr and Mrs I that he will do nothing to interrupt the adoption. It is an adoption which has the huge advantage that, for the younger twins at least, the adoptive parents are effectively the psychological parents and the only ones that C and T know; and their bond with N and C is equally strong. So the risks of upheaval are significantly less than if these children were eight, nine or ten and only being adopted at that age. Mr Pinkney, to whose submissions I pay tribute, invites us to discharge the order made under section 34 and, it having been discharged, leave it to Judge Taylor to look at contact in the light of this judgment and in the light of the events as they turn out to be on 7th June. Speaking for myself, having looked at his judgment, I, like Mr Pinkney, have no qualms at all about leaving it to Judge Taylor to reconsider contact in the adoptive context, and I have no doubt whatever that he will look at the matter afresh and without any sense that he has been tied by the view he formed in January. I would therefore feel absolute confidence in allowing him to reconsider the matter in June, when it will be open to him to deal with it, as I emphasise again, in the context of the adoption, which is a wholly different way of looking at contact than looking at contact in the context of a care case. The views I have expressed about the benefits of contact can be considered by Judge Taylor, and, as importantly, by Mr and Mrs I, whose views will be virtually determinative of the question if the adoption order is made. Neither the judge nor the proposed adoptors are bound by my views. Both are free to embrace or reject them. But I regret that I have been persuaded that the judge did not fully explain his reasons and may not have thought the matter through as fully as usually he would. Therefore, I would allow the appeal and discharge the order in fact drawn on 1st March giving permission to the local authority to terminate father's contact to these twins. The result is that the question of contact after adoption must be reconsidered on 7th June. SIR MARTIN NOURSE: For the reasons given by Lord Justice Ward I too would grant the father permission to appeal and allow his appeal. I do not wish to add to my Lord's reasoning. I concur in the order proposed by him. Order: application for permission to appeal granted; appeal allowed and order of 1st March discharged; public funding costs assessment for the applicant.

Judgment of the Court of First Instance (Fifth Chamber, extended composition) of 22 November 2001. - Mitteldeutsche Erdöl-Raffinerie GmbH v Commission of the European Communities. - State aid - Extension of the period for completion of investment projects qualifying for a premium - General aid scheme - Action for annulment - Admissibility - Act of direct and individual concern to the applicant - Interest in bringing proceedings - Additional aid - Investment aid or operating aid - Principle of proportionality. - Case T-9/98. European Court reports 2001 Page II-03367 Summary Parties Grounds Decision on costs Operative part Keywords 1. Actions for annulment - Natural or legal persons - Measures of direct and individual concern to them - Whether directly affected - Criteria - Examination of aid granted by States - Commission decision declaring the extension of the period for completion of investment projects qualifying for a premium incompatible with the common market - Undertakings entitled to the premium are directly affected (EC Treaty, Art. 93(2) (now Art. 88(2) EC), and Art. 173, fourth para. (now, after amendment, Art. 230, fourth para., EC)) 2. Actions for annulment - Natural or legal persons - Measures of direct and individual concern to them - Commission decision, addressed to a Member State, finding that State aid is incompatible with the common market - Decision which, as regards the potential beneficiaries of the aid, has the appearance of a measure of general application - Recipient undertaking placed in a factual situation which distinguishes it from all other traders - Whether admissible EC Treaty, Art. 93(2) (now Art. 88(2) EC), and Art. 173, fourth para. (now, after amendment, Art. 230, fourth para., EC)) 3. State aid - Prohibition - Derogations - Commission's discretion - Differentiation between the beneficiaries of the notified aid scheme (EC Treaty, Art. 92 (now, after amendment, Art. 87 EC)) Summary 1. To be of direct concern to a private applicant for the purposes of the fourth paragraph of Article 173 of the EC Treaty (now, after amendment, the fourth paragraph of Article 230 EC), the Community measure must directly affect the applicant's legal situation and its implementation must be purely automatic and result from Community rules alone without the application of other intermediate rules. The same applies where the opportunity for addressees not to give effect to the Community measure is purely theoretical and their intention to act in conformity with it is not in doubt. It follows that the legal position of an undertaking entitled to an investment premium is directly affected by the Commission decision declaring a provision of the fiscal law of a Member State prolonging the period within which the investment project must have been completed in order to qualify for that premium to be incompatible with the common market, in so far as the repeal obligation in that decision necessarily had the consequence of requiring the national authorities to recover the sums paid to the applicant. ( see paras 47-48, 50, 52 ) 2. Persons other than the addressees of a decision may claim to be individually concerned within the meaning of the fourth paragraph of Article 173 of the EC Treaty (now, after amendment, the fourth paragraph of Article 230 EC) only if the decision affects them by reason of certain attributes peculiar to them or by reason of factual circumstances differentiating them from all other persons and, as a result, distinguishes them individually in like manner to the person addressed. A Commission decision prohibiting generally the application of a national tax provision of general application laying down a fiscal investment premium, although addressed to the Member State concerned, has the appearance, as regards the potential beneficiaries of that provision, of a measure of general application covering situations which are determined objectively and entailing legal effects for a class of persons envisaged in a general and abstract manner. However, such a decision cannot be regarded as affecting an undertaking solely by virtue of its objective capacity as a potential recipient of the investment premium, in the same manner as any other operator who is, or might be in the future, in the same situation, unless there are a number of factors which place the applicant in a situation which differentiates it from all other operators. ( see paras 75-78 ) 3. The fact that, formally, the Commission has been notified of an aid scheme does not prevent it from examining its application in a particular case, as well as making a general and abstract examination of the scheme. Similarly, in the decision it adopts following its examination, the Commission can consider that some specific applications of the aid scheme notified constitute aid while others do not, or can declare certain applications only to be incompatible with the common market. In the exercise of its wide discretion, it may differentiate between the beneficiaries of the aid scheme notified by reference to certain characteristics they have or conditions they satisfy. An examination of the specific case of one of the undertakings to benefit from the notified aid scheme applicant may be required not only in view of the particular features of its situation but also because, during the administrative procedure, the Government of the Member State concerned had expressly asked for that to be done. ( see paras 116-117 ) Parties In Case T-9/98, Mitteldeutsche Erdoel-Raffinerie GmbH, established in Spergau, Germany, represented initially by M. Schütte and M. Maier, lawyers, and subsequently by Mr Schütte and J. Lüdicke, lawyer, with an address for service in Luxembourg, applicant, v Commission of the European Communities, represented by V. Kreuschitz and P. Nemitz, acting as Agents, with an address for service in Luxembourg, defendant, APPLICATION for annulment of Commission Decision 98/194/EC of 1 October 1997 concerning the extension of the 8% investment premium for investment projects in the new Länder pursuant to the Finance Law 1996 (OJ 1998 L 73, p. 38), THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber, Extended Composition), composed of: P. Lindh, President, R. García-Valdecasas, J.D. Cooke, M. Vilaras and N.J. Forwood, Judges, Registrar: D. Christensen, Administrator, having regard to the written procedure and further to the hearing on 25 January 2001 gives the following Judgment Grounds Facts and procedure 1 The applicant is a subsidiary of the French company Elf Aquitaine SA (Elf). It was formed with a view to constructing a refinery in Leuna in the Land of Saxony-Anhalt (the Leuna 2000 refinery or the Leuna 2000 project), following an agreement of 23 July 1992 on the privatisation of an old refinery in Leuna and of Minol AG, a distributor of refined petroleum products. The construction work, which started in 1993, was to be completed in July 1996, according to Elf's original plans. It was not in fact possible to complete it until November 1997, as a result of circumstances beyond the applicant's control, in particular the presence on the site of bombs and mines from the Second World War. 2 The German authorities decided to grant a package of aid to the applicant for the Leuna 2000 project, including aid of DEM 360 000 000 as the 8% investment premium for investment projects in the new Länder provided for by the Investitionszulagengesetz 1993 (Law on investment premiums 1993, the InvZulG). In 1995 part of that sum, DEM 97 500 000, was paid to the applicant for its investments in connection with the project during the previous year. 3 Paragraph 3(3) of the InvZulG stated that, to qualify for the 8% premium, investment projects had to be started between 31 December 1992 and 1 July 1994 and completed before 1 January 1997. If a project was not fully completed within that period, the sums already received by the investor as investment premium had to be repaid. By letter of 24 November 1992 the Commission had informed the German Government of its decision of 11 November 1992 not to raise any objections to that aid scheme under Articles 92 and 93 of the EC Treaty (now, after amendment, Articles 87 EC and 88 EC). 4 By decision of 30 June 1993 the Commission declared the aid package referred to in paragraph 2 above compatible with the common market under Article 92(3) of the Treaty (OJ 1993 C 214, p. 9, the decision of 30 June 1993). By decision of 25 October 1994 it authorised the grant of additional aid for the Leuna 2000 project (OJ 1994 C 385, p. 35, the decision of 25 October 1994). 5 Paragraph 3(3) of the InvZulG was amended by Paragraph 18(1) of the Jahressteuergesetz 1996 (Finance Law 1996), which was adopted on 11 October 1995 and entered into force on 1 January 1996. Under that provision, to qualify for the 8% premium, the investment project now had to be completed before 1 January 1999. The period within which the project had to be started remained unchanged. 6 By a communication of 19 December 1995 the German Government belatedly notified the Commission of the amendment. By letter of 17 November 1995 the Federal Ministry of Finance had, however, instructed the tax authorities of the Länder not to apply the amendment until the Commission approved it pursuant to Articles 92 and 93 of the Treaty. 7 By decision of 3 July 1996, notified to the German Government on 31 July 1996, the Commission initiated the procedure under Article 93(2) of the Treaty against Paragraph 18(1) of the Finance Law 1996 (OJ 1996 C 290, p. 8). It invited the Federal Republic of Germany and the other Member States and interested parties to submit comments. The German Government and Elf submitted comments by letters of 9 September and 29 October 1996 respectively. The French Government gave its views on 30 October 1996, referring to Elf's observations. 8 Between December 1996 and July 1997, the Commission and the German authorities had several meetings to discuss the matter. 9 On 1 October 1997 the Commission concluded the procedure by adopting Decision 98/194/EC concerning the extension of the 8% investment premium for investment projects in the new Länder pursuant to the Finance Law 1996 (OJ 1998 L 73, p. 38, the contested decision). Its operative part reads as follows: Article 1 [Paragraph] 18(1) of the Finance Law 1996, which amends [Paragraph 3 of the InvZulG] to the effect that the 8% investment premium is now granted for investment projects which were begun after 31 December 1992 and before 1 July 1994 and are completed before 1 January 1999 (instead of before 1 January 1997), introduces new, additional State aid for undertakings which have made investments in the new Länder. This aid is unlawful, since it was put into effect in disregard of Article 93(3) of the EC Treaty. The aid is incompatible with the common market, since it does not contribute to the achievement of one of the objectives referred to in Article 92(2) and (3) of the EC Treaty. Article 2 [Paragraph] 18(1) of the Finance Law 1996 shall be repealed. Germany shall recover all aid which was granted pursuant to this provision. The aid shall be repaid in accordance with the procedures and provisions of German law with interest running from the date of grant of the aid calculated on the basis of the rate serving as the reference interest rate used in assessing regional aid programmes. Article 3 Germany shall inform the Commission within two months of the date of notification of this Decision of the measures it has taken to comply herewith. Article 4 This Decision is addressed to the Federal Republic of Germany. 10 By application lodged at the Registry of the Court of First Instance on 5 January 1998, the applicant brought the present action. 11 On 30 January 1998 the German Government notified the Commission of a settlement concluded on 30 December 1997 between Elf and the applicant on the one hand and the Bundesanstalt für vereinigungsbedingte Sonderaufgaben (Federal Office for special tasks consequent on reunification, the BvS) on the other. The settlement provided inter alia for the payment to the applicant of DEM 240 000 000 by the BvS and DEM 120 000 000 by the Land of Saxony-Anhalt. Implementation of the settlement was subject to prior authorisation by the Commission from the point of view of the Community rules on State aid. 12 By letter of 13 March 1998 the German Government informed the Commission that the contested decision had been put into effect by Paragraph 12 of the Gesetz zur weiteren Fortentwicklung des Finanzplatzes Deutschland (Law for the further development of Germany as a financial centre). That law was adopted by the Bundestag on 13 February 1998, approved by the Bundesrat on 6 March 1998, and published on 24 March 1998. 13 By order of 30 April 1998 the President of the Fourth Chamber, Extended Composition, of the Court of First Instance suspended the procedure until 15 June 1998. By order of 10 June 1998 he extended the suspension until 15 July 1998. 14 By separate document lodged at the Registry on 21 September 1998, the Commission raised a plea of inadmissibility under Article 114(1) of the Rules of Procedure of the Court of First Instance. 15 The applicant submitted observations on the plea of inadmissibility on 9 November 1998. 16 On 17 March 1999 the Court of First Instance (Fifth Chamber, Extended Composition), pursuant to Article 64(3) of the Rules of Procedure, requested the parties to provide information on the settlement and to state whether they considered that it would still be necessary to adjudicate if the settlement were put into effect. The parties replied by letters of 31 March 1999. 17 By order of 11 May 1999 the Court of First Instance (Fifth Chamber, Extended Composition) joined the plea of inadmissibility to the substance. 18 On 13 March 2000 the Commission adopted a decision finding that the settlement did not contain any element of State aid within the meaning of Article 92(1) of the Treaty as far as the payment of DEM 240 000 000 by the BvS was concerned (the decision of 13 March 2000). With respect to the payment of DEM 120 000 000 by the Land of Saxony-Anhalt, it considered that that measure constituted State aid but declared it compatible with the common market. 19 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Fifth Chamber, Extended Composition) decided to open the oral procedure. As measures of organisation of the procedure, it invited the parties and the Federal Republic of Germany to produce various documents and reply to various questions. The parties and the Federal Republic of Germany did so within the time-limit set. 20 The parties presented oral argument and answered the questions put by the Court at the hearing on 25 January 2001. Forms of order sought by the parties 21 The applicant claims that the Court should: - reject the plea of inadmissibility; - annul the contested decision in so far as it causes the applicant harm; - order the Commission to pay the costs. 22 The Commission contends that the Court should: - dismiss the action as inadmissible; - in the alternative, dismiss it as unfounded; - order the applicant to pay the costs. Admissibility 23 The Commission submits that the action is inadmissible on the grounds that the applicant is not directly and individually concerned by the contested decision and that it has no interest in having it annulled. 24 The question as to whether the applicant has an interest in bringing proceedings will be considered first. Interest in bringing proceedings Arguments of the parties 25 The Commission submits that the applicant has not shown that it has an interest in bringing proceedings, since it is clear that the aid scheme at issue would not be reintroduced if the contested decision were annulled. It observes that the Federal Republic of Germany has taken the necessary legislative measures to enforce that decision, those measures entered into force on 28 March 1998, and the tax authorities of the Länder have begun to seek from investors who were unable to complete their projects before 1 January 1997 repayment of the sums they had already received as 8% investment premium. It also points out that the German Government has not brought an action for annulment of the contested decision, and has not intervened in the present case in support of the form of order sought by the applicant. 26 The Commission adds that the settlement, which it approved by decision of 13 March 2000, settled the dispute concerning the payment of the 8% premium to the applicant. It observes that the applicant has moreover undertaken to discontinue the present action once the settlement has been approved and the sum of DEM 360 000 000 paid. 27 The applicant claims that it has an interest in bringing proceedings. 28 It submits, first, that in the event of the contested decision being annulled the repeal of Paragraph 18(1) of the Finance Law 1996 could not be invoked against it, having regard to the principle of the protection of legitimate expectations. Moreover, in the absence of such annulment, it would not be able under German law to submit any ancillary claims. 29 The applicant considers, second, that the fact that the Federal Republic of Germany has not challenged the contested decision and has not intervened in the present action is of no relevance. 30 It observes, third, that the question of the admissibility of the action must be assessed by reference to the date when the application was lodged, and points out that at that date the settlement had not yet been approved by the Commission and Paragraph 18(1) of the Finance Law 1996 had not yet been repealed. 31 As regards the settlement, the applicant stated at the hearing that, following the decision of 13 March 2000, the BvS had paid it the agreed sum of DEM 240 000 000. As to the sum of DEM 120 000 000 payable by the Land of Saxony-Anhalt, it explained that it was originally intended to be set off against the DEM 97 500 000 it had received in 1995 as 8% premium. When the Commission objected to such a set-off, the applicant repaid the latter amount by depositing it in a blocked account, in order to avoid it being included in the general budget of the Land of Saxony-Anhalt - investment premiums do not come under a specific expenditure item - and consequently being used by the Land to make the payment due under the settlement. According to the applicant, if the Court were to annul the contested decision and the German authorities accordingly had to withdraw the repayment notice relating to the sum of DEM 97 500 000, that sum would become available for carrying out the settlement. As to the balance of DEM 22 500 000, the BvS had agreed to pay it to the applicant, in view of the inability of the Land of Saxony-Anhalt to accept such a financial burden. Findings of the Court 32 In accordance with settled case-law, an action for annulment brought by a natural or legal person is admissible only if that person can show an interest in bringing proceedings (order in Case T-5/99 Andriotis v Commission and Cedefop [2000] ECR II-235, paragraph 36, and Case T-139/99 AICS v Parliament [2000] ECR II-2849, paragraph 28). Such an interest exists only if the annulment of the measure is of itself capable of having legal consequences (Case 53/85 Akzo Chemie v Commission [1986] ECR 1965, paragraph 21, and Case T-102/96 Gencor v Commission [1999] ECR II-753, paragraph 40). 33 Moreover, the interest in bringing proceedings for annulment is assessed as at the date when the action is brought (Case 14/63 Forges de Clabecq v High Authority [1963] ECR 357, at 371, and Case T-22/97 Kesko v Commission [1999] ECR II-3775, paragraph 55). 34 In the present case, the fact that the German Government has fully complied with the contested decision and does not intend to reintroduce the aid scheme in question if the decision is annulled cannot be used to argue that the applicant has no interest in bringing proceedings. The documents in the case show that if Paragraph 18(1) of the Finance Law 1996 had remained in force, the applicant would have received the 8% premium for its investment project, since it satisfied all the conditions laid down by the InvZulG and had completed the project before 1 January 1999. In those circumstances, it cannot be excluded that, as the applicant asserts, it may be able to put forward certain claims before the German authorities if the contested decision is found by the Court to be unlawful. 35 Nor may any conclusion be drawn from the - entirely legitimate - choice of the German Government for its part not to seek annulment of the contested decision or to intervene in support of the form of order sought by the applicant in the present case. 36 Moreover, the conclusion of the settlement on 30 December 1997 did not deprive the applicant of its interest in bringing proceedings. It is common ground that the implementation of that settlement was conditional on approval by the Commission. That was not given until 13 March 2000, more than two years after the date on which the present action was brought. 37 As to the question whether that approval then deprived the applicant of its interest in bringing proceedings, it suffices to note that the Commission has not seriously cast doubt on the applicant's assertion that the Land of Saxony-Anhalt will be in a position to pay the sum of DEM 97 500 000, currently deposited in a blocked account, in order fully to implement the settlement, only in the event that the Court annuls the contested decision (see paragraph 31 above). The allegation by the Commission at the hearing that the applicant wants to be paid the DEM 360 000 000 twice, once under the aid scheme in question and again under the settlement, must be rejected. The settlement expressly provides that the applicant is to repay to the BvS any sum paid to it as 8% investment premium which would enable it to dispose over an amount greater than DEM 360 000 000. 38 It follows from the above considerations that the applicant has an interest in obtaining the annulment of the contested decision. Whether the applicant is directly concerned by the contested decision Arguments of the parties 39 The Commission submits that the contested decision does not directly affect the applicant's rights. 40 It argues that the obligation of repayment on the applicant derives not from the contested decision but from the fact that the applicant did not satisfy the condition under the InvZulG, in its 1993 version, that the investment project had to be completed before 1 January 1997. In this respect, Article 2 of the contested decision relates only to aid granted under Paragraph 18(1) of the Finance Law 1996. No case of application of Article 2 exists, given that, following the letter of the Federal Ministry of Finance of 17 November 1995 (see paragraph 6 above), the amendment to Paragraph 3(3) of the InvZulG was not put into effect. 41 The Commission further submits that, at the date of lodging of the document in which it raised a plea of inadmissibility, the German authorities had not yet required the applicant to repay the DEM 97 500 000 already received as 8% investment premium for 1994. It considers that if the contested decision had directly entailed an obligation to repay, the repayment would have had to be made within a period of two months from the notification of the decision. 42 Finally, the Commission points out that, if the contested decision were annulled, the applicant would not be able to claim any payment as investment premium, since the amendment to the InvZulG by Paragraph 18(1) of the Finance Law 1996 has been repealed in the meantime. 43 The applicant submits that it is directly concerned by the contested decision. 44 First, it observes that the investment premium is granted directly by German federal law, so that any undertaking which satisfies the conditions laid down by the InvZulG is entitled to that premium without a discretionary decision of the administration being necessary. It then says that it satisfied the conditions laid down by that law, as amended by Paragraph 18(1) of the Finance Law 1996, since construction of the Leuna 2000 refinery was completed in November 1997. Consequently, if the Commission had approved that provision, the applicant would have been directly entitled to DEM 360 000 000 as 8% investment premium. The applicant adds that, in accordance with the principle of the protection of legitimate expectations, it can still claim that entitlement despite the implementation by the Federal Republic of Germany of the contested decision. 45 Second, the applicant submits that Article 2 of the contested decision has the direct consequence of requiring it to repay the DEM 97 500 000 it received in 1995 as 8% investment premium. It observes here that it is settled case-law that the national authorities have no discretion as regards the recovery of aid (Case C-142/87 Belgium v Commission [1990] ECR I-959, paragraph 61, Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 12, and Case C-24/95 Alcan Deutschland [1997] ECR I-1591, paragraph 24). The applicant considers that the Commission's assertion that the obligation to make repayment derives from the InvZulG is incorrect. It observes that the Commission made its approval of the settlement conditional on repayment of the sum in question, which shows that it considers that the money was unlawfully paid on the basis of Paragraph 18(1) of the Finance Law 1996. Moreover, the repayment notice issued by the German authorities was based on the latter provision. Findings of the Court 46 Under the fourth paragraph of Article 173 of the EC Treaty (now, after amendment, the fourth paragraph of Article 230 EC), a natural or legal person may bring an action against a decision addressed to another person only if that decision is of direct and individual concern to him. Since the contested decision was addressed to the Federal Republic of Germany, the Court must examine, first, whether it is of direct concern to the applicant. 47 It is settled case-law that for a contested Community measure to be of direct concern to a private applicant for the purposes of the above provision, it must directly affect the applicant's legal situation and its implementation must be purely automatic and result from Community rules alone without the application of other intermediate rules (Case C-386/96 P Dreyfus v Commission [1998] ECR I-2309, paragraph 43, and Case T-69/99 DSTV v Commission [2000] ECR II-4039, paragraph 24). 48 The same applies where the opportunity for addressees not to give effect to the Community measure is purely theoretical and their intention to act in conformity with it is not in doubt (Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207, paragraphs 8 to 10, and Dreyfus v Commission, paragraph 44). 49 In the present case, by virtue of the first sentence of Article 2 of the contested decision, the Federal Republic of Germany was obliged to repeal Paragraph 18(1) of the Finance Law 1996. As a result of that repeal, the deadline for completion of investment projects qualifying for the 8% premium was automatically brought forward from 31 December 1998 to 31 December 1996. 50 Consequently, the German authorities were obliged to recover from investors who had not completed their projects by that date the sums they had already received as 8% investment premium. Thus, in the applicant's case, the documents in the case show that it had to repay the DEM 97 500 000 it had been paid in 1995. The fact that the money was not repaid within two months from the notification of the contested decision to the Federal Republic of Germany (see paragraph 41 above) is immaterial, since it is common ground that that State was obliged to implement that decision. The fact that, formally, the obligation of repayment referred to in the second sentence of Article 2 of the contested decision only concerns aid granted pursuant to Paragraph 18(1) of the Finance Law 1996 is irrelevant because, as stated above, the repeal obligation in the first sentence of Article 2 necessarily had the consequence of requiring the German authorities to recover DEM 97 500 000 from the applicant. 51 Moreover, the documents show that the applicant satisfied all the conditions laid down by the InvZulG and that, since its investment project was completed before 1 January 1999, it would have received the 8% premium if the amendment to that law introduced by Paragraph 18(1) of the Finance Law 1996 had been maintained. The intention of the German authorities to grant the applicant that aid was never in doubt. The Commission's argument based on the fact that Paragraph 18(1) has been repealed (see paragraph 42 above) is of no relevance to the question whether the applicant is directly concerned by the contested decision. 52 It follows from the above considerations that the legal position of the applicant is directly affected by the contested decision. Whether the applicant is individually concerned by the contested decision Arguments of the parties 53 The Commission observes that, according to settled case-law, persons other than those to whom a decision is addressed can be individually concerned within the meaning of the fourth paragraph of Article 173 of the Treaty only if the decision affects them by reason of certain attributes peculiar to them or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed (Case 25/62 Plaumann v Commission [1963] ECR 95, at 107, Case 231/82 Spijker v Commission [1983] ECR 2559, paragraph 8, and Case C-309/89 Codorniu v Council [1994] ECR I-1853, paragraph 20; Case T-2/93 Air France v Commission [1994] ECR II-323, paragraph 42, Case T-435/93 ASPEC and Others v Commission [1995] ECR II-1281, paragraph 62, Joined Cases T-481/93 and T-484/93 Exporteurs in Levende Varkens and Others v Commission [1995] ECR II-2941, paragraph 51, and Case T-398/94 Kahn Scheepvaart v Commission [1996] ECR II-477, paragraph 37). 54 It observes that Paragraph 1 of the InvZulG defines as eligible for the 8% premium taxable persons within the meaning of the laws on income tax and corporation tax who carry out qualifying investments within the meaning of Paragraphs 2 and 3 of the InvZulG within the favoured region, that that region corresponds to the new Länder, and that qualifying investments are essentially the acquisition and production of new depreciable moveable assets. 55 It then states that the amendment introduced by Paragraph 18(1) of the Finance Law 1996 benefited two categories of persons, namely those who applied for and obtained 8% investment premiums for the years 1994 to 1996 but were unable to complete their projects before 1 January 1997 and so had to repay the premium (the first category) and those who started to carry out investments before 1 January 1994 but did not claim the premium for the years 1994 to 1996 because they knew that they would not be able to complete their projects before 1 January 1997 (the second category). 56 According to the Commission, those elements show that the scope of the rules in question is not limited to the applicant's case, and that the number and identity of potential beneficiaries cannot be determined precisely. 57 It submits, next, that since the contested decision prohibits the application of general rules, it is itself, as regards the potential beneficiaries of those rules, a measure of general application which applies to objectively defined situations and has legal effects for a category of persons defined in a general and abstract manner. The decision affects the applicant only by virtue of its objective capacity as an investor in the aid region concerned, in the same manner as any other investor who is, or might be in the future, in the same situation (Piraiki-Patraiki, paragraph 14, Spijker, paragraph 9, and Kahn Scheepvaart, paragraph 41). 58 The Commission also disputes the circumstances relied on by the applicant in support of its argument that it is individually concerned by the contested decision. 59 It considers, in the first place, that the applicant's argument that it seeks annulment of the decision only to the extent that it does not authorise the application of Paragraph 18(1) of the Finance Law 1996 in the applicant's particular case cannot be accepted. 60 First, it has not been shown that that provision was specifically intended to govern the applicant's situation. The fact, mentioned in a communication from the German Government to the Commission of 23 June 1998, that the 8% investment premium had to be repaid in over 100 cases in fact proves the contrary. Moreover, the second category includes an indefinite number of potential beneficiaries. In any event, the reasons behind the adoption of a general aid scheme are not relevant for assessing whether an applicant has standing to bring an action. 61 Second, the Commission submits that the contested decision cannot be interpreted as including a distinct part relating to the applicant's situation. It states that it could not have made such a distinction, since the notification of 19 December 1995 related solely to a general aid scheme available to any person satisfying certain objective conditions, and that scheme was already in force at that date. The German Government's observations of 9 September 1996 cannot be construed, moreover, as notification of a specific aid in favour of the applicant. On the contrary, they confirm that the extension of the period for carrying out investments qualifying for the 8% premium was not intended to benefit the applicant alone, and the Leuna 2000 project is cited merely as an example. In any case, even if the German Government had intended to present the extension as aid for the exclusive benefit of the applicant, that would have had no effect. According to the Commission, the classification of a measure as a specific aid or a general aid scheme depends on objective criteria, not on the subjective assessment of the notifying authority. The Commission observes, finally, that it would have been open to the German Government to withdraw its original notification and to notify it of a specific aid in favour of the applicant. 62 Third, the Commission denies that it had no objection in principle, from the point of view of the Community rules on State aid, to the application of Paragraph 18(1) of the Finance Law 1996 to the specific case of the applicant. 63 In the second place, it repeats that the number of cases concerned by the extension of the period for carrying out investments qualifying for the 8% premium was not known. It adds that in any event it is settled case-law that a measure does not cease to be a regulation because it is possible to determine the number or even the identity of the persons to whom it applies at any given time as long as it is established that such application takes effect by virtue of an objective legal or factual situation defined by the measure in relation to its purpose (Spijker, paragraph 10). 64 In the third place, the Commission argues that the fact that the applicant took part in the administrative procedure and is mentioned by name in the contested decision does not mean that it has standing to bring proceedings. It disputes the relevance of the cases cited by the applicant in the application. Four of the five judgments it cites concerned anti-dumping procedures and regulations, a completely different situation from that of the present case. As to the fifth judgment cited, Case 169/84 Cofaz v Commission [1986] ECR 391, the principles it states are not applicable here, since the applicant was not at the origin of a complaint which led to the opening of the administrative procedure and its observations did not determine the course of that procedure. The Commission adds that the mere fact that the applicant made observations during the administrative procedure or might perhaps be regarded as a party concerned within the meaning of Article 93(2) of the Treaty does not suffice to distinguish it individually in the same way as the person to whom the decision was addressed (Kahn Scheepvaart, paragraph 42, and order in Case T-189/97 Comité d'entreprise de la société française de production and Others v Commission [1998] ECR II-335, paragraphs 42 and 44). It observes, next, that the applicant was mentioned by name in points II and III of the contested decision only to summarise the arguments of the German Government, which had referred to the applicant's difficulties to justify the aid scheme. 65 The applicant claims that the contested decision affects it by reason of certain attributes peculiar to it or by reason of circumstances in which it is differentiated from all other persons. 66 It states, in the first place, that it attacks the decision only to the extent that it does not accede to the German Government's request to authorise application of the amendment to the InvZulG in its particular case. That the InvZulG constitutes a general aid scheme and Paragraph 18(1) of the Finance Law 1996 amends such a scheme is therefore immaterial. 67 In the applicant's view, the notification by the German Government in fact had two subjects: a general aid scheme and a specific aid for the applicant. The German Government introduced the latter aspect of the notification in its observations of 9 September 1996, when it became apparent that the Commission had certain objections to Paragraph 18(1) of the Finance Law 1996. Those observations thus amended the original notification of 19 December 1995. 68 The applicant claims that the latter provision was adopted specifically for it by the German authorities. The Land of Saxony-Anhalt took the initiative of asking for the InvZulG to be amended when it became apparent that, for reasons not attributable to the applicant, the Leuna 2000 project could not be completed by the end of 1996. The applicant observes that in September 1996 the Federal Ministry of Economic Affairs had moreover informed it that, as far as the ministry knew, it was the only undertaking to benefit from the extension brought about by Paragraph 18(1) of the Finance Law 1996, and it was not until later that it became evident that other undertakings could also benefit. 69 The applicant further submits that the Commission had no objection of principle as regards the compatibility with the common market of the application of Paragraph 18(1) of the Finance Law 1996 to its specific case. It observes that by its decision of 30 June 1993 the Commission had moreover already authorised the grant of DEM 360 000 000 for its investment project. 70 Finally, the applicant considers that the Commission cannot claim that it would have been illegal in German constitutional law to limit the application of a federal law to one particular case. Even if an aid is introduced by a law, there is nothing to prevent the Commission, taking its decision with reference to the Community rules on State aid, from authorising a particular case of application of that law while prohibiting all the others. 71 The applicant observes, in the second place, that the number of undertakings liable to benefit from the extension introduced by Paragraph 18(1) of the Finance Law 1996 is objectively limited and capable of determination. The only undertakings concerned by that measure are those which started to carry out an investment project between 1 January 1993 and 30 June 1994 and first applied to the German authorities for the 8% premium before 30 September 1995 (see paragraph 89 below). It reiterates that, at the time of adoption of the contested decision, it was the only known beneficiary of the extension. The fact that it appeared from the German Government's communication of 23 July 1998 that more than 100 undertakings benefited from the extension is irrelevant because it was subsequent to the contested decision. Besides, repayment of the 8% investment premium was in fact sought in only 62 cases, and it is doubtful whether those cases all concerned premiums granted under Paragraph 3(3) of the InvZulG. 72 The applicant submits, in the third place, that it is mentioned by name in several places in the contested decision, that its particular situation determined the course of the administrative procedure, and that Elf took an active part in that procedure and made numerous observations. In support of its arguments, it cites a number of judgments of the Court of Justice in anti-dumping cases (Joined Cases 239/82 and 275/82 Allied Corporation and Others v Commission [1984] ECR 1005, Case 264/82 Timex v Council and Commission [1985] ECR 849, Joined Cases C-133/87 and C-150/87 Nashua and Others v Commission and Council [1990] ECR I-719, and Case C-358/89 Extramet Industrie v Council [1991] ECR I-2501), together with the Cofaz judgment which, it says, held that the cases on the anti-dumping procedure should be used as a guide when assessing whether an applicant has standing to bring an action for annulment in a State aid case. It says that Cofaz cannot be interpreted as meaning that undertakings unable to demonstrate that they are in a situation identical to that examined in that judgment can never be regarded as individually concerned within the meaning of Article 173 of the Treaty (Case T-435/93 ASPEC and Others v Commission [1995] ECR II-1281, paragraph 64, and Case T-149/95 Ducros v Commission [1997] ECR II-2031, paragraph 34). The fact that the applicant was not at the origin of a complaint which gave rise to the opening of the administrative procedure is not therefore decisive in the present case. Findings of the Court 73 Since the contested decision was addressed to the Federal Republic of Germany, the Court must, secondly, examine whether it is of individual concern to the applicant (see paragraph 46 above). 74 To begin with, the applicant's argument that the German Government's notification to the Commission of Paragraph 18(1) of the Finance Law 1996 concerned, in addition to a general aid scheme, a specific aid for the applicant, so that the contested decision itself had two subjects (see paragraphs 66 and 67 above), must be rejected. As the applicant concedes, the German Government had by its communication of 19 December 1995 (see paragraph 6 above) notified a provision amending Paragraph 3 of the InvZulG, which constituted a general aid scheme. That notification was not subsequently amended by the German Government. In particular, its observations of 9 September 1996 cannot be interpreted as having had the object or effect of making a supplementary notification of a specific aid for the applicant. In those observations the German Government clearly continues to seek approval of the aid scheme as notified in December 1995, while attempting to show that in practice it will benefit only the applicant. 75 Next, it is settled case-law that persons other than the addressees of a decision may claim to be individually concerned only if the decision affects them by reason of certain attributes peculiar to them or by reason of factual circumstances differentiating them from all other persons and, as a result, distinguishing them individually in like manner to the person addressed (Plaumann, at 107, and Cofaz, paragraph 22; Case T-266/94 Skibsværftsforeningen and Others v Commission [1996] ECR II-1399, paragraph 44, Joined Cases T-132/96 and T-143/96 Freistaat Sachsen and Others v Commission [1999] ECR II-3663, paragraph 83, and Case T-69/96 Hamburger Hafen- und Lagerhaus and Others v Commission [2001] ECR II-1037, paragraph 35). 76 In the present case, it is apparent from the documents in the case (and is common ground) that Paragraph 18(1) of the Finance Law 1996 constitutes a tax provision of general application. 77 Because it prohibits generally the application of such a provision, the contested decision, although addressed to a Member State, has the appearance, as regards the potential beneficiaries of that provision, of a measure of general application covering situations which are determined objectively and entailing legal effects for a class of persons envisaged in a general and abstract manner (Case T-86/96 Arbeitsgemeinschaft Deutscher Luftfahrt-Unternehmen and Hapag-Lloyd v Commission [1999] ECR II-179, paragraph 45). The applicant itself acknowledges that other investors could benefit from the extension of the period for carrying out investments qualifying for the 8% premium (see paragraph 68 above) and that, following the contested decision, the premium had had to be reclaimed in a number of cases (see paragraph 71 above). 78 However, notwithstanding those findings, the contested decision cannot be regarded as affecting the applicant solely by virtue of its objective capacity as a potential recipient of the investment premium, in the same manner as any other operator who is, or might be in the future, in the same situation (Piraiki-Patraiki, paragraph 14, and Joined Cases 67/85, 68/85 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219, paragraph 15). There are a number of factors which place the applicant in a situation which differentiates it from all other operators. 79 The Court notes, first, that the applicant's investment project undoubtedly qualified for the 8% premium and the Commission, by its decision of 30 June 1993, had expressly declared the grant of an aid package in support of the project - including aid of DEM 360 000 000 as investment premium - to be compatible with the common market. It is common ground that it was not possible to complete the project before 1 January 1997, as required by Paragraph 3(3) of the InvZulG in its 1993 version, because of unforeseen circumstances beyond the applicant's control. It is also agreed that the applicant's investment project was not altered in character or extent during the additional period of two years introduced by Paragraph 18(1) of the Finance Law 1996, and that the extension allowed it to benefit from the 8% premium without involving any change whatsoever in the intensity of the various items of aid. 80 Next, it is clear from the documents in the case, in particular the contested decision (see point III of the decision), that the adoption of Paragraph 18(1) of the Finance Law 1996 was prompted inter alia by the particular features of the applicant's situation mentioned above. 81 Moreover, during the administrative procedure, the applicant's particular situation was the subject not only of written observations of the German Government and the applicant's parent company but also of detailed discussions between the German Government and the Commission. 82 Furthermore, the German Government proposed to the Commission that it would apply Paragraph 18(1) of the Finance Law 1996 to the applicant only and would individually notify any other cases in which that provision was applied. In the contested decision the Commission expressly considered that proposal and gave the reasons why it could not be accepted. 83 It is thus evident that, contrary to the Commission's suggestions in its pleadings, the applicant's case was not considered merely as an example of a large industrial project covered by the aid scheme in question. 84 Finally, it can be seen from the contested decision that the Commission, which had already approved the scheme of the 8% investment premium (see paragraph 3 above) and declared the grant of an aid package for the Leuna 2000 project - including aid of DEM 360 000 000 as investment premium - to be compatible with the common market (see paragraph 4 above), was willing to look for a solution to the applicant's case. It appears from the decision and from the Commission's statements at the hearing that the obstacle to such a solution was the alleged inability of the German Government to ensure that the extension of the period for carrying out investment projects would benefit only the applicant. In other words, the alleged impossibility of singling out the applicant's case at national level, with respect to the application of Paragraph 18(1) of the Finance Law 1996, was an important element of the contested decision. 85 The applicant is thus individually concerned by the contested decision. The action must therefore be declared admissible. Substance 86 In support of its application, the applicant raises several pleas in law which may be grouped as follows: a first plea alleging breach of Article 92(2)(c) of the Treaty and failure to state reasons, a second plea alleging breach of Article 92(3) of the Treaty, a third plea alleging breach of the principle of proportionality, a fourth plea alleging breach of Article 93(1) of the Treaty and, finally, a fifth plea alleging failure to state reasons. Despite the heading of the second plea, which refers exclusively to Article 92(3) of the Treaty, the applicant's argument in fact aims to show, more generally, an infringement of Article 92 of the Treaty. This plea should therefore be described as alleging breach of Article 92. 87 The second and third pleas in law will be examined together first. Second and third pleas: breach of Article 92 of the Treaty and the principle of proportionality Arguments of the parties 88 By the plea alleging breach of Article 92 of the Treaty, the applicant criticises the Commission, in the first place, for classifying as additional State aid the extension of the period for carrying out investments qualifying for the 8% investment premium. It says that the effect of the extension was only to maintain rights which were in danger of lapsing because of the delay in completing especially complex investment projects. 89 It submits that the group of potential beneficiaries of Paragraph 18(1) of the Finance Law 1996 was already fixed when that provision was adopted, so that the extension could not benefit investors who had not been entitled to the 8% premium under the 1993 version of the InvZulG. It notes that, in accordance with Paragraph 6(1) of the InvZulG, the application for the premium had to be made before 30 September of the calendar year following the financial year in which the investment was completed, payments on account were made or part of the cost of construction borne. It says that since the investor had to have started carrying out his investment project before 1 July 1994, he had necessarily already ordered some work or had some work done by that date, and thus made payments on account or borne some costs of construction during 1994. He must, consequently, have applied for the investment premium before 30 September 1995. At the hearing, the applicant submitted that if an investor decided not to apply for the premium for a given year before 30 September of the following year, he was no longer allowed to do so later. On the other hand, it conceded that an investor who had started to carry out his project within the prescribed period and had not applied for the premium before 30 September 1995 for investment carried out in 1994 could theoretically, on the basis of the InvZulG as amended, have obtained an investment premium, for example, for work done in 1997 if he had applied before 30 September 1998. 90 Finally, the applicant observes that, in any event, the amendment to the InvZulG did not introduce any additional State aid in its particular case. 91 In the second place, it submits that the Commission infringed Article 92 of the Treaty by considering that the extension of the period for completing investments qualifying for the 8% premium introduced operating aid. 92 The investment premium manifestly had all the characteristics of investment aid, as defined by the Community judicature in its case-law and by the Commission in its communications on the method for the application of Article 92(3)(a) and (c) of the Treaty to regional aid (OJ 1988 C 212, p. 2) and on regional aid systems (OJ 1979 C 31, p. 9). According to the applicant, such investment aid cannot - at least in its particular case - have become operating aid merely because of the extension of the period for carrying out investments. It points out that the extension did not involve any additional payment of money to it and that the 8% premium was due to it by virtue of the decisions of 30 June 1993 and 25 October 1994, regardless of the date of completion of its project. Finally, it submits that, as regards that project, the extension does not alter the potential distortion of competition linked to the 8% premium, which was declared compatible with the common market by the Commission in those decisions. 93 The applicant adds that the Commission described the German Government's position incorrectly when it said, in the contested decision, that in its communication of 19 December 1995 the Government explained that the extension of the period for carrying out investments was intended as operating aid for increasing the equity of the undertaking concerned. 94 In the third place, the applicant submits that the Commission infringed Article 92(3)(a) of the Treaty by ruling out the application of that provision on the ground that the eastern German economy would not be the only beneficiary of the aid. It notes that under Paragraph 1(2) of the InvZulG the investment projects must be carried out in the new Länder, the premium is necessarily tied up in the capital of the plants in that region, and the extension of the period for investment makes no difference in this respect. It disputes the relevance of the Commission's argument that the aid could be used to finance activities outside the new Länder, by saying that it is immaterial if an undertaking, after completing an investment project and receiving aid for that project, uses the aid in another plant. 95 The Commission submits, in the first place, that Paragraph 18(1) of the Finance Law 1996 introduced additional State aid. 96 It argues, first, that that provision enabled undertakings which had started an investment project within the prescribed period but had not, at that time, claimed the 8% investment premium because they knew that they would not be able to complete the project before 1 January 1997 to benefit from that premium. 97 It challenges the applicant's interpretation of Paragraph 6(1) of the InvZulG. It submits that the application for the 8% investment premium did not necessarily have to be made before 30 September 1995, since the investor could wait until 30 September of the year following the financial year during which the investment project was completed before claiming the premium. As a result of the adoption of Paragraph 18(1) of the Finance Law 1996, an investor who completed his project in 1998 could then apply, for the first time, for the investment premium covering the years 1994 to 1998. 98 The Commission submits, next, that the amendment to the InvZulG entailed a relaxation of the conditions for the grant of the 8% premium. More particularly, it had the effect of eliminating the risk, for an investor who had taken the decision to invest in the expectation of benefiting from that premium, of not being able to complete the investment project within the original time-limit. 99 It also submits, in the defence, that since Paragraph 4 of the InvZulG defines the basis of calculation of the 8% premium as the sum of the costs of acquisition and production of the qualifying investments completed in the financial year, an undertaking could have received the premium for the additional investments made during the two years' extension. 100 It observes, finally, that the amendment to the InvZulG introduced by Paragraph 18(1) of the Finance Law 1996 itself amounted to altering aid within the meaning of Article 93(3) of the Treaty, thus requiring the Commission to be informed and to take a decision. 101 In the second place, the Commission refers to point IV of the contested decision to show that the extension of the period for carrying out investments constitutes operating aid. 102 In the third place, it says that the extension could have benefited undertakings located outside the assisted regions, since it did not promote additional investment. 103 By the plea alleging breach of the principle of proportionality, the applicant criticises the Commission for not excluding its particular case from the declaration of incompatibility with the common market and for not exempting it from the obligation to repay the aid granted under Paragraph 18(1) of the Finance Law 1996. 104 It points out, first, that in its decision of 30 June 1993 the Commission had already approved a package of aid for the Leuna 2000 project, including DEM 360 000 000 as 8% investment premium. The lawfulness of that aid package did not depend determinatively on the fact that the work had to be completed by 31 December 1996. It says that the Commission had no objection of principle, from the point of view of the Community rules on State aid, with respect to the application of Paragraph 18(1) of the Finance Law 1996 to its particular case. 105 The applicant submits, next, that the contested decision refers in several places to its particular situation, that the German Government had stated that Paragraph 18(1) of the Finance Law 1996 had been adopted because of the Leuna 2000 project, and that the German and French Governments and Elf had clearly explained during the administrative procedure that that project had a number of special features which distinguished it from other undertakings which might benefit from that provision. It recalls the proposal made to the Commission by the German Government during the administrative procedure (see paragraph 81 above) and observes that, by letter of 25 September 1997, it submitted to the Commission an alternative draft of the operative part of the contested decision which would have made it possible for its particular case to be covered within a general declaration. 106 In those circumstances, according to the applicant, the Commission could not restrict itself to a general, abstract analysis of Paragraph 18(1) of the Finance Law 1996, but had also to make a separate decision on its particular case. It considers that, by rejecting the German Government's proposal and adopting a general declaration of incompatibility, the Commission took a measure that was disproportionate to the aim pursued and unnecessarily imposed a substantial financial burden on it. 107 The applicant submits that no procedural reason prevented the Commission from dealing separately with its particular case. It says that the solution put forward by the German Government would have been legally possible and would not have raised difficulties at administrative level. In particular, the Commission cannot object that it was impossible in German law to adopt a federal law to cover the applicant's case alone. The adoption of an individual law is unlawful only in the case referred to in the first sentence of Article 19(1) of the German Basic Law, namely where it restricts a fundamental right, and not where, as in the present case, it creates a right. 108 The Commission denies that it disregarded the principle of proportionality. 109 It observes, to begin with, that the German Government notified it only of a general aid scheme, so that it was unable for procedural reasons to treat the applicant's case separately. It considers that if the Government had intended it to rule at the same time on a specific aid for the applicant, it would have had to notify such aid separately, or else change its original notification into a notification of a specific aid plan. 110 The Commission submits, next, that Paragraph 18(1) of the Finance Law 1996 did not have the character of an individual provision. It notes that the German Government had itself stated, moreover, that it was not possible for legal reasons to enact a federal law to cover the applicant's case alone, and asserts that it was not for it to ascertain whether that statement was correct. 111 As to the reasons why the solution suggested by the German Government could not be accepted, it refers to the last three paragraphs of point IV of the contested decision. It states essentially that Paragraph 18(1) of the Finance Law 1996 had already entered into force and constituted a general measure which could be relied on automatically by any investor who satisfied its objective conditions. 112 Finally, the Commission considers that, in any event, the particular situation of the applicant did not justify a derogation in the contested decision. The applicant has not shown, with reference to its project, either that the extension of the period for completion of investments qualifying for the premium caused it to make additional investments in the assisted regions or that the extension did not introduce operating aid. Findings of the Court 113 It must be noted to begin with that the object of Article 92 of the Treaty is to ensure that competition in the internal market is not distorted (see Article 3(g) of the EC Treaty (now, after amendment, Article 3(1)(g) EC)). Article 92(1) of the Treaty declares that State aid which distorts or threatens to distort competition is incompatible with the common market in so far as it affects trade between Member States. 114 It must also be observed that, where the Commission enjoys substantial freedom of assessment, as it does when applying Article 92 of the Treaty, the Community judicature, in reviewing whether that freedom was lawfully exercised, cannot substitute its own assessment for that of the competent authority but must restrict itself to examining whether that authority's assessment is vitiated by a manifest error or misuse of powers (Case C-169/95 Spain v Commission [1997] ECR I-135, paragraph 34, and Case C-288/96 Germany v Commission [2000] ECR I-8237, paragraph 26). 115 Moreover, the principle of proportionality requires that the measures adopted by Community institutions do not go beyond what is appropriate and necessary for attaining the objective pursued and where there is a choice between several appropriate measures the least onerous measure must be used (Case 15/83 Denkavit Nederland [1984] ECR 2171, paragraph 25, and Case T-55/99 CETM v Commission [2000] ECR II-3207, paragraph 163). 116 It should be observed, finally, that the fact that, formally, the Commission has been notified of an aid scheme does not prevent it from examining its application in a particular case, as well as making a general and abstract examination of the scheme. Similarly, in the decision it adopts following its examination, the Commission can consider that some specific applications of the aid scheme notified constitute aid while others do not, or can declare certain applications only to be incompatible with the common market. In the exercise of its wide discretion, it may differentiate between the beneficiaries of the aid scheme notified by reference to certain characteristics they have or conditions they satisfy (see, for example, Commission Decision 2000/394/EC of 25 November 1999 on aid to firms in Venice and Chioggia by way of relief from social security contributions under Laws Nos 30/1997 and 206/1995 (OJ 2000 L 150, p. 50)). 117 In the present case, the Commission could not confine itself to carrying out a general, abstract analysis of Paragraph 18(1) of the Finance Law 1996, but was also obliged to examine the specific case of the applicant. Such an examination was required not only in view of the particular features of the applicant's investment project (see paragraph 79 above) - of which the Commission was fully aware - but also because, during the administrative procedure, the German Government had expressly asked for that to be done. 118 The Commission cannot object in this respect that Paragraph 18(1) of the Finance Law 1996 had already entered into force and constituted a general provision which could be relied on automatically by any investor who satisfied the objective criteria for its application. It would have been for the Federal Republic of Germany to adopt, if necessary, all the legislative and administrative measures needed to implement the Commission's decision. It would have been for that State to deal with any difficulties arising from its late notification of the aid scheme in question. 119 The arguments of the parties must be considered in the light of those principles and findings. 120 In the contested decision, the Commission considered, first, that the extension of the period for completion of investments qualifying for the 8% premium introduced by Paragraph 18(1) of the Finance Law 1996 constituted additional State aid for undertakings which made investments in the new Länder. It stated, next, that that aid did not promote any additional investment and consequently had to be regarded as operating aid intended to increase the capital of the undertakings concerned. It ruled out, finally, the possibility of applying the derogation in Article 92(3)(a) of the Treaty, in particular on the ground that the operating aid would not benefit only the economy of the new Länder. According to the Commission, undertakings which meet the conditions may also maintain plant elsewhere and could thus use the aid to finance activities outside eastern Germany. 121 The documents in the case and the Commission's explanations at the hearing show that to reach those conclusions the Commission distinguished two different categories of potential beneficiaries of the aid measure in question. 122 The first category consists of the undertakings which had decided to carry out investment projects in the new Länder in reliance on the 8% investment premium, had started the projects between 1 January 1993 and 30 June 1994 and applied in good time for part payments of the premium, but, contrary to their original expectations, were in the end unable to complete their projects before 1 January 1997. In the contested decision the Commission states, in this respect, that undertakings which have taken investment decisions regarding the 8% investment premium without allowing time for investment-related risks have accepted investment aid which turns out to be potentially lower than if they had met the requirements laid down in the [InvZulG], and despite those risks have regarded their investment as profitable. It says that the extension of the time-limit does not generate any extra investment and will probably have no effect on the termination of investment projects already begun. On being asked by the Court at the hearing to explain in more detail, the Commission stated that, with respect to undertakings in the first category, Paragraph 18(1) of the Finance Law 1996 introduced additional State aid by eliminating the risk for those undertakings of not completing their investment projects within the time-limit. 123 The second category consists of the undertakings which likewise started to carry out investment projects in the new Länder between 1 January 1993 and 30 June 1994, but did not apply for the 8% investment premium before the adoption of Paragraph 18(1) of the Finance Law 1996, because they knew that they would not be able to complete their projects before 1 January 1997. The Commission submits that as a result of the two-year extension introduced by that provision those undertakings could now claim the investment premium. The premium constituted not an encouragement to make further investments but a windfall profit for undertakings which had originally calculated their investment in such a way that it would be profitable even without such aid. It should be said that at the hearing the applicant admitted that, theoretically, an undertaking which had started to carry out an investment project within the time-limit but had not applied for the 8% investment premium before the adoption of Paragraph 18(1) of the Finance Law 1996 could, following the enactment of that provision, have obtained the premium for the work done in 1997 by presenting a first application for the premium before 30 September 1998 (see paragraph 89 above). It thus acknowledges that that provision could produce a windfall profit for some undertakings. 124 However, the Commission places the applicant in the first category of undertakings. There is therefore no need, in the present case, to rule on the correctness of the definition of the second category, nor, consequently, on the parties' differing interpretations of Paragraph 6(1) of the InvZulG (see paragraphs 89 and 97 above). 125 As far as the applicant is concerned, Paragraph 18(1) of the Finance Law 1996 manifestly introduced no additional aid, and hence no operating aid. 126 The documents in the case show that the applicant did not embark on the Leuna 2000 project while taking the risk of not being able to complete it before 1 January 1997, the date referred to in Paragraph 3(3) of the InvZulG in the 1993 version. Besides the fact that it allowed a certain margin of time for completing the project - it was originally to be finished in July 1996 -, it must be pointed out that the delay which occurred resulted from circumstances completely outside its control which it should not necessarily have envisaged when it took the decision to invest. It cannot thus be presumed that the applicant regarded its investment project as profitable even without the 8% premium. 127 Nor could the Commission conclude that there was any other additional State aid in favour of the applicant. In particular, the Commission, which knew from the outset the precise nature and extent of the applicant's investment project and the amount and intensity of the various aids granted for that project (see inter alia the decision of 30 June 1993), could not but find that those factors remained wholly unchanged by the extension for two years of the period for completion of investments qualifying for the 8% premium. 128 Finally, with respect to the Commission's argument, founded on the basis of calculation of the investment premium, that the extension allowed an undertaking to receive the premium for investments made during the two years' extension (see paragraph 99 above), it must be observed that this completely contradicts its assertation that the extension did not encourage any additional investment. Moreover, under Paragraph 3(3) of the InvZulG (in the original and amended versions), implementation of the investment project had to have started - and its extent therefore already be defined - between 31 December 1992 and 1 July 1994. With respect more particularly to the applicant, it is apparent from the documents in the case and the explanations it provided at the hearing that, before its implementation, its project had been precisely defined and had been the subject of detailed discussions both with the German authorities and with the Commission (see inter alia the decision of 30 June 1993). 129 In any event, even supposing that Paragraph 18(1) of the Finance Law 1996 introduced additional State aid for the applicant too, there was no justification for declaring that aid incompatible with the common market in the applicant's case. It must be pointed out, first, that not only had the Commission raised no objection to the system of the 8% investment premium, it had actually expressly declared the grant of an aid package for the Leuna 2000 project - including DEM 360 000 000 as investment premium - to be compatible with the common market under Article 92(3) of the Treaty, and, second, that the mere extension of the period for carrying out the investment project was not capable of altering the nature and scope of the project or the amount and intensity of the aid package. In those circumstances, the Commission had no reason to suppose that the extension was such as to distort or threaten to distort competition, at least to a greater extent than the Leuna 2000 project originally notified, so as to make it incompatible with the common market. 130 It follows from the foregoing that, as far as the applicant was concerned, the Commission should have considered that Paragraph 18(1) of the Finance Law 1996 did not introduce additional State aid, or, at the least, that the additional aid introduced was compatible with the common market. 131 By failing to do so, and concluding instead, in all cases, that the provision introduced additional State aid, by declaring that aid incompatible with the common market, and by requiring the repeal of that provision, the Commission infringed Article 92 of the treaty and the principle of proportionality. 132 The second and third pleas in law are consequently well founded. The contested decision must therefore be annulled in so far as it concerns the situation of the applicant, without there being any need to rule on the applicant's other arguments in support of those pleas or on its other pleas. Decision on costs Costs 133 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. Since the Commission has been unsuccessful, it must be ordered to bear the applicant's costs in addition to its own, as applied for by the applicant. Operative part On those grounds, THE COURT OF FIRST INSTANCE (Fifth Chamber, Extended Composition) hereby: 1. Annuls Commission Decision 98/194/EC of 1 October 1997 concerning the extension of the 8% investment premium for investment projects in the new Länder pursuant to the Finance Law 1996 in so far as it concerns the situation of the applicant; 2. Orders the Commission to bear its own costs and to pay those incurred by the applicant.

Mr. Justice Moore-Bick : Background The claimant in this case, Friends Provident Life and Pensions Ltd, is the purchaser of the business, and successor to the rights and obligations, of London & Manchester Assurance Co. Ltd ("LMA"). The defendants are insurance companies which provided professional indemnity insurance to LMA for the period 1st February 1993 to 31st January 1994. LMA's professional indemnity insurance for the 1993-94 year took the form of a primary layer providing cover in respect of losses of up to £1 million any one claim and in the aggregate (subject to various deductibles) and an excess layer providing cover of £4 million in excess of £1 million any one claim and in the aggregate. The primary layer was underwritten by Syndicate No. 657 at Lloyd's through an agent, Resource Underwriting Ltd. The first excess layer was underwritten in part by a group of Lloyd's Syndicates, including Syndicate 657, and in part by the defendants, all of whom were members of the London companies' market. Both layers were placed by the brokers Bowring Marsh & McLennan Ltd ("Bowrings") and were written on a "claims made" basis, that is, the policies were expressed to provide an indemnity against losses arising from claims made against the insured during the period of the policy. The business of LMA included giving financial advice to individuals in relation to personal pension plans. On 28th January 1994 in the context of negotiations for the renewal of cover for the year beginning 1st February 1994 Mr. Harvey, the Legal Services Manager of LMA, wrote to Lloyd's underwriters at the address of Bowrings in Exeter in the following terms: "I confirm that after due enquiry I know of no circumstances likely to give rise to a claim under the Group's Professional Indemnity Policy save as follows:- 1. Matters which are currently under investigation but are not likely to exceed the deductible under the policy. 2. Pensions Transfers and Opt Outs which are a matter of public record and relate to all pensions providers. Detailed investigation will be conducted into pensions related transactions in accordance with any SIB/LAUTRO guidelines and notification of any potential claims given to underwriters in the usual way." The reference to "pensions transfers and opt-outs" was a general reference to LMA's involvement in giving financial advice to employees who were considering whether to transfer from, (or, in the case of new employees, opt out of), private pension schemes run by their employers in favour of personal pension plans available in the market. By the latter part of 1993 the regulatory bodies had expressed concern that the advice given to many clients by their financial advisers was inadequate and had led to what was later to become known as "pension mis-selling". They had already indicated their intention to conduct an investigation, but its precise nature and scope had yet to be determined. In the event, as a result of those investigations LMA was required to pay sums totalling over £9 million to various clients by way of compensation. Clause 2 of the General Conditions forming part of the primary layer policy obliged the insured to notify the underwriters as soon as possible of any circumstances that might give rise to a claim. It also provided that any claim arising from circumstances notified to the insurers in accordance with that clause should be deemed to have been made during the period of the policy. Accordingly, the claimant sought to recover its loss from the underwriters for the 1993-94 year on the grounds that, although the claims themselves had not been made during that year, they arose out of the circumstances described in Mr. Harvey's letter of 28th January 1994 and were therefore to be treated as having occurred during the period of cover. The Lloyd's Syndicates have accepted liability in respect of those claims, both under the primary and excess layer policies, but the defendants have declined to do so on the grounds (among others) that their policies only cover claims actually made within the policy period and that even if they do extend to claims arising out of circumstances notified during the policy period, LMA failed to notify them of any such circumstances within that time. By orders made on 25th February 2004 and 30th April 2004 directions were given for the trial of a number of preliminary issues relating to the construction and effect of the excess layer policies. Before identifying those issues, however, it is necessary to set out the material terms of the various policies. The policies The material parts of the primary layer policy provided as follows: "Now we, the underwriters, to the extent and in the manner hereinafter provided, hereby agree:- 1. To indemnify THE ASSURED against any claim or claims first made against them during the period of insurance set forth in the First Schedule in respect of any Civil Liability whatsoever or whensoever arising . . . . . . . . . . . . . . . . . . . . . . . . . . . EXCLUSIONS The Policy shall not indemnify THE ASSURED against any claim or loss:- . . . . . . . . . . . . . . . . . . . . 2. Arising out of any circumstances or occurrence . . . . . . . . which were known to THE ASSURED prior to the inception of this Policy . . . . . . . . . . . . . . . . . . . . GENERAL CONDITIONS . . . . . . . . . . . . . . . . . . . . 2. THE ASSURED shall as a CONDITION PRECEDENT to their right to be indemnified under this Policy give to the Underwriters notice as soon as possible during the period of this policy as set forth in the Schedule:- 2.1 Of any circumstance of which THE ASSURED shall become aware which may give rise to a claim or loss against them or any of them. 2.2 Of the receipt of notice from any person whether written or oral of an intention to make a claim against them or any of them. . . . . . . . . . . . . . . . . . . . . Such notice having been given to Underwriters THE ASSURED shall give to the Underwriters as soon as possible full details in writing of the circumstances which may give rise to a claim or loss against them or any of them. Any claim or loss to which that circumstance has given rise which is subsequently made after the expiration of the period specified in the First Schedule shall be deemed for the purposes of this Policy to have been made during the subsistence hereof." The leading excess layer policy was underwritten by the Lloyd's Syndicates and was known as the 'Co-insurance policy' because it was referred to by that name in each of the other excess layer policies. It incorporated a set of clauses known as the A W G S Excess Wording which provided as follows: "To indemnify the Assured for claim or claims which may be made against the Assured during the period of insurance . . . . ." and contained the following clauses: "1. Liability to pay under this Policy shall not attach unless and until the Underwriters of the Underlying Policy/ies shall have paid or have admitted liability or have been held liable to pay, the full amount of their indemnity. 2. It is a condition of this Policy that the Underlying Policy/ies shall be maintained in full effect during the currency of this Policy. 3. If by reason of the payment of any claim or claims by the Underwriters of the Underlying Policy/ies during the period of this Insurance the amount of indemnity provided by such Underlying Policy/ies is:- (a) Partially reduced, then this Policy shall apply in excess of the reduced amount of the Underlying Policy/ies for the remainder of the period of insurance; (b) Totally exhausted, then this Policy shall continue in force as Underlying Policy until expiry hereof. . . . . . . . . . . . . . . . . . . . . 5. Any claim(s) made against the Assured or the discovery by the Assured of any loss(es), or any circumstances of which the Assured becomes aware during the subsistence hereof which are likely to give rise to such a claim or loss, shall, if it appears likely that such claim(s) or loss(es) may exceed the indemnity available under the Policy/ies of the primary and Underlying excess Insurers, be notified immediately by the Assured in writing to the Underwriters hereon. . . . . . . . . . . . . . . . . . . . . 7. Except as otherwise provided herein this policy is subject to the same terms, exclusions, conditions and definitions as the Policy of the primary Insurers. No amendment to the Policy of the primary during the period of this Policy in respect of which the primary Insurers require an additional premium or a deductible shall be effective in extending the scope of this Policy until agreed in writing by the Underwriters." The first to fourth defendants' proportions of the excess layer cover was written on the policy form issued by the London Insurance & Reinsurance Market Association Ltd ("LIRMA"). It described the interest insured as "Excess Professional Indemnity Insurance in accordance with the Policy referred to in the Coinsurance Clause below." The Coinsurance Clause provided as follows: "It is warranted that this Policy shall run concurrently with and be subject to the same terms, provisions and limitations as are contained in Policy No. 509/QF404093 issued by certain Lloyd's underwriters covering the identical subject matter and risk." The fifth defendant issued its own policy by which it agreed to indemnify the claimant against "Loss as more fully set forth in the Policy detailed in the said Schedule covering the identical subject matter and risk (hereinafter called the "Co-insuring Policy") . . . . . . Provided that:- (1) . . . . . . . . . (2) the Policy shall be subject to the same terms, provisions, conditions and limitations as are contained in the Co-insuring Policy." The Co-insuring Policy was identified in the schedule as Lloyd's Policy No. 509/QF404093. Thus each of the defendants' policies purported to incorporate the terms of the Co-insurance policy which, by virtue of clause 7 of the A W G S Excess Wording, purported in turn to incorporate the terms of the primary layer policy. The preliminary issues Directions were given for the trial of the following preliminary issues: 1. Whether the cover provided under the excess policies:- (1) included the extension of cover contained in General Condition 2 of the primary policy in respect of claims made after the policy period arising out of circumstances notified within the policy period; or (2) Only provided cover in respect of claims made within the policy period. 2. Whether, in the event that cover provided under the excess policies included the extension of cover referred to above:- (1) The notice required in order to extend cover to the claims arising out of the circumstances thus notified had only to be given to the insurers subscribing to the primary policy; or (2) It was necessary for such notice to be given to the insurer on the particular policy in the excess layer in question. 3. Whether the provision of Schedule 1 to the primary policy identifying Bowring as the person to whom claims were to be notified was incorporated, expressly or by implication, into the excess policies with the result that, in the event that the excess policies incorporated the extension of cover referred to above but that the relevant notice needed to be given within the policy period to the insurers subscribing to the excess policies, this requirement was satisfied by the giving of notice to Bowring. 4. Whether LMA's letter of 28th January 1994 constituted notice of the circumstances identified therein to (1) the insurers subscribing to the primary policy; and (2) the insurers subscribing to the excess policies. 5. In the event that cover provided under the excess policies included the extension of cover referred to above and the requisite notice of the relevant circumstances was given within the policy period, what (if any) further requirements as to the giving of notice were imposed on LMA by (1) General Condition 2 of the primary policy (to the extent that it was incorporated into the excess policy); and/or (2) Clause 5 of the Co-insuring policy. 6. Whether any such further requirements as to the giving of notice as may be identified in answer to question 5 above was (1) a condition precedent to liability under the excess policies; (2) an innominate term, breach of which might if sufficiently serious excuse the insurers subscribing to the excess policies from liability; or (3) a term breach of which gives rise to a right to damages only. 7. Without prejudice to the above, whether, on the true construction of the excess policies, the provisions of the excess policies extend to claims in respect of which the claimant seeks an indemnity. 8. Whether, in the event that clause 5 of the Co-insuring policy is an innominate term and assuming that LMA (or the claimant) has committed a repudiatory breach of clause 5 by failing to notify claims to the defendants in accordance with its provisions (1) the defendants have a defence to the claims the subject of such repudiatory breach irrespective of whether or not they have accepted such breach; or (2) the defendants have a defence to the claims the subject of such repudiatory breach provided that they have accepted such breach; or (3) the defendants have a defence to the claims the subject of such repudiatory breach provided that they have accepted such breach and that the losses the subject of such claims occurred after such acceptance. Issue 1: Do the excess policies cover claims arising out of any circumstances notified to the underwriters during the policy period? It is now well established that when construing commercial documents of this kind it is important to have regard to all the background knowledge reasonably available to the parties at the time: see Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 per Lord Hoffmann at page 912. In the present case it was not in dispute that among the background knowledge available to the parties was the general practice of the insurance market in relation to the underwriting of professional indemnity risks and the insuring of large risks by means of primary and excess layer policies. Two aspects of that practice, as described by Mr. Carey who gave evidence for the claimant, are relevant to the present dispute. The first concerns the practice of the market in relation to liability insurance. It is now almost invariable for liability underwriters in general, and professional negligence underwriters in particular, to issue policies that provide cover on what is known as a "claims made" basis, that is, which provide the insured with an indemnity against losses arising from claims made against him, as opposed to events occurring, during the policy period. This has an advantage for underwriters in that they are less exposed to unforeseen losses arising long after the period of cover has expired, but it poses a serious problem for any insured who becomes aware during the policy period of circumstances that may give rise to a claim in the future. When seeking insurance for the following year he would be bound to disclose the existence of any circumstances, but might well find it impossible to obtain insurance in respect of that potential loss at a commercially acceptable premium, if indeed at all. As a result the practice has grown up of including in "claims made" policies a term extending cover to losses arising from circumstances that may give rise to a claim in the future provided that they have been notified to the underwriters during the period of cover. So significant are these factors that in J. Rothschild Assurance Plc v Collyear [1999] 1 Lloyd's Rep. I. R. 6, 22 Rix J. expressed the view that a "claims made" policy could hardly work on any other basis. Mr. Hancock suggested that Rix J. put the matter too high, but having regard to the current practices of the market I do not think that he did and I respectfully endorse his view. It is worth noting that the primary layer policy in this case expressly excluded liability in respect of any claim or loss arising out of any circumstances known to the insured prior to its inception. The second matter of background knowledge that was reasonably available to the parties at the time is that where substantial risks are covered by the use of primary and excess layers of insurance it is generally assumed in the market, in the absence of any indication to the contrary, that the scope of the cover provided under the excess layer is intended to be the same as that provided under the primary layer, apart, of course, from the individual policy limits. Although a material difference between the scope of the primary and excess layers might not render the cover wholly unworkable, the insured would inevitably bear a greater part of the risk himself if the scope of the cover provided by the excess layer were more limited than that provided by the primary layer. That is sufficiently unusual for there to be a broad assumption that the scope of the cover provided by the different layers is intended to be the same. With these matters of background in mind I turn to the policies themselves. Each of the policies issued by the defendants provided (albeit in slightly different language) that it was subject to the same terms as the Co-insurance policy which in turn provided that it was subject to the same terms as the policy of the primary insurers. In each case general words of incorporation were used and Mr. Hancock Q.C. was right, therefore, to remind me of the care that must be taken when seeking to determine which of the terms of the contract to which reference is made the parties can be taken to have intended to incorporate by the use of such general language. He submitted that General Condition 2 of the primary layer policy was not effectively incorporated into the Co-insurance policy, and therefore not into the other excess layer policies, for two principal reasons: first, because the parties can be taken to have intended only to incorporate those clauses that are germane to the risk and General Condition 2 is not of that kind; secondly, because General Condition 2 is inconsistent with the express terms of the excess policies. The first of these arguments is based on the fact that the bulk of the condition deals with the insured's obligation to notify the insurers of circumstances which may give rise to a claim, a matter which Mr. Hancock submitted was essentially collateral to the definition of the risk. In many cases it may well be appropriate to regard a notice clause as dealing with matters collateral to the risk, though where (as here) the giving of notice is expressed to be a condition precedent to the insured's right to be indemnified under the policy it differs little in its effect from a substantive limitation on the scope of cover. In the present case, however, the fact that the extension of cover is tucked away at the end of the clause tends to disguise its substantive effect. Mr. Hancock accepted that if the last sentence of General Condition 2 had formed a separate clause it would clearly be germane to the risk and would therefore have been apt for incorporation into the excess layer policies by general words of this kind. I am sure that is right, but it makes it impossible to reject the condition as a whole on the grounds that it is concerned only with matters collateral to the risk. Clearly it is not. I am therefore unable to accept that part of his submission. The next question is whether General Condition 2 is inconsistent with the express terms of the excess layer policies. Mr. Hancock submitted that it is inconsistent with the insuring clause in the Co-insurance policy which provides an indemnity only against claims made against the insured during the period of the insurance, but that fails to take account of the language of the condition itself or its obvious purpose. The insuring clause in the primary layer policy is worded in the same way and is itself sufficient to explain the terms of General Condition 2 whose purpose is both to impose certain obligations upon the insured coupled with restrictions on his right to obtain an indemnity and to extend the scope of cover. It achieves the latter object by deeming certain claims, which would otherwise fall outside the period of cover, as falling within it. The clause must therefore be understood as supplementing, rather than contradicting, the insuring clause and does not give rise to an inconsistency of the kind that would render it unsuitable for incorporation into the excess layer policies. Indeed, there are strong grounds for concluding that the parties to the excess layer policies intended that it should be incorporated into those contracts, since a failure to do so would give rise to the very difficulty for the insured to which I drew attention earlier. Mr. Hancock also submitted, however, that the provisions of General Condition 2 are inconsistent with clause 5 of the A W G S Excess Wording and it is certainly necessary to consider how these two clauses can be read together if General Condition 2 is incorporated into the excess layer policies. The question arises in a more acute form under issue 2, but since it has a direct bearing on the issue of incorporation it is necessary to consider it in this context. The final sentence of General Condition 2 forms an integral part of the clause as a whole; it assumes the existence of the preceding provisions from which it cannot easily be divorced. In my view it is therefore not possible to treat the final sentence as a separate clause for the purposes of incorporating it into the excess layer policies; either the whole clause is incorporated, or none of it is. The usual starting point when deciding whether a clause can be effectively incorporated by reference is to construe it as if it were written out in full in the contract into which it is said to be incorporated. It will then become apparent whether it makes sense in that context (with or without an acceptable degree of verbal manipulation) and whether it is consistent with the other clauses of the contract. If it does not, it must be rejected: see HIH Casualty and General Insurance Ltd v New Hampshire Insurance Co. [2001] EWCA Civ 735; [2001] 2 Lloyd's Rep 161. General Condition 2 contains provisions relating to the insured's obligation to notify the underwriters of any notice of intention to make a claim and of any circumstances which may give rise to a claim or loss. Not surprisingly, the insured is bound to notify the underwriters of any of these matters as soon as possible in order to inform them of a potential liability and to enable them to make appropriate arrangements for handling any claim if it has not already been made. The corresponding provisions of the excess layer policies are to be found in clause 5 of the A W G S Excess Wording. This reflects the different position and interests of the excess layer underwriters who will not be affected unless the loss ultimately exceeds the indemnity available under the primary layer policy. The insured is not required to notify them until it becomes apparent that that may happen. Moreover, unlike General Condition 2, clause 5 does not make compliance with its terms a condition precedent to the insured's right to recover under the policy. The question then is whether General Condition 2 can be read in the context of the excess layer policies in a way which makes sense and is not inconsistent with clause 5 of the A W G S Excess Wording. This depends on how one is to construe the word "underwriters" when reading the clause in the context of the excess layer policies. It is the question raised by the second of the preliminary issues to which it is convenient to turn at this point. Issue 2: Was notice to the primary layer underwriters sufficient to bring the claim within the excess layer policies? This issue turns on the construction of General Condition 2 and proceeds on the assumption that it is effectively incorporated into the excess layer policy. However, I think Mr. Hancock was right in saying that in reality it has a direct bearing on the issue of incorporation itself. Mr. Weitzman Q.C. submitted that it was sufficient for LMA to give notice to the underwriters of the primary layer policy of circumstances that might give rise to a claim in order to bring any subsequent claim within the excess layer policies. General Condition 2 simply requires that notice of the relevant circumstances be given to "the underwriters". In the context of the primary policy that expression can only mean the underwriters of that policy, but it does not follow that when read in the context of the excess layer policies it should still be read as referring to the primary layer underwriters rather than the excess layer underwriters. Mr. Hancock submitted that in the context of the excess layer policies the expression "the underwriters" naturally refers to the underwriters of the policy in question, that is, the relevant excess layer policy, not to the underwriters of the primary policy and as a matter of the ordinary use of language I think that is right, but there may be considerations pointing in another direction. Mr. Weitzman submitted that it should be read as referring to the primary layer underwriters because that is its meaning in the primary layer policy from which it was drawn and verbal manipulation was not permissible in this case, but that argument would only assist him if the clause referred in terms to "the primary layer underwriters", not simply to "the underwriters". The fact that words of a general nature take on a different meaning in a different context does not involve manipulation of any kind; it is simply the result of reading them in their new context. On the face of it, therefore, I would accept that if incorporated verbatim into the excess layer policies the clause would naturally require notice to be given to the excess rather than the primary layer underwriters. If General Condition 2 were incorporated into the excess layer policies without any manipulation at all, therefore, it would in my view be in conflict with clause 5 of the A W G S Excess Wording. That does provide an argument for rejecting its incorporation altogether, of course, despite the strong grounds for concluding that the parties intended to incorporate the extension of cover into the excess layer policies, but Mr. Weitzman submitted that to read the reference to "the underwriters" in the context of the excess layer policies as referring to the underwriters of those policies would lead to a result that is uncommercial and contrary to the intention of the parties. The main plank of his submission was that to construe the clause as referring to the excess layer underwriters would require the insured as a condition of its right to an indemnity to notify those underwriters of circumstances that might give rise to a claim (and give full details in writing as soon as possible) at a time when there might be no reason to think that the loss would exceed the indemnity available under the primary layer. That would be of no advantage to the excess layer underwriters since the handling of the claim would remain with the primary layer underwriters until cover was exhausted and would be contrary to the expectation of the market that notices of that kind will only be given to excess layers when there are grounds for thinking that their interests may be affected. Under General Condition 2 the provision of cover in respect of claims arising outside the period of the policy is dependent upon notification to the underwriters during the policy period of the circumstances which eventually give rise to them. From the point of view of the primary layer underwriters this limitation serves at least two valuable purposes: it provides a clear line of demarcation between losses attributable to different policy years and it enables them to make a provisional assessment of their potential liability and to take steps as necessary towards dealing with any claim that may emerge. The first of these would also be of interest to excess layer underwriters, but it is apparent from clause 5 of the A W G S Excess Wording that it is not information which they need to be given as soon as the insured becomes aware of circumstances that may give rise to a claim. As to the second, any assessment of potential exposure would necessarily be much more conjectural as far as the excess layer underwriters are concerned. Not only could they not know whether a claim would be made; it would often be impossible to tell from the nature of the information they received whether any claim was likely to exhaust the underlying layer. I am satisfied that there would be no practical difficulty in giving notice to the excess layer underwriters at the same time as it is given to the underwriters of the primary layer. Usually the insured will notify the broker who could without difficulty give notice to all interested underwriters at the same time. Mr. Carey's evidence suggests that the market would not normally expect the excess layer insurers to be notified of claims, or circumstances likely to give rise to claims, unless and until there is reason to think that the loss may exhaust the underlying layers, but that is no more than a general expectation. The insured's obligation in this respect is governed by the terms of the policy rather than by any market expectation. In the present case clause 5 of the A W G S Excess Wording reflects the market expectation which Mr. Carey described. In my view the key to this question is to be found in the nature of the relationship between the excess layer and the primary layer as set out in the A W G S Excess Wording. Clauses 1 and 2 of that wording oblige the insured to maintain the primary layer policy in effect during the currency of the excess layer policy and render liability under the excess layer policy dependent upon liability being established under the primary policy. If one ignores for a moment the final sentence of General Condition 2, one can see that the purpose of that clause is to ensure that the primary layer underwriters are informed at the earliest possible moment of any claim and of any circumstances that may give rise to a claim. However, the terms of clause 5 of the A W G S Excess Wording show that the excess layer underwriters are not concerned to receive such notification until it appears that their interest may be affected. That applies as much to claims actually made within the policy period as it does to circumstances that may give rise to a claim. In effect, the excess layer underwriters are content to leave it to the primary layer underwriters to handle the matter, no doubt because they have the assurance that the claim is subject to the terms of the underlying policy which to that extent operates for their benefit also and whose terms are, as far as appropriate, incorporated into their own policy. The effect of clause 3 of the A W G S Excess Wording is that when the primary layer is exhausted the excess layer "drops down" so as to become in effect the primary layer. In those circumstances it is important for the insured to retain cover against claims arising out of circumstances notified during the period of the policy and for the underwriters to obtain the benefits of prompt notification. It might not become apparent for some time whether the indemnity available under the underlying policy had been exhausted, but if that situation were to occur early in the life of the cover, the excess layer underwriters in their capacity as primary layer underwriters would no doubt wish to receive prompt notification of further claims and circumstances as provided for in General Condition 2. In my view these considerations, coupled with the strong presumption that the parties to the excess layer policies intended the scope of cover provided by them to be the same as that afforded by the primary layer, all point to the conclusion that the reference to "the underwriters" in General Condition 2 is to be construed as referring to the primary layer underwriters even when read in the context of the excess layer policies. Reading the clause in that way requires little manipulation and promotes the commercial object of the excess layer policies by defining the scope of cover under them by reference to the scope of cover under the primary layer policy and the obligations owed by the insured to the primary layer underwriters for the time being. The reference to "this policy" in the last sentence of General Condition 2 is quite capable on this basis of referring to the excess layer policy into which the clause as a whole has been incorporated. This construction also has the consequence that there is no conflict between General Condition 2 and clause 5 of the A W G S Excess Wording. Mr. Hancock objected that to read the clause in this way involves imposing an additional liability on the excess layer underwriters in respect of claims arising out of circumstances notified within the policy period without giving them the corresponding benefit of prompt notice of those circumstances, but in my view that is entirely consistent with the philosophy underlying the excess layer policy that whether a claim is to be treated as falling within the terms of the policy depends on whether it falls within the terms of the primary layer policy. If it does, the excess layer insurers are content to accept it as falling within the scope of the excess layer policy as well and do not require notice to be given to them unless and until it becomes apparent that their policy may be affected. For these reasons I am satisfied that it was the intention of the parties that General Condition 2 should be incorporated into the excess layer policies in order to provide the same scope of cover as afforded by the primary layer policy and that it can be incorporated so as to make sense in the context of those policies with only a modest and acceptable degree of verbal manipulation by construing the reference to "the underwriters" as a reference to the primary layer underwriters. I am satisfied, therefore, that General Condition 2 is effectively incorporated into the excess layer policies and that notice to the primary layer underwriters of circumstances that may give rise to a claim, if given within the period of the policy, is sufficient to bring any claim arising out of those circumstances within the scope of the excess layer policies. Issue 3: Was notice to Bowrings notice to the excess layer Insurers? In view of the conclusions to which I have come on issues 1 and 2 this issue does not arise in relation to the extension of cover, but since it was fully argued and since it may in any event arise in relation to other issues it is appropriate for me to express my view on it. It is necessary for present purposes to assume that the excess layer policy requires notice to be given to the excess layer underwriters of circumstances that may give rise to a loss if any resulting claim made after the end of the policy period is to be covered. In those circumstances notice would only be effective if given to the excess layer underwriters themselves or to an agent authorised to accept notice on their behalf. In the schedule to their policy the primary layer underwriters appointed Bowrings to accept notice of claims on their behalf and Mr. Weitzman submitted that that provision was incorporated into the excess layer policies. I am unable to accept that. The appointment of an agent to accept notice of claims is not a matter that is germane to the risk. It is purely a matter of administration in relation to which each set of underwriters may quite properly wish to make their own arrangements. Although as a matter of convenience the excess layer underwriters may be prepared to treat the insured's broker as their agent for this purpose, I can see no compelling reason why they should do so and no need therefore to construe the general words of incorporation as extending to this part of the primary layer policy. Notice to Bowrings, therefore, did not in my view constitute notice to the excess layer underwriters. Issue 4: Did the letter of 28th January constitute notice of the circumstances referred to therein to the primary and excess layer underwriters? There was some doubt about the precise scope of this issue, in particular whether it encompassed the question whether LMA's letter of 28th January 1994 was capable of amounting to notification of circumstances that might give rise to a claim. However, since that question lies at the heart of the dispute between the parties, and since both counsel were fully prepared to deal with it, I thought it right to hear argument on it. Mr. Hancock made two submissions in relation to the letter of 28th January: that it was not a notice of claims or potential claims at all; and that even if it was, it was not directed to the defendants. It is convenient to deal with the latter point first. The letter is addressed to Lloyd's Underwriters c/o Bowrings. On the face of it, therefore, it is not directed to the present defendants, all of whom are part of the companies' market. Mr. Weitzman recognised that difficulty, but he submitted that if notice could be given to Bowrings as agents for the excess layer underwriters, the letter could, and should, be construed as being addressed to them in their capacity as agents for those underwriters as well. Since I have already held that Bowrings were not appointed as agents to receive notification of claims and circumstances on behalf of the excess layer underwriters, nothing turns on this point. I should say, however, that having regard to the way it was addressed, I find it difficult to construe this letter as being directed either to Bowrings personally or to any insurers other than the relevant Lloyd's underwriters. I would hold that the letter was not directed to the defendants and it is common ground, for what it is worth, that they were not informed of its contents at the time, if at all. Mr. Hancock also submitted that the letter was not addressed to the underwriters for the then current policy year but to underwriters who were contemplating providing cover for the following year. There had been discussions a few weeks earlier between LMA, Bowrings and representatives of the primary layer underwriters concerning the renewal of the cover. Problems over pension mis-selling had surfaced only recently and the notes of those discussions show that one of the matters giving rise to concern was LMA's potential liability for losses arising out of pensions business in circumstances where it was still unclear what the regulatory bodies would require by way of investigation. Those discussions provide the background to the letter of 28th January in which LMA confirmed that it knew of no circumstances likely to give rise to a claim other than matters already under investigation and its involvement in pensions transfers and opt-outs which would be the subject of investigation in accordance with guidelines issued by the regulatory bodies. I think Mr. Hancock was right in saying that this letter was addressed to the prospective insurers for the 1994-95 policy year, but I do not think that prevented it from providing adequate notice of the matters to which it refers for the purposes of the current policy to the extent that the same underwriters were involved. What the insurers required was prompt notification of any circumstances that might give rise to a claim. Provided they were given the information required by General Condition 2 in a form that made it clear that they were being notified of circumstances that the insured thought might give rise to a claim, it was immaterial that the information was contained in a letter directed to renewal of cover. Since the prospective insurers at Lloyd's for the ensuing year were the same as for the expiring year, this letter was in my view capable of constituting notice to them of the circumstances described in it. Finally Mr. Hancock submitted that the letter was not a warning that claims might be forthcoming but an assurance that they would not and so did not amount to notification of circumstances that might give rise to a claim. The fact that the letter was addressed to the prospective insurers for the ensuing year inevitably meant that it was directed as much to the risk of claims being made during the period of that policy as to the notification of circumstances that might give rise to claims that would fall under the current policy. The two were directly related. I see no reason, therefore, why the same letter should not be capable of satisfying both objects where the same underwriters are involved. In my view the letter was both notification of circumstances that might give rise to a loss and an assurance that the insured was not aware of any other circumstances that might do so. The underwriters could therefore proceed on the basis that any claims arising out of those circumstances would fall within the expiring policy and could be excluded from the ensuing policy. Issue 5: Was the insured under any further obligation to give notice of claims or circumstances to the excess layer insurers? Issue 6: What is the nature of any such obligation? It is convenient to deal with these two issues together. It follows from what I have said already that the excess layer policy extended to claims arising out of circumstances notified by the insured to the primary layer underwriters during the policy year in accordance with the terms of General Condition 2. The insured was also obliged to give the primary layer underwriters as soon as possible full details in writing of circumstances that might give rise to a claim. It was also obliged under clause 5 of the A W G S excess Wording to notify the excess layer insurers of claims, or circumstances that might give rise to a claim, as and when it appeared likely that the loss might exceed the indemnity available under the primary layer policy. General Condition 2 makes it clear that giving notice to the primary layer underwriters of circumstances which may give rise to a claim is a condition precedent to the insured's right to recover in respect of any claim arising out of those circumstances, but it does not expressly provide that the obligation to give written details is of the same order. Moreover, the final sentence does not make it entirely clear whether, in order for a claim made after the end of the policy period to be deemed to have been made during that period, it is sufficient for notice of the relevant circumstances to have been given to the underwriters, or whether the insured must also have provided them with full details in writing. Whether an obligation is to be regarded as a condition precedent depends on the construction of the term which gives rise to it, but where the same clause expressly characterises some obligations as conditions precedent and others not, it is generally fair to assume that the parties did not intend to attribute the same significance to those other obligations. It would have been simple in the present case to have made the provision of written details an express condition precedent to the insured's right to an indemnity, but the parties have not chosen to do so and I think it would be wrong to construe that obligation as if they had. That being so, the contract itself points to the conclusion that it is the notification to the underwriters of circumstances that may give rise to a claim rather than the subsequent provision of details in writing that is of primary importance and that in turn provides a strong indication that notification of circumstances is sufficient to bring any claim subsequently arising out of them within the scope of the cover. Mr. Hancock submitted that, if giving notice of circumstances to the primary layer underwriters is sufficient to bring a subsequent claim within the scope of the excess layer policy, compliance with clause 5 of the A W G S Excess Wording should be construed as a condition precedent because it is only on receipt of such a notice that the excess layer underwriters will be made aware of the existence of the claim. This argument faces two difficulties, however. In the first place, compliance with clause 5 is not expressed to be a condition precedent to the insured's right to be indemnified under the excess layer policies. That is not fatal to the argument, of course, if it is clear from the language of the clause as a whole or the nature of the contract that that is what the parties intended, but in the present case there is nothing that points clearly to that conclusion. Clause 5 is designed to operate both in those cases where the claim is made within the policy period and in those where it arises out of circumstances notified within the policy period. There is no compelling reason to construe clause 5 as giving rise to a condition precedent in relation to claims made during the policy period and the fact that the extension of cover under the excess layer policy depends on notice of circumstances being given promptly to the primary layer underwriters does not in my view provide any additional reason for construing the requirement as a condition precedent in relation to claims arising after that period out of circumstances previously notified. I am satisfied that clause 5 should not be construed as giving rise to a condition precedent to the insured's right to recover under the excess layer policy. That leaves for consideration the precise nature of clause 5. In Alfred McAlpine Plc v BAI (Run Off) Ltd [2000] 1 Lloyd's Rep 437 the Court of Appeal held that a similar kind of notice clause was to be construed as an innominate term, a breach of which, if sufficiently serious, would entitle the insurer to defeat the claim. It will be necessary at a later stage to consider in more detail the precise nature of a clause of this kind, the circumstances in which a failure to comply with its requirements will result in the loss of the right to an indemnity and the principles which underlie the insurer's right to reject the claim. For present purposes, however, it is sufficient to say that the nature of clause 5 of the A W G S Excess Wording is essentially the same as that considered by the court in McAlpine v BAI and that in my view it should be construed in the same way. Issue 8: If compliance with clause 5 is not a condition precedent, does a repudiatory breach of the clause by the insured provide the insurers with a defence in any, and if so what, circumstances? This issue was added by the order of Morison J. in April this year and it is convenient to deal with it next. It arises out of the decision of the Court of Appeal in McAlpine v BAI and because the dispute turns mainly on the precise language used by Waller L.J. in reaching his conclusion about the nature of the notice clause in that case, it is necessary to quote the material parts of his judgment in full. However, it is first necessary to describe as briefly as possible the background to this part of the court's decision. Under the policy in question the insurer had agreed to indemnify the insured against all sums which it became liable to pay as compensation arising from bodily injury to persons other than its own employees. Clause 1(a) in the section headed 'Claims Conditions' required the insured to give notice to the insurer as soon as possible in the event of any occurrence which might give rise to a claim under the policy. On 1st May 1991 an accident occurred as a result of which a workman suffered serious injury in respect of which he was likely to, and eventually did, make a claim against the insured. The insured failed to give notice of the accident as soon as possible, or indeed at all prior to June 1992. The judge at first instance held that the insured had wholly failed to satisfy the requirements of the notice clause, but that compliance with the clause was not a condition precedent to its right to an indemnity. He held that the insurers were liable under the policy. On appeal there was no challenge to the judge's conclusion that compliance with clause 1(a) was not a condition precedent to the insured's right to be indemnified under the policy. The Court of Appeal held that it was an innominate term, breach of which, however serious, would be unlikely to result in the repudiation of the policy as a whole, but that a breach which demonstrated an intention not to pursue a claim or which had very serious consequences for the insurer would entitle the insurer to reject the individual claim. The relevant passage in the judgment of Waller L.J. (with whom Peter Gibson and Buxton L.JJ. agreed) is to be found at pages 443-445. He said this: "26. I do not myself think that the choice should necessarily lie between a construction which would involve condition 1(a) being a condition precedent, and condition 1(a) simply giving rise to a claim for damages. It seems to me that once a condition such as condition 1(a) is construed as something less than a condition precedent, it will still be important to ascertain precisely what its contractual effect is intended to be and what the effect of a breach of that term will be. For example, if no details of the incident in relation to which RCCL was making its claim were ever supplied, despite the insurers' requests for them, would BAI still be bound to pay, and simply be left with a remedy in damages for breach of the condition? Certainly if the consequences for BAI were that they had been seriously prejudiced, it seems to me unreasonable that that should be so. Accordingly it seems to me one should consider the possibility that a breach of condition 1(a) might in some circumstances be so serious as to give a right to reject the claim albeit it was not repudiatory in the sense of enabling BAI to accept a repudiation of the whole contract. The very fact that condition 1(a) is aimed at imposing obligations in relation to individual claims which BAI might be obliged to pay, ought logically to allow for the possibility of a "repudiatory" breach leading simply to a rejection of a claim. 27. I accept, I should say, that it is possible for the terms of a policy by express language to be clearer than this term as to what its intended effect should be. The authorities supplied to us by Mr. Walker following argument demonstrate that point. Hiddle v. National Fire and Marine Insurance Co. of New Zealand, [1896] AC 372 and Banting v. Niagara District Mutual Fire Insurance Co., (1866) 25 U.C.Q.B. 431 are examples of terms being conditions precedent. Weir v. Northern Counties of England Insurance Co., (1879) 4 L.R. Ir. 689 is an example of a term not being a condition precedent, but on its language being a term which, until it is complied with, entitles the insurer not to meet the claim. Condition 1(a) does not expressly provide for either of the above consequences and one must consider where in the spectrum it falls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32. I see no reason however why condition 1(a) should not be construed as an "innominate" term as per Hongkong Fir Shipping Co. Ltd. (sup.) where the consequences of a breach may be so serious as to entitle BAI to reject the claim albeit the breach is not so serious as to amount to a repudiation of the whole contract . . . . . . . . It seems to me that the payment of individual claims are severable obligations and that where an insured is bound to carry out one obligation in order to receive the benefit of the insurer's obligation by implication the insured is accepting that if he fails in a serious way to carry out his part of that bargain he will not receive what he has bargained for. 33. Thus the correct analysis of condition 1(a) I would suggest should be as follows. Compliance with condition 1(a) is not by the policy made a condition precedent to liability, thus it is not enough for BAI to establish a failure to supply full details as soon as possible in order to resist the claim. That much is conceded. 34. Condition 1(a) is however an innominate term. Breach of it, however serious, would be unlikely to amount to a repudiation of the whole contract of insurance. Furthermore, it is not a term the breach of which, or any breach of which, would entitle the insurer not to pay the claim because that would simply make it a condition precedent. But, in my view, a breach which demonstrated an intention not to continue to make a claim, or which has very serious consequences for BAI, should be such as to entitle BAI to defeat the claim. If a term is a condition precedent to liability, any breach defeats liability but does not lead to a repudiation of the whole contract. I see no reason why although a term is not a condition precedent so that any breach defeats liability, it cannot be construed as a term where a serious breach defeats liability. 35. It has not in fact been pleaded in this case that there was a breach with serious consequences entitling BAI to reject the claim as opposed to accept repudiation of the whole contract. However during argument some attention was focused on this aspect and it may be said that it formed part of the argument based on Taylor. On a proper understanding of Taylor it was however bound to fail unless BAI could demonstrate that there was a serious breach of condition 1(a) which had serious consequences and that in reliance on such a breach the claim had been rejected. In my view the breach of condition 1(a) in this case was very limited in that BAI had sufficient details to enable them to investigate the claim. Furthermore, by the time BAI had at least some details of the claim they had not suffered any irremediable prejudice. It was BAI's choice not to pursue the liquidator for details in June, 1992, and again in June, 1994. I am also doubtful whether BAI's conduct in 1992 or 1994 could be said to amount to a final rejection of the claim, but if it did, it was not justified." In the present case the defendants were not given notice of the claims or of the possibility that there might be claims arising out of pension mis-selling by LMA at any stage and did not learn about them until the spring of 2002 when the matter was brought to their attention by the solicitors acting for another party. However, in the light of the decision in McAlpine v BAI Mr. Weitzman submitted that they could not rely on any failure on the claimant's part to comply with the requirements of clause 5 of the A W G S Excess Wording to reject the claim because they had not formally accepted that breach as discharging their obligation to indemnify the insured. Moreover, he submitted that even if they had done so, the claimant's right to be indemnified had accrued before any attempt was made to reject the claim on those grounds and could therefore not be defeated in that way, it being well established that discharge of a contract by repudiation has no effect on the parties' accrued rights. It will be seen at once that Mr. Weitzman's argument depends on the application in this context of the ordinary principles applicable to repudiation and the discharge of contracts by breach. Mr. Hancock submitted, however, that despite using the language of repudiation Waller L.J. was simply recognising that a serious failure to comply with a notice provision such as clause 1(a) in that case was capable of being treated as a failure to comply with a condition precedent and that his choice of language was simply a succinct way of describing the kind of breach that could properly be treated as having that consequence. The issue considered by the court in McAlpine v BAI concerned the essential nature of the obligation to which clause 1(a) gave rise. Having accepted in paragraph 33 that compliance was not a condition precedent to the insurer's liability, in the sense that any failure on the part of the insured to give notice would defeat the claim, Waller L.J. concluded in paragraph 34 that the nature of the term was such that a serious breach would defeat liability and entitle the insurer to reject the claim. This appears most clearly from the final two sentences of that paragraph in which he contrasted the nature of a condition precedent, any breach of which releases the insurer from liability, with the nature of a term such as that under consideration, a breach of which will only release the insurer from liability if it is sufficiently serious. It is true that in paragraph 35 Waller L.J. used language reminiscent of the principles of discharge by breach, in particular by referring to the need for BAI to demonstrate that there had been a serious breach with serious consequences and that the claim had been rejected in reliance on that breach, but I do not think that detracts from what he had said in the earlier paragraphs. What he was seeking to do, as I understand it, was to identify and explain the nature of the obligation contained in clause 1(a), which is essentially a matter of construction. In my view Mr. Hancock was right in saying that the principles relating to discharge by breach are not directly applicable to a situation of the kind that arises in this case. As I understand the passages from his judgment quoted earlier, Waller L.J. was drawing on those principles by analogy to explain how the breach of a term such as that contained in clause 1(a) could have different consequences depending on its gravity. I do not understand him to be importing from the law on repudiation the necessity for the insurer to "accept" the breach as terminating his liability to pay, much less the principles governing accrued rights. If, as paragraphs 33 and 34 suggest, a serious breach of clause 1(a) has the same consequences as a failure to comply with a condition precedent, no "acceptance" is necessary; the insurer is simply entitled to reject the claim on that ground. Moreover, there is another reason why I am unable to accept Mr. Weitzman's argument. The submission that in the present case the claimant already had an accrued right to be indemnified by the defendants at the time when they decided to reject the claim for failure to comply with the notification requirements proceeds on the assumption that that right was unconditional. In fact, however, it was conditional on its complying, at least substantially, with the requirements of clause 5. If the claimant failed to comply with clause 5 in a manner that was sufficiently serious to entitle the defendants to reject the claim, its right to be indemnified remained at best conditional until the underwriters elected not to rely on their rights or in some other way lost their right to reject the claim on those grounds. However, neither of those events occurred. For all these reasons I have reached the conclusion that if the claimant has committed a "repudiatory", that is a serious, breach of clause 5, the defendants are entitled to treat it as equivalent to a failure to comply with a condition precedent without the need for any formal "acceptance" of the breach and are relieved of liability regardless of when the claim was made or the loss occurred. Issue 7: Do the provisions of the excess Policies extend to claims in respect of which the claimant seeks an indemnity? It was agreed that this issue adds nothing of substance to the other issues and I need say no more about it. Summary For the reasons given earlier in this judgment I hold that the questions raised by the preliminary issues should be answered as follows: Question 1: The cover provided by the excess policies extends to claims arising out of circumstances notified during the policy period. Question 2: It is sufficient that notice of the circumstances giving rise to the claim was given to the primary layer insurers. Question 3: Notice to Bowrings was not sufficient to constitute notice to the defendants. Question 4: The letter of 28th January 1994 was sufficient to constitute notice to the Lloyd's underwriters on both the primary and excess layers, but did not constitute notice to the defendants. Question 5: The claimant was obliged to give notice to the defendants of claims and circumstances in accordance with clause 5 of the A W G S Excess Wording. Question 6: The obligation to give notice to the excess layer underwriters is an innominate term breach of which, if sufficiently serious, entitles the defendants to reject liability for the relevant claim. Question 7: No separate answer required. Question 8: If the claimant has committed a serious breach of clause 5, the defendants are entitled to treat it as equivalent to a failure to comply with a condition precedent and have a defence to the claim without the need for any formal "acceptance" of the breach and regardless of when the claim was made or the loss occurred.

Swatanter Kumar, J. The Union of India being aggrieved from the judgment and order of a Division Bench of the Calcutta High Court dated 2nd March, 2005 dismissing, the Writ Petition filed by the Union of India against the order of the Central Administrative Tribunal, Calcutta, hereinafter referred to as the Tribunal dated 18th January, 2002, has filed the present appeal under Article 136 of the Constitution of India. The Tribunal vide its judgment had allowed the application filed by the respondents herein and had set aside the order dated 22nd February, 2001 issued by the Union of India. The facts giving rise to the present appeals are that the respondents are were working as Tower Wagon Drivers for short TWD under the Eastern Railways. They were promoted to the said post between the period 1979-1981. These respondents claimed running allowance 120 k.m. per day while on duty in terms of para 3.12 of the New Running Allowance Rules - structuring of the cadre. This was number paid to them resulting in the filing of a Writ Petition by them before the High Court of Calcutta. This Writ Petition was allowed by the High Court and the Eastern Railways were directed to pay running allowance to the respondents. It may be numbericed that while disposing of that Writ Petition being Civil Petition No. 4143 of 1988 and C.O. No. 1812 W of 1984 the Court passed the following Order After hearing the Learned Advocates and companysidering their submissions, we feel that a happy solution has been arrived at. We thus, after bearing them direct that with four months from today, the petitioners will be paid at the rate of 120 kilo meter per day while on duty in terms of paragraph 3.12 of the New Running Allowance Rules - structuring of cadre. We also keep it on record that while making such payment, authorities will be able and entitled to adjust the amount, which has already been received by the employees companycerned on the basis of the works, which they have done. The time, we directed, was suggested by Mr. Chakrabarty on instructions from Mr. C.B. Chowdhury, Deputy Chief Electrical Engineer, Eastern Railway, who was present in Court. After this allowance had been paid to the respondents, the Eastern Railways passed an order dated 22nd February, 2001 stating that they were granted higher pay scales inadvertently and the said scale is withdrawn as well as for recovery of amounts paid in excess of the amounts which ought to have been paid to the respondents in the lower scale. The companyrectness of this order was questioned by the respondents before the Tribunal, submitting that they were granted the pay scale of Goods Driver vide IVth Pay Commission w.e.f. 1.1.1986. They companytinued to draw the prescribed pay scale which was subsequently revised to Rs.5,000 - 8,000/- w.e.f. 1.1.1996 in terms of Vth Pay Commission. The order was arbitrary as the function and duties of the TWDs were similar to that of the Goods Driver and these posts were treated to be inter-changeable by the department which passed such orders of transfer from time to time. Thus, they prayed that they be permitted to withdraw the same pay scale. This application was companytested by Eastern Railways on behalf of the Union of India and it was stated that the scale was granted by inadvertent error and they are number entitled to the pay scale of Rs.1350-2200/- w.e.f. 1.1.1986 and also that they are number equivalent to the Goods Drivers. The matter was examined at some length by the Tribunal. It was numbericed that vide Annexure E to that application dated 15th April, 1993, the Eastern Railways itself has stated that all TWDs should be given the grade of Goods Drivers i.e. Rs.1350- 2200/- unrevised . There is numberRailway Boards circular or order directing that TWDs are number entitled to the pay scale of the Goods Drivers and they are number justified in taking decision to grant lower pay scales. The respondents had also relied upon the judgment of this Court in the case of Chandraprakash Madhavrao Dadwa v. Union of India, 1998 8 SCC 154 and Shyam Babu Verma v. Union of India, 1994 27 ATC 121. Referring to the pleadings of the parties and the record available before the Tribunal, the Tribunal did number accept the companytention of the Eastern Railways that it was by mistake that higher pay scale was given to the respondents as they were getting the same pay scales right from the year 1959. The Railways had hardly produced any records before the Tribunal to justify its decision in down grading the pay scale of the respondents and directing the companysequential recoveries. It will be useful to refer to reasoning given by the Tribunal at this stage itself 12 In view of the clear averments made in the OA, which have number been specifically rebutted by the respondents, as already stated above, and in view of the Railway Boards letter issued in implementation of the Calcutta High Courts order, by which the Tower Wagon Drivers were placed in the category of Goods Drivers for all purposes, the applicants were certainly entitled to have the salary in the pay scale of Rs.1350-2200/- w.e.f. 1.1.1986 and as a matter of fact, they have been paid salary in the same pay scale till the impugned order was issued. It may also be pointed out that pursuant to the acceptance of the 5th Pay Commission Report by the Government, the Tower Wagon Drivers were given the salary in the pay scale of Rs.8000-8000/- w.e.f. 1.1.1996. In the letter dated 15.4.1993 Annexure E , the Sr. DLD TRD Sealdah, intimated to the Sr. DPC Sealdah that in Sealdah Division, out of 32 Tower Wagon Drivers, 24 Tower Wagon Drivers were getting the pay scale of Rs.1350-2200/- and the remaining 8 Tower Wagon Drivers were getting the pay scale of Rs.1320-2040/- and according to him, all the Tower Van Drivers may be given the uniform pay scale of Rs.1350-2200/-. It seems that two different pay scales for Tower Van Drivers were prescribed because of the fact that prior to 1986, there were two different pay scales at the ratio of 60 and 40 for Goods Drivers as mentioned above. Be that as it may, it is evident that in Sealdah Division also, the Tower Wagon Drivers were given the pay scale of Rs.1350- 2200/- w.e.f 1.1.1986. It is different thing that the order of giving pay scale of Rs.1350-2200/- was withdrawn by the respondents after filing of this O.A. It is number understood on what basis, the respondents decided to discontinue to pay the salary to the Tower Wagon Drivers in the pay scale of Rs.1350-2200/-. There companyld be a situation if the Tower Wagon Drivers were number companysidered as part of the Running Staff and, therefore, their service companyditions would be different. Once they have been treated as part of the Running Staff and they are also performing the job of driving the Tower Vans Wagons, there cannot be any justification number to treat them at par with the lower grade of Goods Drivers in the railway. It is number the case where the respondents claim that the pay scale of the Tower Wagon Drivers has been refixed on the basis of some Expert Committee Report. It is obvious that the pay scale of Rs.1350-2200/- was given to the applicants on the basis of some Expert Committee Report. It is obvious that the pay scale of Rs.1350- 2200/- was given to the applicants on the basis of the decision that they were at par with the Goods Drivers. Now if the respondents seek to place the applicants in the lower pay scale, the burden lies on them to show the basis of taking such decision adverse to the interest of Tower Wagon Drivers. As already numbericed, the challenge to the above order was number accepted by the High Court and both the issues raised before the High Court, namely that the case of the Railway was number companysidered properly by the Tribunal on merits and secondly, it had numberjurisdiction to examine the said circular as the order was passed by the Divisional Railway Manager outside the jurisdiction of the Tribunal were rejected and while upholding the order of the Tribunal, the High Court of Calcutta held as under Considering the aforesaid, it is apparent that at all relevant time Tower Wagon Drivers are being treated as equivalent to Goods Train Drivers. There is numberreason shown for treating them number differently. Contention of authorities refusing to treat the Tower Wagon Drivers equivalent to driver of Goods Train, cannot be accepted. If the Tower Wagon Drivers are companytinuously being treated as running staff and equivalent to drivers of goods trains drivers there is numberreason shown for which Tower Wagon Drivers cannot be refused to be treated as equivalent to the same grade as earlier was being done for a long period. The impugned judgments have dealt with the relevant aspects appropriately and there is numberreason to interfere with the same. The above decision of the High Court is impugned in the present appeal. The basic companytention raised on behalf of the Union of India before this Court is that the job, duties, responsibilities and even essential training required for TWDs are number companyparable to those of the good train drivers. In addition, the companytention is also that the scales were granted inadvertently and number the companypetent authority, after due application of mind, has passed the order granting lower scales to the TWDs in companyparison to goods train drivers. In order to examine the merits of these companytentions, which obviously are disputed by the respondents, it will be appropriate to refer to the order impugned itself which reads as under Eastern Railway Estt. Office Order No. 199/02/Misc. C of 2001 22.02.01 With the approval of the companypetent authority the following order are issued to have immediate effect - The pay of the following T.W. Drivers of Dhanbad Division was fixed in scale S. 1350-2900 RP w.e.f. 01.01.1996 in IVth PC in the scale Rs. 1350-2200/- R.P. and scale Rs. 5000-8000/- RSRP erroneously for which they were number entitled. As such their pay scale is revised to S.1320-2040 RSRP w.e.f. 01.01.1986 in IV P.C. and Rs. 4500- 7000/- RSRP w.e.f. 01.01.1996 in Vth P.C. xxx xxx xxx The staff companycerned should be intimated accordingly The respondents in the present appeal had challenged the validity of the above order before the Tribunal on various grounds including that they have always been placed at parity with the goods driver, they have been given similar scales and there was numberreason, whatsoever, for altering the pay scale to the prejudice of the respondents, which was in force for a companysiderable time. It will be useful for us to numberice the findings recorded by the Tribunal. In paragraph 8 of its judgment the Tribunal numbericed that both the parties have number placed on record any material to indicate as to what was the pay scale provided for the TWDs pursuant to the various Pay Commission Reports. The Tribunal specifically numbericed and recorded the finding that for the last 40 years, i.e. right from 1959 the respondents were being paid the same pay scale as goods drivers. There was numberdisparity of pay scales between TWDs and goods drivers after Union of India and Railways had accepted recommendations of the IInd, IIIrd, IVth and even of Vth Pay Commissions. The Tribunal also specifically numbericed vague denials of the Union of India and that such denials were hardly substantiated by any companyent material. Reliance was placed upon the judgment of the Calcutta High Court in relation to the grant of running allowance. In that Writ Petition, the only dispute raised by the parties related to the grant of running allowance and the Union of India did number raise the issue of disparity in pay scale. This order of the High Court had attained finality. We have already referred to the findings recorded by the Tribunal where it is specifically numbericed that after acceptance of Vth Pay Commission Report by the Government, TWDs were given the salary in the pay scale of Rs. 5000-8000 w.e.f. 1.1.1996 and in the letter dated 15.4.1993 the companycerned authorities numbericed the disparity created even between the TWDs i.e. in Sealdah division out of 32 TWDs, 24 were getting pay scale of Rs. 1350-2200 unrevised and remaining 8 were getting the pay scale of Rs. 1320-2040 and it directed a uniform pay scale of Rs. 1350-2200 should be given to all the TWDs. Another reason that weighed with the Tribunal was that numbermaterial has been produced to show as to what were the reasons or material on the basis of which the authorities had decided to discontinue the pay scale of Rs. 1350-2200 to these respondents. The above reasoning and discussion in the order of the Tribunal clearly shows that the action on the face of it was arbitrary. This order of the Tribunal was companyfirmed by the High Court and the respondents made numbereffort to place anything on record to show that they were different and distinct classes and were entitled to receive different pay scales. Even in the order dated 9th August, 2002 the Tribunal specifically numbericed that it was number even averted that eligibility criteria for the post of TWDs was different than that for the goods driver and their duties were substantially different. In other words, either before the Tribunal or before the High Court the Union of India never pleaded the essential basis for justifying payment of different pay scales to two categories of drivers i.e. TWDs on the one hand and goods train drivers on the other. There has to be a substantial difference in method of recruitment, eligibility, duties and responsibilities before substantial disparity in scale can be justified. As far as recording of finding of facts is companycerned, factual disputes can hardly be raised before this Court and in any case for the first time. Despite this the Union of India has failed to place any material to substantiate its decision before the Forum Courts. The judgment of the Calcutta High Court, in relation to running allowances, has attained finality. At that time numberother issue was raised by Union of India that they are different and distinct posts with different pay scales and as such identical running allowances companyld number be paid. In fact, the judgment of the Calcutta High Court has duly been implemented number for years together without objection. Not only this, same pay scale as that of the goods train driver has been paid to these respondents for years and there appears to be numberjustification on record for unilateral withdrawal of such a scale. Pay scale is a legitimate right of an employee and except for valid and proper reasons it cannot be varied, that only in accordance with law. None of these justifiable reasons exist in the present case. The impugned order itself does number give any reason. The expression erroneously used in the order can hardly justify withdrawal of such an existing right. We may also numberice that the respondents had specifically pleaded and even placed on record certain orders in which in certain divisions the post of TWD is inter-changeable with goods driver. Orders have also been placed on record to show that in different divisions TWDs are getting different scales and the Railway Board, as such, has number passed any final order which is uniformly applicable to all the divisions of the Railways in India. Of companyrse, this has been disputed by the appellants. The appellants have also attempted to file certain documents on record to show that the duties of both these posts are different and even recruitment criteria is different. We are afraid that this companytention cannot be raised for the first time before this Court. This was expected of the Union of India to raise all these issues before the appropriate forum i.e. the Tribunal and justify the same. Even before us, these averments have been made without any supporting data or documents to substantiate such a plea. No companyparative chart of the duties and responsibilities of these two posts, recruitment rules specifying eligibility or selection criteria and working companyditions have been placed on record. The vague averments made to that effect cannot persuade this Court to disturb the companycurrent findings recorded by the Tribunal as well as by the High Court. It is a well settled rule that parties are expected to raise specific pleadings before the first forum for adjudication of the dispute. Those pleadings are the basis of the case of the respective parties even before the appellate higher Courts. The parties would be bound by such pleadings, of companyrse, subject to the right of amendment allowed in accordance with law. In the present case, numbersuch amendment has been carried out even before the High Court and it will be unfair for this Court to get into the companytroversy of factual matrix of the case at this stage of the proceedings, particularly, when there exists numberjustification whatsoever on record as to why even these averments were number made before the Tribunal and number even before the High Court, despite the fact that the Tribunal had specifically made companyments in this regard in its judgment. Even before this Court but for bald averments numberdocuments, data or companyent material has been placed for appropriate adjudication of the rights of the parties. During the companyrse of arguments this was also brought to our numberice that most of the respondents in the present appeal have already retired from service and there exist numberjustification for affecting any recoveries from their salaries as they have already worked and received their salaries as granted by the Union of India itself.

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 373 and 543 of 1965. Appeals from the judgment and decree order dated the August 1, 1962 of the Calcutta High Court in Appeals Nos. 132 and 32 of 1961. S. Bindra and R. N. Sachthey, for the appellant in the both appeals . K. Sen, Uma Mehta, P. K. Chatterjee and P. K. Bose, for the respondent in both the appeals . The Judgment of the Court was delivered by Ramaswami, J. These appeals are brought by certificate from the judgment of the Calcutta High Court dated August 1, 1962 in Appeals Nos. 32 and 132 of 1961 by which the High Court allowed the appealsagainst the Union of India hereinafter called the appellant in part and modified the award of the arbitrator and the judgment of Mallick, J. The disputes relate to 3 companytracts for the supply of bedsteads by the respondent-Bungo Steel Furniture Pvt. Ltd.- hereinafter called the Company to the appellant, namely, companytract No. A.T. 3116 for the supply of 17202 bedsteads, companytract No. A.T. 767 for the supply of 30,000 bedsteads and companytract No. A. T. 816 for the supply of 7,000 bedsteads. Each of these companytracts companytained the usual arbitration clause embodied in cl. 21 of the general companyditions of companytract in form No. W.S.B. 133. The disputes arising between the Company and the appellant out of the three companytracts were referred to the arbitration of Sir Rupen Mitter. The award of the arbitrator is dated September 2, 1959. The arbitrator found that the Company was entitled to be credited with the sum of Rs. 11,64,423/- on account of the price inclusive of the price of steel of the bedsteads supplied under the three companytracts made up of a a sum of Rs. 4,12,848/- for the price of 17,202 bedsteads supplied under companytract No. A.T. 3116 at Rs. 24/- per bedstead, b Rs. 7,05,000/- for the price of 30,000 bedsteads supplied under companytract No. A.T. 767 at Rs. 23/8/- per bedstead and c Rs. 46,575/- for the price of 2,025 bedsteads supplied under companytract No. A.T. 816. The appellant undertook to supply the requisite steel at basic rates and the price of steel so supplied was payable by the Company on presentation of material release orders called R.Os. The arbitrator found that the Company was entitled to a credit for Rs. 3,42,737/- for payment on M.R.0s. for the price of steel and the appellant was entitled to credits for Rs. 29,188/- on account of railway freight and transport charges, for Rs. 9,71,030/- on account of payments made to the Company directly and for Rs. 4,95,060/- on account of price of steel supplied to the Company. The arbitrator also found that the appellant had deducted Rs. 3,57,500/- from bills of the Company on account of the price of steel and upon that finding the arbitrator subtracted the sum of Rs. 3,57,500/- from the price of steel credited to the appellant. The appellant thereafter applied to the Calcutta High Court for setting aside the award on the ground that there was an error of law apparent on the face of the award and the arbitrator had also exceeded his authority in awarding interest. The application was dismissed by Mallick, J. by his judgment dated July 27, 1960 and a decree was granted to the Company on the basis of the award. The appellant preferred two appeals to the High Court from the judgment of Mallick, J., namely, Appeals Nos. 32 and 132 of 1961. These appeals were heard by the Division Bench companysisting of Bachawat and Laik JJ. who allowed the appeal in part and reduced the principal amount adjudged to be payable under the award by Rs. 30,970/ and modified the award accordingly- The first question to be companysidered in these appeals is whether the arbitrator companymitted an error of law in holding that the appellant had deducted Rs. 3,57,500/- from the bills of the Company with regard to companytracts other than the three companytracts of bedsteads which are the subject matter of the present case, and whether the arbitrator companyld subtract the aforesaid amount of Rs. 3,57,500/from the price of steel credited to the appellant. On behalf of the appellant it was companytended by Mr. Bindra that the deduction of Rs. 3,57,500/- had been made from the bills submitted by the Company for the price of the bedsteads supplied under the three companytracts Nos.A. T. 3116, A. T. No. 767 and A. T. 816 and the arbitrator should number have debited the appellant with this amount. It is number possible for us to accept this argument. The award of the arbitrator does number show on its face that the amount of Rs. 3,57,500/- has been deducted from the bills submitted by the Company for the price of the bedsteads under the three companytracts. The relevant portion of the award states I hold that the steel of different categories amounting to 1908 tons and odd of the value of Rs. 4,95,060/calculated at basic rates had been supplied by the Government to the Company. I further hold that the whole quantity of steel had been used in making the 7000 bedsteads under A. T. 3116, A. T. 767 and 7000 bedsteads under A.T. 816 leaving numbersurplus. I also hold that the Company paid for the price of steel on the M.R.0s. Rs. 3,42,737/- and that the Government had deducted Rs. 3,57,500/- from bills. I hold that the Company did number supply any steel from its own stock. There were companyflicting statements of the parties in the affidavits filed by them before Mallick, J. in companynection with the application for setting aside the award. The affidavit filed by the appellant dated January 5, 1957 before the arbitrator suggests that at least part of the deductions were made from bills submitted by the Company in other companytracts. On behalf of the appellant Mr. Bindra referred to the affidavits and the statements made before the arbitrator, but it is well-settled that the Court has numberjuris- 3 2 7 diction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out whether or number the arbitrator has companymitted an error of law and that the award of the arbitrator can be set aside on the ground of error of law on the face of the award only when in the award or in a document incorporated with it, as for instance a numbere appended by the arbitrator stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous. In the present case, the affidavits filed by the parties before the arbitrator are number incorporated in the award and it is therefore number permissible for the companyrt to examine these affidavits in order to ascertain whether the arbitrator has companymitted any error of law. In Hodgkinson v. Fernie 1 the law on this point has been clearly stated by William, J, as follows The law has for many years been settled, and remains so at this day, that where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is companystituted the sole and final judge of all questions both of law and of fact The only exceptions to that rule, are, cases where the award is the result of companyruption or fraud, and one other, which though it is to be regretted, is number, I think, firmly established, viz., where the question of law necessarily arises on the face of the award, or upon some paper accompanying and forming part of the award. Though the propriety of this latter may very well be doubted, I think it may be companysidered as established. The decision of this case was approved by the Judicial Committee in Champsey -Bhara and Company v. Jivraj Balloo Spinning and Weaving Conmpany, Ltd., 2 in which the appellants sold companyton to the respondents by a companytract which companytained a submission to arbitration of disputes as to quality, and a further clause submitting to arbitration all other disputes arising out of the companytract. Cotton was delivered, but the respondents objected to its quality, and upon arbitration an allowance was awarded the respondents thereupon rejected the companyton. The appellants claimed damages for the rejection. The dispute was referred to arbitration and the award recited that the companytract was subject to the rules of the Bombay Cotton Trade Association, which were number further referred to and that the respondents had rejected on the grounds companytained in a letter of a certain date. That letter stated merely that as the arbitrators had made an allowance of a certain amount the respondents rejected the companyton. The High Court set aside the award, holding that it was bad on its face, in that under one of the rules of the Association the respondents were 1 3 C. B. N. S. 189 at p. 202. 2 501.A. 324. entitled to reject without liability. It was held on appeal by the Judicial Committee that the award companyld number be set aside and though the award recited that the companytract was subject to the rules of the Bombay Cotton Trade Association, yet those rules were number so incorporated in the award as to entitle the Court to refer to them for ascertaining whether there was an error of law on the face of the award. Applying the principle to the present case, it is manifest that there is numbererror of law on the face of the award and the argument of the appellant on this aspect of the case must fail. We next proceed to companysider the argument of the appellant that the arbitrator had numberauthority to award interest from the date of the award dated September 2, 1959 to the date of the decree granted by Mallick, J. i.e., August 2, 1960. In support of this companytention Counsel for the appellant relied upon the following observations of Bose, J. in Seth Thawardas Pherumal v. The Union of India 1 . It was suggested that at least interest from the date of suit companyld be awarded on the analogy of section 34 of the Civil Procedure Code, 1908. But section 34 does number apply because an arbitrator is number a companyrt within the meaning of the Code number does the Code apply to arbitrators, and, but for section 34, even a Court would number have the power to give interest after the suit. This was, therefore, also rightly struck out from the award. This passage supports the argument of the appellant that interest cannot be awarded by the arbitrator after the date of the award but in later cases it has been pointed out by this Court that the observations of Bose, J. in Seth Thawardas Pherwnal v. The Union of India 1 were number intended to lay down such a broad and unqualified proposition See CT. A. CT. Nachiappa Chettiar and others CT. A. CT. Subramaniam Chettiar, 2 and Satinder Singh Amrao Singh 3 . In Seth Thawardas Pherumal v. The Union of India 4 , the material facts were that the arbitrator had awarded interest on unliquidated damages for a period before the reference to arbitration and also for a period subsequent to the reference. The High Court set aside the award regarding interest on the ground that the claim for interest was number referred to arbitration and the arbitrator had numberjurisdiction to entertain the claim. In this Court, companynsel for the appellant companytended that the arbitrator had statutory power under the Interest Act of 1839 to award the interest and, in any event, he had power to award interest during the pendency of the arbitration 1 1955 2 S. C. R. 48,65. 2 1960 2 S. C. R. 209, 238, 3 1961 3 S. C. R. 676, 695. proceedings under s 34 of the Code of Civil Procedure, 1908. Bose, J. rejected this companytention, but it should be numbericed that the judgment of this Court in Seth Thawardass case 1 does number deal with the question whether the arbitrator can award interest subsequent to the passing of the award if the claim regarding interest was referred to arbitration. In the present case, all the disputes in the suit, including the question of interest, were referred to the arbitrator for his decision. In our opinion, the arbitrator had jurisdiction, in the present case, to grant interest on the amount of the award from the date of the award till the date of the decree granted by Mallick, J. The reason is that it is an implied term of the reference that the arbitrator will decide the dispute according to existing law and give such relief with regard to interest as a companyrt companyld give if it decided the dispute. Though, in terms, s. 34 of the Code of Civil Procedure does number apply to arbitration proceedings, the principle of that section will be applied by the. arbitrator for awarding interest in cases where a companyrt of law in, a suit having jurisdiction of the subject-matter companyered by s. 34 companyld grant a decree for interest. In Edwards v. Great Western Ry. 2 one of the questions at issue was whether an arbitrator companyld or companyld number award interest in a case which was within s. 28 of the Civil Procedure Act, 1833. It was held by the Court of Common Pleas that the arbitrator, under a submission of all matters in difference, might award the plaintiff interest, numberwithstanding the numberice of action did number companytain a demand of interest and, further, that, assuming a numberice of action to have been necessary,the want or insufficiency of such numberice companyld number be taken advantage of, since the 5 6 Viet. C. 97, s. 3, unless pleaded specially. In the companyrse of his judgment Jarvis C. J. observed A further answer would be, that this is a submission, number only of the action, but of all matters in difference and the interest would be a matter in difference, whether demanded by the numberice of action or number. If the arbitrator companyld give it, he might give it in that way, numberwithstanding the want of claim of interest in the numberice.

Mr Justice Tugendhat: This libel action arises out of the publication of an article in the Comment pages of the issue of the Daily Telegraph dated 15 June 2013. The words complained of were first published online the day before, and they remain accessible online today. The article refers to the murder of Drummer Lee Rigby on a street in Woolwich less than a month before, on 22 May. The claim form was issued on 15 January 2014, which was after the Defamation Act 2013 came into force. The parties have not applied for trial by jury under the Senior Courts Act 1981 s.69(3) as amended, but have consented to an order that there be the trial of a preliminary issue in the action to determine the actual meaning of the words complained of. The order (as amended by agreement) is that the issue be whether the words pleaded in paragraph 3 of the Particulars of Claim bear the meanings pleaded in paragraphs 4, 5(a) and (b) of the Particulars of Claim and if so, whether they are defamatory of the Claimant. However, the court is not bound to determine that the words complained of either do, or do not, bear meanings attributed to them by one or other party. The court at a trial must determine the actual meaning, and that may include a meaning contended for by neither party, provided (amongst other things) that it is not more serious than the meaning contended for the by the Claimant. If the court decides that the words complained of are defamatory, it is good practice also to determine whether they are fact or are opinion (comment), and it may decide this question either before or after deciding whether or not the words are defamatory see British Chiropractic Association v Singh [2011] 1 WLR 133 at para [32]. In spite of the excessively narrow formulation of the consent order, the parties accept that the foregoing approach is the one I am entitled to adopt. The Claimant runs an organisation called "Tell Mama". He has been awarded the honour of being an Officer of the Order of the British Empire, or OBE. This honour is awarded to people having a major local role in any activity, including people whose work has made them known nationally in their chosen area. In the Particulars of Claim he describes himself as "… the Director of Faith Matters UK, an interfaith and anti-extremist organisation which seeks to enhance dialogue between Muslims and sectors of the community. 'Tell Mama' is a project set up by Faith Matters and the Claimant for measuring and monitoring all forms of anti-Muslim attacks…" The Defendant is the publisher of the Daily Telegraph. THE WORDS COMPLAINED OF The words complained of are included in an article, which is the largest piece on page 22 of the hard copy edition, under the heading "We are too weak to face up to the extremism in our midst… Despite the Woolwich outrage, David Cameron has failed to act against Islamist terrorism". It reads as follows (with numbering added): 1) "It is less than a month since Drummer Lee Rigby was murdered in Woolwich, yet already the incident feels half-forgotten. In terms of the legal process, all is well. Two men have been charged. There will be a trial. No doubt justice will be done. But I have a sense that the horror felt at the crime is slipping away. 2) The media, notably the BBC, quickly changed the subject. After a day or two focusing on the crime itself, the reports switched to anxiety about the "Islamophobic backlash". According to Tell Mama, an organisation paid large sums by the Government to monitor anti-Muslim acts, "the horrendous events in Woolwich brought it [Islamophobia] to the fore". Tell Mama spoke of a "cycle of violence" against Muslims. 3) Yet the only serious violence was against a British soldier, who was dead. In The Sunday Telegraph, Andrew Gilligan brilliantly exposed the Tell Mama statistics – most of them referred merely to nasty remarks on the web rather than actual attacks, many were not verified, no reported attack had required medical attention, and so on. Yet the "backlash" argument has sailed on, with people shaking their heads gravely about the need to "reassure" Muslims. Tell Mama equates "hate inspired by al-Qaeda" with the "thuggery and hate of the EDL [the English Defence League]". 4) A trap is set here, inviting those of us who reject such statements, to defend the EDL. I do not. While not, in its stated ideology, a racist organisation like the BNP, the EDL has an air of menace. It must feel particularly unpleasant for Muslims when its supporters hit the streets. But the EDL is merely reactive. It does not – officially at least – support violence. It is the instinctive reaction of elements of an indigenous working class which rightly perceives itself marginalised by authority, whereas Muslim groups are subsidised and excused by it. Four days ago, six Muslim men were sentenced at the Old Bailey for a plot to blow up an EDL rally. The news was received quietly, though it was a horrifying enterprise. No one spoke of "white-phobia". Imagine the hugely greater coverage if the story had been the other way round. 5) All journalists experience this disparity. If we attack the EDL for being racist, fascist and pro-violence, we can do so with impunity, although we are not being strictly accurate. If we make similar remarks about Islamist organisations, we will be accused of being racist ourselves. "Human rights" will be thrown at us. We shall also – this has happened to me more than once – be subject to "lawfare", a blizzard of solicitors' letters claiming damages for usually imagined libels. Many powerful people in the Civil Service, local government, politics and the police, far from backing up our attacks on extremism, will tut-tut at our "provocative" comments. 6) Much more important – from the point of view of the general public – you frequently find that Muslim groups like Tell Mama get taxpayers' money (though, in its case, this is now coming to an end). You discover that leading figures of respectable officialdom share conference platforms with dubious groups. You learn that Muslim charities with blatantly political aims and Islamist links have been let off lightly by the Charity Commission. And you notice that many bigwigs in Muslim groups are decorated with public honours. Fiyaz Mughal, for example, who runs Tell Mama, has an OBE. Obviously it would be half-laughable, half-disgusting, if activists of the EDL were indulged in this way; yet they are, in fact, less extreme than some of those Muslims who are. 7) More than two years ago, David Cameron delivered an important speech in Munich when he emphasised that Islamist terrorism arises from the poisoning of young minds. He said that extremism does not have to be violent for it to be dangerous. If it stirs up hate and spreads lies, it rolls the pitch for violent action. He wanted the Government's counter-terrorism Prevent programme reviewed in this light. 8) The results were initially good. Grants were cut and people were denied access. But there was too little follow-through within government, Civil Service or police. Although consistently tough himself, Mr Cameron has not persuaded others to be the same. Seeking a sop for Lady Warsi, whom he wanted to demote from the Tory chairmanship, he made her the "minister for faith and communities" without thinking of its consequences for his Munich agenda. This strange job, which gave her a foothold in two government departments, has made her a spokesman on these issues. Yet Lady Warsi is very slow to condemn Muslim sectarianism and has appeared on the platform of FOSIS, the federation of Muslim students which has repeatedly given house room to extremism. Five subsequently convicted terrorists have held office in Muslim student societies in British universities, yet the university authorities usually disclaim any responsibility. 9) Malcolm Grant is the president of University College London, whose student Islamic society was run by the "Underpants Bomber", Umar Farouk Abdulmutallab. He resists the suggestion that he should prevent such extremism on his premises. Now, as well as UCL, Prof Grant manages to be chairman of NHS England. I predict a peerage very shortly, or at least a knighthood. I also predict that preachers of deadly hate will continue to operate easily in our universities under the banner of academic freedom. FOSIS encourages "community cohesion", according to a universities spokesman. 10) I come back to the killing of Lee Rigby. This act of blatant, total barbarism on an English street in broad daylight shocked every decent person, but not quite enough. Almost as shocking as the bestial cruelty was the brazenness. When you saw young men with blood-soaked arms standing there and talking about what they said they had done, you knew that they would be arrested. But that was not as much comfort as it should have been. You also sensed that they had little fear: they felt that they almost had permission to act as they had done from a society too weak to make such an act unthinkable. They were, unfortunately, right to think that way. 11) In Britain today, extremists intuit that organised society is at a disadvantage to them. They understand that what makes them feel strong – the power of obnoxious ideas – is exactly what the authorities do not want to investigate and attack. 12) It is worrying, for example, that MI5 has a "behavioural sciences unit" to try to understand the psychology and anthropology of young terrorists, but no comparable unit studying ideology alone. It actually states on its website that the threat of subversion in Britain is "now [since the end of the Cold War] considered to be negligible", and so it no longer investigates it. Intelligence agencies think in terms of state power, and they know that subversion by enemy states is not happening now. They have not adjusted to the new reality – subversion that goes way beyond states, the capture of hearts and minds by evil. 13) This weekend, Nelson Mandela is gravely ill. When he was a boy, his teacher – whose name was Wellington – replaced his African first name with that of a British hero: he called him Nelson. It stuck. Anti-imperialist though he is, Mandela was educated with a profound respect for the British culture of parliamentary democracy. It became, in many respects, his model for a multiracial South Africa. It arose from good beliefs inculcated early in life. In our own country today, almost the opposite happens. In our state schools, in mosques, on the internet, in university gatherings, many young people are taught to detest the freedom in which they live. Just as surely as good teaching, bad teaching has its power. We refuse even to face it, let alone to stop it." The words complained of are, and are only, those in paragraph (6). The meanings which the Claimant attributes to them are: "4. In their natural and ordinary meaning … that the Claimant is a Muslim extremist. 5 Further or alternatively, by way of innuendo … that the Claimant is: (a) more extremist in his views and actions than the far-right extremists who are activists within the English Defence League ("EDL"); and/or (b) a hypocrite, as he falsely portrays himself as an individual who is anti-extremist". Both parties agree that the meanings in paras 4 and 5(a) can be taken together, and that meaning 5(b) is separate. There are particulars of innuendo. But I need not set them out. It is common ground that I can proceed for present purposes on the assumption that the Claimant would prove at any trial that some readers of the words complained of had read articles published in the Daily Telegraph, and in other publications, in which the EDL activists are described as "far-right extremists", and numerous reports that the Claimant has been claiming that Faith Matters is an organisation which works to reduce extremism. No defence has been served. Mr Price for the Defendant submits that no reasonable reader would attribute to the words complained of the meanings contended for by the Claimant, or any meaning defamatory of the Claimant. THE LAW The law in this case is not contentious. Although there are a number of well-known definitions of the legal meaning of the word "defamatory", I shall take the definition used by Sir Thomas Bingham MR in Skuse v Granada Television Limited [1996] EMLR 278 at 286 where he said: "A statement should be taken to be defamatory if it would tend to lower the [claimant] in the estimation of right-thinking members of society generally or would be likely to affect a person adversely in the estimation of reasonable people generally." The principles governing a meaning application are as summarised by Sir Anthony Clarke MR in Jeynes v News Magazines Limited [2008] EWCA Civ 130 at [14]: "(1) The governing principle is reasonableness. (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. (3) Over-elaborate analysis is best avoided. (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole, and any 'bane and antidote' taken together. (6) The hypothetical reader is taken to be representative of those who would read the publication in question. (7) …. (8) It follows that 'it is not enough to say that by some person or another the words might be understood in a defamatory sense.'" The natural and ordinary meaning may include implications or inferences which the ordinary reasonable and fair minded reader would draw. Principle (6) required the court to take account of the type of newspaper or website in question and of the characteristics of the individuals making up the likely readership. The Daily Telegraph is a broadsheet with an educated readership, interested in current affairs generally, and political issues in particular. As Lord Phillips noted in Spiller v Joseph [2010] UKSC 53 at paras [77] and [78], under ECHR law, as under English defamation law, there is "little scope … for restrictions on political speech or on debate on questions of public interest." He was referring to what the Court said in Hrico v Slovakia (2005) 41 EHRR 18, para 40g: "There is little scope under Article 10 § 2 of the Convention for restrictions on political speech or on debate on questions of public interest (see Sürek v. Turkey (no. 1, no. 26682/95, § 61, ECHR 1999-IV). Moreover, the limits of acceptable criticism are wider as regards a public figure, such as a politician, than as regards a private individual. Unlike the latter, the former inevitably and knowingly lays himself open to close scrutiny of his words and deeds by journalists and the public at large, and he must consequently display a greater degree of tolerance (see Lingens v. Austria, judgment of 8 July 1986, Series A no. 103, p. 26, § 42, or Incal v. Turkey, judgment of 9 June 1998, Reports 1998-IV, p. 1567, § 54)." In Waterson v Lloyd [2013] EWCA Civ 136 at para [66] Laws LJ relates that dictum of Lord Phillips to Jeynes as follows: "We are enjoined by Jeynes v News Magazines Ltd … to avoid 'over elaborate analysis'. I think this dictum has a particular resonance in the context of political speech." SUBMISSIONS The Claimant Ms Mansoori's central submission is based on the juxtaposition of the three sentences: "And you notice that many bigwigs in Muslim groups are decorated with public honours. Fiyaz Mughal, for example, who runs Tell Mama, has an OBE. Obviously it would be half-laughable, half-disgusting, if activists of the EDL were indulged in this way; yet they are, in fact, less extreme than some of those Muslims who are." She submits that the Claimant is the only individual identified in that passage as a decorated 'bigwig' ("Fiyaz Mughal … who runs Tell Mama, has an OBE"). He is thus referred to as one of those Muslims who are compared with the 'activists of the EDL', and by comparison with whom the EDL are 'less extreme'. In accordance with Jeynes principle (5) Ms Mansoori refers to the whole of the article in which the words complained of appear. In doing so she emphasises the repeated use of the words 'extremism' and 'extremist' in the title, and in the body of the article. She submits that the Claimant is not a politician, and that the broader principle applicable to political speech does not apply here. As to the meaning in paragraph 5(b), Ms Mansoori submits that that is derived from the contrast between the public statements of the Claimant portraying himself as an individual who is an anti-extremist and the words complained of. The Defendant Mr Price submits that the gist of the article as a whole is captured in the words of the Prime Minister reported in paragraph (7), immediately after the words complained of: "Islamist terrorism arises from the poisoning of young minds. … extremism does not have to be violent for it to be dangerous. If it stirs up hate and spreads lies, it rolls the pitch for violent action." As he also expresses what he submits is the gist of the article, Islamist terrorism thrives in an environment where preferential treatment is given to those claiming to represent Muslims. In paras (2) and (3) the article is critical of Tell Mama for, as the author alleges, misrepresenting the facts. The article includes: "According to Tell Mama, an organisation paid large sums by the Government to monitor anti-Muslim acts, "the horrendous events in Woolwich brought it [Islamophobia] to the fore". Tell Mama spoke of a "cycle of violence" against Muslims…" Mr Price submits that the Claimant is not the only individual identified in the article. In paragraph (8), Lady Warsi is identified as a 'bigwig' who has been 'decorated with public honours'. The article states that she: "is very slow to condemn Muslim sectarianism and has appeared on the platform of FOSIS, the federation of Muslim students which has repeatedly given house room to extremism." Mr Price submits that the reasonable reader would not identify the Claimant as being referred to by the words "some of those Muslims who are", in the last words of the words complained of. What the writer complains of concerning Tell Mama and the Claimant has been set out in paragraphs (2) and (3). So the reasonable reader will understand what is meant when the Claimant is referred to again in paragraph (6). Mr Price submits that the meaning of hypocrisy is contrived. There is no suggestion that the views which the article attributes to the Claimant are not his sincere views. The criticism relates to their alleged effect on others. In relation to both meanings Mr Price submits that they are clearly comment. He does not make that submission for the purposes of a defence of honest opinion. The question of a defence does not arise until the court has first found the words to be defamatory. Mr Price's submission is that a finding that words are clearly comment may be relevant to the consideration of the question whether they are not defamatory: see British Chiropractic Association v Singh. DISCUSSION In my judgment this article does come within the scope of the principle that there is "little scope … for restrictions on political speech or on debate on questions of public interest." And a court determining meaning must have regard to that principle. I accept the submission of Mr Price that the words complained of do not identify the Claimant as one of those Muslims who, when a comparison is made with EDL, shows that activists of EDL are less extreme. What the reasonable reader would understand is that, through Tell Mama, the Claimant has overstated two matters. He has overstated the extent to which violence against Muslims after the murders of Drummer Rigby is a backlash. And he has overstated the position in equating 'hate inspired by al-Qaeda' with the 'thuggery and hate of the EDL'. The meaning of the words complained of is not that the Claimant is more extreme in his views and actions than EDL, and it is not that he is a hypocrite. The words complained of are part of a public debate clearly identified as comment, or the opinion of the author, to the effect that the views that the Claimant expresses, and for which he has received public honours, are not violent views, but are views which tend nevertheless to have dangerous consequences. That is not defamatory of the Claimant. The criticism is as to the effect of his views. It is not of his character. Since in my judgment the meaning of the words complained of is dependent upon what is written about the Claimant in the earlier paragraphs of the article, in particular paragraphs (2) and (3), it follows that there is no separate meaning conveyed by those paragraphs which is more serious than the meaning conveyed by the words complained of. There is thus no meaning defamatory of the Claimant in the article as a whole. CONCLUSION For these reasons the words complained of do not bear the meanings attributed to them by the Claimant in the Particulars of Claim at paras 4 and 5, and they do not bear any other meaning defamatory of the Claimant.

Case C-47/09 European Commission v Italian Republic (Approximation of laws – Cocoa and chocolate products – Labelling – Addition of the word ‘pure’ or the phrase ‘pure chocolate’ to the labelling of certain products) Summary of the Judgment Approximation of laws – Labelling and presentation of foodstuffs – Directives 79/112, 2000/13 and 2000/36 – Cocoa and chocolate products (European Parliament and Council Directives 2000/13, Art. 2(1)(a), and 2000/36, Art. 3(1) and (5);Council Directive 79/112) A Member State whose legislation provides that the adjective ‘pure’ may be added to the sales name of chocolate products which do not contain vegetable fats other than cocoa butter fails to fulfil its obligations under Article 3(1) of Directive 2000/36 relating to cocoa and chocolate products intended for human consumption in conjunction with Article 2(1)(a) of Directive 2000/13 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs, and under Article 3(5) of Directive 2000/36. Directive 2000/36 carried out full harmonisation of the sales names of chocolate products, whilst the Community legislature provided that the addition of substitute vegetable fats does not entail the use of different names for such products but the presence of additional information on the label. Thus, the addition of vegetable fats other than cocoa butter to cocoa and chocolate products which satisfy the minimum contents required by that directive cannot substantially alter the nature of those products to the point where they are transformed into different products. The inclusion in another part of the labelling of a neutral and objective statement informing consumers of the absence from the product of vegetable fats other than cocoa butter would be sufficient to ensure that consumers are given correct information. (see paras 29, 32, 39, 41, 45, 49, operative part) JUDGMENT OF THE COURT (First Chamber) 25 November 2010 (*) (Approximation of laws – Cocoa and chocolate products – Labelling – Addition of the word ‘pure’ or the phrase ‘pure chocolate’ to the labelling of certain products) In Case C‑47/09, ACTION under Article 226 EC for failure to fulfil obligations, brought on 30 January 2009, European Commission, represented by F. Clotuche-Duvieusart and D. Nardi, acting as Agents, with an address for service in Luxembourg, applicant, v Italian Republic, represented by G. Palmieri, acting as Agent, assisted by P. Gentili, avvocato dello Stato, with an address for service in Luxembourg, defendant, THE COURT (First Chamber), composed of A. Tizzano, President of Chamber, J.-J. Kasel, M. Ilešič, E. Levits and M. Berger (Rapporteur), Judges, Advocate General: Y. Bot, Registrar: L. Hewlett, Administrator, having regard to the written procedure and further to the hearing on 10 June 2010, having decided, after hearing the Advocate General, to proceed to judgment without an Opinion, gives the following Judgment 1 By its application, the Commission of the European Communities claims that the Court should declare that, by making it possible to add the adjective ‘pure’ or the phrase ‘pure chocolate’ to the labelling of chocolate products which do not contain vegetable fat other than cocoa butter, the Italian Republic has failed to fulfil its obligations under Article 3(5) of Directive 2000/36/EC of the European Parliament and of the Council of 23 June 2000 relating to cocoa and chocolate products intended for human consumption (OJ 2000 L 197, p. 19) and Article 3 of Directive 2000/36, read in conjunction with Article 2(1)(a) of Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs (OJ 2000 L 109, p. 29). Legal context European Union law 2 The labelling of cocoa and chocolate products is governed by a ‘horizontal’ directive, Directive 2000/13, and by a ‘vertical’ or ‘sectoral’ directive, Directive 2000/36, which constitutes a lex specialis in relation to Directive 2000/13. Directive 2000/36 3 Directive 2000/36 is intended to lay down common rules regarding the addition to cocoa and chocolate products of vegetable fats other than cocoa butter and to harmonise sales names. 4 With regard to the use of vegetable fats other than cocoa butter, recitals 5, 6, 9 and 10 in the preamble to Directive 2000/36 read as follows: ‘(5) The addition to chocolate products of vegetable fats other than cocoa butter, up to a maximum of 5%, is permitted in certain Member States. (6) The addition of certain vegetable fats other than cocoa butter to chocolate products, up to a maximum of 5%, should be permitted in all Member States; those vegetable fats should be cocoa butter equivalents and therefore be defined according to technical and scientific criteria. … (9) In the case of chocolate products to which vegetable fats other than cocoa butter have been added, consumers should be guaranteed correct, neutral and objective information in addition to the list of ingredients. (10) On the other hand, Directive 79/112/EEC does not preclude the labelling of chocolate products to indicate that vegetable fats other than cocoa butter have not been added, provided the information is correct, neutral, objective, and does not mislead the consumer.’ 5 With regard to sales names, recital 7 in the preamble to Directive 2000/36 reads as follows: ‘In order to guarantee the single nature of the internal market, all chocolate products covered by this directive must be able to move within the Community under the sales names set out in the provisions of Annex I to this directive.’ 6 Under Article 2(1) and (2) of that directive: ‘1. The vegetable fats other than cocoa butter as defined in Annex II and listed therein may be added to those chocolate products defined in Annex I(A)(3), (4), (5), (6), (8) and (9). That addition may not exceed 5% of the finished product, after deduction of the total weight of any other edible matter used in accordance with Annex I(B), without reducing the minimum content of cocoa butter or total dry cocoa solids. 2. The chocolate products which, pursuant to paragraph 1, contain vegetable fats other than cocoa butter may be marketed in all of the Member States, provided that their labelling, as provided for in Article 3, is supplemented by a conspicuous and clearly legible statement: “contains vegetable fats in addition to cocoa butter”. This statement shall be in the same field of vision as the list of ingredients, clearly separated from that list, in lettering at least as large and in bold with the sales name nearby; notwithstanding this requirement, the sales name may also appear elsewhere.’ 7 Article 3 of Directive 2000/36 provides: ‘Directive 79/112/EEC shall apply to the products defined in Annex I, subject to the following conditions: (1) The sales names listed in Annex I shall apply only to the products referred to therein and must be used in trade to designate them. … (5) The sales names “chocolate”, “milk chocolate” and “couverture chocolate” specified in Annex I may be supplemented by information or descriptions relating to quality criteria provided that the products contain: – in the case of chocolate, not less than 43% total dry cocoa solids, including not less than 26% cocoa butter, – in the case of milk chocolate, not less than 30% total dry cocoa solids and not less than 18% dry milk solids obtained by partly or wholly dehydrating whole milk, semi- or full-skimmed milk, cream, or from partly or wholly dehydrated cream, butter or milk fat, including not less than 4.5% milk fat, – in the case of couverture chocolate, not less than 16% of dry non-fat cocoa solids.’ 8 Article 4 of Directive 2000/36 provides: ‘For the products defined in Annex I, Member States shall not adopt national provisions not provided for by this Directive.’ Directive 2000/13 9 Council Directive 79/112/EEC of 18 December 1978 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer (OJ 1979 L 33, p. 1), was repealed and replaced by Directive 2000/13. References to the repealed directive must therefore be taken to be references to Directive 2000/13. 10 Article 2(1) of Directive 2000/13 provides: ‘1. The labelling and methods used must not: (a) be such as could mislead the purchaser to a material degree, particularly: (i) as to the characteristics of the foodstuff and, in particular, as to its nature, identity, properties, composition, quantity, durability, origin or provenance, method of manufacture or production; (ii) by attributing to the foodstuff effects or properties which it does not possess; (iii) by suggesting that the foodstuff possesses special characteristics when in fact all similar foodstuffs possess such characteristics; (b) subject to Community provisions applicable to natural mineral waters and foodstuffs for particular nutritional uses, attribute to any foodstuff the property of preventing, treating or curing a human disease, or refer to such properties.’ National law 11 Article 28(1) of Law No 39 of 1 March 2002 laying down provisions concerning compliance with obligations arising from Italy’s membership of the European Communities – Community Law 2001 (Ordinary Supplement to GURI No 72 of 26 March 2002; ‘Law No 39/2002’) provides: ‘Implementation of Directive 2000/36 relating to cocoa and chocolate products intended for human consumption 1. Directive 2000/36/EC relating to cocoa and chocolate products intended for human consumption shall be implemented in accordance with the following principles and criteria: (a) to guarantee that the labelling of cocoa and chocolate products not only ensures transparency, but displays a different statement depending on whether the product has been produced with the addition of vegetable fats other than cocoa butter or using exclusively cocoa butter; in the former case, the label must contain the word “chocolate” whilst, in the latter, the phrase “pure chocolate” may be used; (b) to establish quality certification procedures for typical products which use exclusively cocoa butter for the production of chocolate.’ 12 Article 6(1) of Legislative Decree No 178 of 12 June 2003 implementing Directive 2000/36/EC relating to cocoa and chocolate products intended for human consumption (GURI No 165 of 18 July 2003; ‘Legislative Decree No 178/2003’), provides: ‘Use of the phrase “pure chocolate” Chocolate products listed in Annex I, points 3, 4, 5, 6, 7, 8, 9 and 10, which do not contain vegetable fats other than cocoa butter, with the exception of the filling where it is not made of cocoa or chocolate products, may bear on the label the word “pure” paired with the word “chocolate”, added to or incorporated in the sales names listed in Annex I, or the phrase “pure chocolate” elsewhere on the label.’ 13 Article 7(8) of the Legislative Decree provides: ‘Fines … Any person using the word ‘pure’ paired with the word ‘chocolate’ on the label of products listed in Annex I, points 3, 4, 5, 6, 7, 8, 9 and 10, which contain vegetable fats other than cocoa butter, with the exception of the filling where it is not made of cocoa or chocolate products, shall be liable to an administrative fine of between EUR 3 000 and EUR 8 000.’ Pre-litigation procedure 14 By letter of 22 March 2004, the Commission drew the attention of the Italian authorities to the incompatibility of Law No 39/2002 and Legislative Decree No 178/2003 with Directives 2000/13 and 2000/36. The Italian authorities replied by note of 23 April 2004 from the Ministry for Production. 15 Dissatisfied with that reply, the Commission initiated the infringement procedure provided for in Article 226 EC and, accordingly, sent a letter of formal notice to the Italian Republic on 13 October 2004. 16 In the absence of a response from the Italian authorities, the Commission issued a reasoned opinion by letter of 5 July 2005, requesting the Italian Republic to adopt the measures necessary to comply with that opinion within a period of two months from its receipt. 17 In response, the Italian authorities, by letters of 21 October and 4 November 2005, indicated their intention to amend Articles 6 and 7 of Legislative Decree No 178/2003 and, on that basis, requested that the infringement procedure be terminated. 18 Finding that, despite subsequent exchanges of correspondence, the situation remained unchanged, the Commission decided to bring the present action. The action Arguments of the parties 19 The Commission claims that, by introducing the possibility, under Article 28(1) of Law No 39/2002 and Article 6 of Legislative Decree No 178/2003, of adding the adjective ‘pure’ or the phrase ‘pure chocolate’ to the labelling of chocolate products and, more specifically, to the sales names listed in Annex I to that decree for products not containing vegetable fats other than cocoa butter, the Italian legislation has introduced an additional name for chocolate products according to whether they can be regarded as ‘pure’ or ‘not pure’. That distinction constitutes, in essence, an infringement of Article 3(1) and (5) of Directive 2000/36 and conflicts with the case-law of the Court, which has held that chocolate products containing up to a maximum of 5% of certain vegetable fats are to be regarded as being the same (Case C‑14/00 Commission v Italy [2003] ECR I‑513, paragraph 87). 20 The Commission points out that the use of vegetable fats other than cocoa butter is strictly regulated. Not only is such use restricted to the six substances on the exhaustive list in Annex II to Directive 2000/36, but the addition of such fats may not exceed 5% of the finished product. Moreover, as recital 9 in the preamble to that directive states, the information concerning the presence of vegetable fats must be correct, neutral, objective and such that it does not mislead the consumer. Article 2(2) of that directive therefore provides that the statement ‘contains vegetable fats in addition to cocoa butter’ must appear ‘nearby’ the sales name, and not in that name. The Community legislature made provision for consumers to be informed whether or not vegetable fats other than cocoa butter are present in the chocolate product through the labelling and not through the use of a separate sales name. 21 The Commission notes that the distinction created by the Italian legislation is doubly misleading for the average consumer. It claims that the use of the adjective ‘pure’ is not correct, neutral, or objective and that it is therefore misleading per se. 22 First of all, the word ‘pure’ automatically implies negative connotations for any product not bearing that description. 23 Secondly, the fact of having created two categories of chocolate products when the law provides for only one is likely to mislead consumers into thinking that there are two categories of chocolate. 24 Lastly, the phrase ‘pure chocolate’ is not sufficiently explicit to inform the consumer of the fact that the chocolate in question contains only cocoa butter, without the addition of other vegetable fats. 25 The Italian Republic does not dispute the fact that the sales names listed in Annex I to Directive 2000/36 are compulsory and exhaustively listed. It contends, however, that the sales name is not the only information on the label. It is clear that Member States may add other statements to the label, in particular in order to indicate to consumers that no fat other than cocoa butter has been used. It is therefore possible to display on the label any information that does not create confusion with the sales name, which must remain the name listed in Annex I. 26 The Italian legislature did not want to introduce a new sales name or an indication of a quality criterion that is based not on a cocoa content higher than the minimum required, but on the exclusive use of cocoa butter. The adjective ‘pure’ does not have a qualitative connotation but is purely descriptive. Thus, it serves only to indicate the composition of the product in question, without prejudice to whether or not the product is of a higher quality. Article 6 of Legislative Decree No 178/2003, in the opinion of the Italian Republic, therefore complies with Article 3(1) and (5) of Directive 2000/36. 27 The Italian Republic contends that the addition of the adjective ‘pure’ serves to indicate that the vegetable fat used is exclusively cocoa butter and no other. That explains why the addition of the adjective ‘pure’ to the sales name does not interfere with that name, which remains unchanged. For that reason, it cannot be argued that a new name, not listed in Annex I to Directive 2000/36, has been introduced. 28 The Italian Republic contends that the expression ‘pure chocolate’ is merely descriptive, in that it simply gives information for the consumer, information to which the consumer is entitled in accordance with recital 10 in the preamble to Directive 2000/36 and to Directive 2000/13. On the basis of that information, the consumer is then free to decide which product he prefers to buy. In a context in which the consumer is fully informed that vegetable fats other than cocoa butter may enter into the composition of chocolate products, statements of this type are indeed perceived as being information as to whether or not such vegetable fats are present. Findings of the Court The complaint alleging failure to fulfil the obligations under Article 3(1) of Directive 2000/36 and Article 2(1)(a) of Directive 2000/13 29 As regards failure to fulfil the obligations under Article 3(1) of Directive 2000/36 and Article (2)(1)(a) of Directive 2000/13, it should be stated first of all that, as the Commission has observed, Article 3 of Directive 2000/36 introduced full harmonisation of sales names for cocoa and chocolate products intended for human consumption, in order to guarantee the single nature of the internal market. The sales names listed in Annex I to Directive 2000/36 are, in accordance with Article 3(1) of that directive, both compulsory and reserved for the products listed in that annex. The addition of adjectives denoting quality is subject to compliance with the specific conditions laid down in Article 3(5) of Directive 2000/36. Furthermore, Article 4 of that directive provides that Member States must not adopt, for the products listed in Annex I, national provisions not provided for by Directive 2000/36 itself. Therefore, Article 3 of that directive carried out full harmonisation of the sales names of chocolate products, and the Italian Republic has not, moreover, disputed the binding nature of that harmonisation. 30 That interpretation is corroborated, moreover, by the background to that directive. The seventh recital in the preamble to Council Directive 73/241/EEC of 24 July 1973 on the approximation of the laws of the Member States relating to cocoa and chocolate products intended for human consumption (OJ 1973 L 228, p. 23) states that ‘the use of vegetable fats other than cocoa butter in chocolate products is permitted in certain Member States, and extensive use is made of this facility; … however, a decision relating to the possibilities and forms of any extension of the use of these fats in the Community as a whole cannot be taken at the present time, as the economic and technical data currently available are not sufficient to enable a final position to be adopted; [and] the situation will consequently have to be re‑examined in the light of future developments’. 31 Thus, by Directive 73/241, the Community legislature, given the disparities between the legislation of the various Member States, could not, at the time the directive was adopted, take a final position on the question of the consequences as regards names or labelling of the use of vegetable fats other than cocoa butter in chocolate products. Accordingly, the Council of the European Union merely introduced, with regard to the use of vegetable fats other than cocoa butter, a provisional arrangement which was to be reviewed, in accordance with Article 14(2)(a) of that directive, at the end of a period of three years. 32 By Directive 2000/36, the Community legislature provided that the addition of substitute vegetable fats is not to entail the use of different names for such products but the presence of additional information on the label. In the case of chocolate products to which vegetable fats other than cocoa butter have been added, Article 2 of Directive 2000/36, read in the light of recital 9 in the preamble to that directive, ensures that the consumer is provided with correct, neutral and objective information on the product concerned, in addition to the list of its ingredients, through use of the set phrase ‘contains vegetable fats in addition to cocoa butter’. 33 In that regard, but without requiring the use of any specific statement, recital 10 in the preamble to Directive 2000/36 states that the labelling may indicate that vegetable fats other than cocoa butter have not been added, provided the information is correct, neutral, objective, and does not mislead the consumer. 34 As regards an assessment of the compatibility of the Italian legislation with the provisions of Directive 2000/36, as summarised and placed in context above, it should be noted in the first place that Article 6 of Legislative Decree No 178/2003 provides that certain chocolate products which do not contain vegetable fats other than cocoa butter may display on the label the word ‘pure’ paired with the word ‘chocolate’, added to or incorporated in the sales name. If the addition of the words ‘milk’ or ‘white’ or ‘filled’ to the word ‘chocolate’ is to be regarded as producing an equivalent number of new sales names, so must the addition of the word ‘pure’. 35 The fact remains, however, that Directive 2000/36 makes no provision either for the sales name ‘pure chocolate’ or for the introduction of such a name by a national legislature. 36 In those circumstances, by permitting such an alteration of sales names, Article 6 of Legislative Decree No 178/2003 runs counter to the compulsory and complete system of sales names created under Article 3(1) of Directive 2000/36, as delimited by Article 4 of that directive. 37 In the second place, it should also be noted that, as the Commission argues, the system of double names introduced by the Italian legislature does not comply with the requirements of Article 2(1)(a) of Directive 2000/13, which provides that the consumer must have information that is correct, neutral and objective, and that does not mislead him. 38 Even though the Italian Republic, rightly, stated that consumers are entitled to correct information, the alteration of sales names, as in the present case, is not an appropriate method for achieving that objective. 39 It should be borne in mind that the Court has held that the addition of vegetable fats other than cocoa butter to cocoa and chocolate products which satisfy the minimum contents required by Directive 73/241, now replaced by Directive 2000/36, cannot substantially alter the nature of those products to the point where they are transformed into different products (see Case C‑12/00 Commission v Spain [2003] ECR I‑459, paragraph 92, and Commission v Italy, paragraph 87). 40 It is apparent from that case-law that the use of vegetable fats other than cocoa butter, within the limits set by Article 2(1) of Directive 2000/36, does not per se bring about sufficient alteration of those products to justify a difference in their sales names. 41 However, the inclusion in another part of the labelling of a neutral and objective statement informing consumers of the absence from the product of vegetable fats other than cocoa butter would be sufficient to ensure that consumers are given correct information (see, to that effect, Commission v Spain, paragraph 93, and Commission v Italy, paragraph 88). 42 Therefore, even though, according to the Italian legislation, use of the adjective ‘pure’ is not compulsory, authorisation to introduce sales names that are different from those provided for by Directive 2000/36 would suggest the existence of a difference between the essential characteristics of the products concerned. 43 That being so, inasmuch as it enables the coexistence of two categories of sales names essentially designating the same product, Article 6 of Legislative Decree No 178/2003 is likely to mislead consumers and thus interfere with their right to obtain correct, neutral and objective information. 44 It follows from the foregoing that Article 6 disregards the requirements of Article 3(1) of Directive 2000/36 and Article 2(1)(a) of Directive 2000/13. The first complaint is therefore well founded. The complaint alleging failure to fulfil the obligations under Article 3(5) of Directive 2000/36 45 In order to address this complaint raised by the Commission, it should be noted, as was stated in paragraphs 29 to 36 above, that Article 3 of Directive 2000/36, as delimited by Article 4 thereof, introduced full harmonisation of the sales names of chocolate products. As part of that compulsory and complete system, the addition of adjectives denoting quality is subject to compliance with the specific conditions laid down in Article 3(5) of that directive. 46 The fact remains that, far from complying with those conditions, Article 6 of Legislative Decree No 178/2003 provides that for certain chocolate products, including those referred to in Article 3(5) of Directive 2000/36, the word ‘pure’ may be added to or incorporated with the word ‘chocolate’ in sales names where those products do not contain vegetable fats other than cocoa butter. 47 It follows that, by permitting the addition of such a word, relating to a quality criterion, to the sales names of products listed in Article 3(5) of Directive 2000/36, Article 6 of Legislative Decree No 178/2003 appears not to comply with the requirements laid down in that provision. 48 The second complaint must therefore be upheld. 49 In the light of all the above considerations, it must be held that, by providing that the adjective ‘pure’ may be added to the sales name of chocolate products which do not contain vegetable fats other than cocoa butter, the Italian Republic has failed to fulfil its obligations under Article 3(5) of Directive 2000/36 and under Article 3(1) of that directive, read in conjunction with Article 2(1)(a) of Directive 2000/13. Costs 50 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 Commission has applied for costs and the Italian Republic has been unsuccessful in its pleadings, the latter must be ordered to pay the costs. On those grounds, the Court (First Chamber) hereby: 1. Declares that, by providing that the adjective ‘pure’ may be added to the sales name of chocolate products which do not contain vegetable fats other than cocoa butter, the Italian Republic has failed to fulfil its obligations under Article 3(5) of Directive 2000/36/EC of the European Parliament and of the Council of 23 June 2000 relating to cocoa and chocolate products intended for human consumption and under Article 3(1) of that directive, read in conjunction with Article 2(1)(a) of Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs; 2. Orders the Italian Republic to pay the costs. [Signatures] * Language of the case: Italian.

Judgment of the Court of First Instance (First Chamber, extended composition) of 16 April 1997. - Johannes Hartmann v Council of the European Union and Commission of the European Communities. - Action for damages - Non-contractual liability - Milk - Additional levy - Reference quantity - Producers having entered into non-marketing or conversion undertakings - Compensation - Regulation (EEC) No 2187/93 - Limitation period. - Case T-20/94. European Court reports 1997 Page II-00595 Summary Parties Grounds Decision on costs Operative part Keywords 1 Agriculture - Common organization of the markets - Milk and milk products - Additional levy on milk - Allocation of reference quantities exempt from levy - Producers who suspended deliveries pursuant to the non-marketing or conversion premium schemes and were therefore refused a reference quantity - Offer of flat-rate compensation under Regulation No 2187/93 - Producer bringing an action for damages embodying conditional acceptance of the offer - Producer to be regarded as having refused the offer (EC Treaty, Art. 215; Council Regulation No 2187/93, Arts 8(2) and 14) 2 Actions for damages - Limitation period - Starting point - Liability on account of Regulation No 857/84 resulting in a reference quantity not being allocated to milk producers who entered into a non-marketing undertaking - Date to be taken into consideration (EC Treaty, Arts 178 and 215; EEC Statute of the Court of Justice, Art. 43; Council Regulations Nos 1078/77 and 857/84) Summary 3 Regulation No 2187/93 providing for an offer of flat-rate compensation to producers of milk or milk products who entered into a non-marketing undertaking and were temporarily prevented from carrying on their trade on account of the subsequent failure to allocate them a reference quantity contains precise provisions relating to acceptance of the offer of compensation. More specifically, Article 14 provides that acceptance of the offer is signified by return to the competent national authority, within two months of receipt of the offer, of the receipt accompanying the offer. A producer who brings an action for damages in the Court of First Instance in which he states that he agrees to the offer, except as regards application of the limitation period laid down by Article 8(2) of the regulation, cannot be regarded as having accepted the offer made to him. On the one hand, acceptance cannot be signified in a form not provided for by the regulation and, on the other, it is clear from the wording of the regulation and from the nature of the offer as an offer in settlement that it can only be accepted unconditionally. 4 The limitation period laid down by Article 43 of the Statute of the Court of Justice for actions brought against the Community on grounds of non-contractual liability cannot begin before all the requirements governing the obligation to make good the damage are satisfied and, in particular, in cases where liability stems from a legislative measure, before the injurious effects of the measure have been produced. Those conditions consist of the existence of unlawful conduct on the part of the Community institutions, the fact of the damage alleged and the existence of a causal link between that damage and the loss claimed. In contrast, a declaration that the measure in question is invalid is not one of those requirements. As regards damage sustained by producers of milk or milk products who, as a result of non-marketing or conversion undertakings entered into pursuant to Regulation No 1078/77, were unable to be allocated a reference quantity in view of Regulation No 857/84 and hence to market any milk exempt from additional levy, time under the limitation period started to run on the date when Regulation No 857/84 began to have injurious effects on the producers concerned by preventing them from resuming marketing milk. Since, moreover, the damage was not caused instantaneously but recurred on a daily basis, with respect to the date of the event which interrupted the limitation period, the time bar under Article 43 of the Statute of the Court of Justice applies to the period preceding that date by more than five years and does not affect rights which arose during subsequent periods. Parties In Case T-20/94, Johannes Hartmann, residing at Hamminkeln (Germany), represented by Bernd Meisterernst, Mechtild Düsing, Dietrich Manstetten and Frank Schulze, Rechtsanwälte, Münster, with an address for service in Luxembourg at the Chambers of Lambert Dupong and Guy Konsbruck-Raus, 14 A Rue des Bains, applicant, v Council of the European Union, represented by Arthur Brautigam, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of Bruno Eynard, Director General of the Legal Affairs Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer, and Commission of the European Communities, represented by Dierk Booß, of its Legal Service, acting as Agent, and Hans-Jürgen Rabe and Georg M. Berrisch, Rechtsanwälte, Hamburg and Brussels, with an address for service in Luxembourg at the office of Carlos Goméz de la Cruz, of its Legal Service, Wagner Centre, Kirchberg, defendants, APPLICATION pursuant to Article 178 and the second paragraph of Article 215 of the EC Treaty and Council Regulation (EEC) No 2187/93 of 22 July 1993 providing for an offer of compensation to certain producers of milk and milk products temporarily prevented from carrying on their trade (OJ 1993 L 196, p. 6), for compensation for the losses sustained by the applicant owing to the fact that he was prevented from marketing milk as a result of Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13), as supplemented by Commission Regulation (EEC) No 1371/84 of 16 May 1984 (OJ 1984 L 132, p. 11), THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber, Extended Composition), composed of: A. Saggio, President, C.W. Bellamy, A. Kalogeropoulos, V. Tiili and R.M. Moura Ramos, Judges, Registrar: H. Jung, having regard to the written procedure and further to the hearing on 21 May 1996, gives the following Judgment Grounds Facts and relevant legislation 1 In 1977, in order to cut back surplus milk production in the Community, the Council adopted Regulation (EEC) No 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds (OJ 1977 L 131, p. 1). Under that regulation, producers had the opportunity to enter into an undertaking not to market milk or to convert their herds for five years in return for payment of a premium. 2 The applicant, a milk producer in Germany, entered into such an undertaking, which came to an end on 16 July 1986. 3 In 1984, in order to cope with persistent overproduction, the Council adopted Regulation (EEC) No 856/84 of 31 March 1984 (OJ 1984 L 90, p. 10), amending Regulation (EEC) No 804/68 of the Council of 27 June 1968 establishing a common organization of the market in milk and milk products (OJ, English Special Edition 1968(I), p. 176). The new Article 5c of the latter regulation introduced an `additional levy' on milk delivered by producers in excess of a `reference quantity'. 4 Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13; `Regulation No 857/84') fixed the reference quantity for each producer on the basis of production delivered during a reference year, namely the 1981 calendar year, subject to the Member States' opting for the 1982 or 1983 calendar year. That regulation was supplemented by Commission Regulation (EEC) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1984 L 132, p. 11; `Regulation No 1371/84'). 5 The undertaking entered into the applicant covered the reference year proposed. Since he had produced no milk in that year, he was ineligible for a reference quantity and, as a result, unable to market any quantity of milk exempt from additional levy. 6 By judgments of 28 April 1988 in Case 120/86 Mulder v Minister van Landbouw en Visserij [1988] ECR 2321, hereinafter `Mulder I', and Case 170/86 Von Deetzen v Hauptzollamt Hamburg-Jonas [1988] ECR 2355, the Court of Justice declared invalid Regulation No 857/84, as supplemented by Regulation No 1371/84, on the ground that it infringed the principle of protection of legitimate expectations. 7 In order to comply with those judgments, the Council adopted Regulation (EEC) No 764/89 of 20 March 1989 amending Regulation (EEC) No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1989 L 84, p. 2; `Regulation No 764/89'). Pursuant to that amending regulation, producers who had entered into non-marketing or conversion undertakings received a reference quantity known as a `special' reference quantity (or `quota'). Such producers are referred to as `SLOM I producers'. 8 Allocation of a special reference quantity was subject to several conditions. Some of those conditions were declared invalid by the Court of Justice by judgments of 11 December 1990 in Case C-189/89 Spagl [1990] ECR I-4539 and Case C-217/89 Pastätter [1990] ECR I-4585. 9 Following those judgments, the Council adopted Regulation (EEC) No 1639/91 of 13 June 1991 amending Regulation (EEC) No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1991 L 150, p. 35; `Regulation No 1639/91'), which granted the producers concerned a special reference quantity. Such producers are referred to as `SLOM II producers'. 10 In the meantime, one of the producers who had brought the action resulting in Regulation No 857/84 being declared invalid had instituted proceedings, together with other producers, against the Council and the Commission in which they sought compensation for the losses which they had sustained on account of their not having been granted a reference quantity under that regulation. 11 By judgment of 19 May 1992 in Joined Cases C-104/89 and C-37/90 Mulder and Others v Council and Commission [1992] ECR I-3061, hereinafter `Mulder II', the Court of Justice held that the Community was liable for the damage in question. It gave the parties one year to reach agreement on the amount of compensation. Since the parties were unable to come to an agreement, the proceedings were reopened in order to enable the Court of Justice to lay down the criteria for quantifying the loss in a judgment which would bring the proceedings to a close. 12 The effect of the judgment in Mulder II is that all producers who were prevented from producing milk solely because they had entered into a non-marketing or a conversion undertaking are, in principle, entitled to compensation for the damage sustained. 13 In view of the large number of producers affected and the difficulty in negotiating individual settlements, the Council and the Commission published on 5 August 1992 Communication 92/C 198/04 (OJ 1992 C 198, p. 4; hereinafter `the Communication' or `the Communication of 5 August'). After setting out the implications of the judgment in Mulder II, the institutions stated their intention to adopt practical arrangements for compensating the producers concerned in order to give full effect to that judgment. Until such time as those arrangements were adopted, the institutions undertook not to plead against any producer entitled to compensation that entitlement to claim was barred by lapse of time under Article 43 of the Statute (EEC) of the Court of Justice. However, that undertaking was made subject to the proviso that entitlement to compensation had not already been barred on grounds of time on the date of publication of the Communication or on the date when the producer had applied to one of the institutions. Lastly, the institutions assured producers that the fact that they did not make an approach to them as from the date of the Communication and until such time as the practical arrangements for compensation were adopted would not adversely affect them. 14 Following the Communication of 5 August, the Council adopted Regulation (EEC) No 2187/93 of 22 July 1993 providing for an offer of compensation to certain producers of milk and milk products temporarily prevented from carrying on their trade (OJ 1993 L 196, p. 6; `Regulation No 2187/93'). The regulation provided for an offer of flat-rate compensation to producers who had received special reference quantities under the terms laid down by Regulations Nos 764/89 and 1639/91. 15 Article 8 of Regulation No 2187/93 provides that compensation is to be granted only for the period for which the right to compensation is not time-barred. The date of interruption of the five-year limitation period set by Article 43 of the Statute of the Court of Justice is to be the date of the application addressed to a Community institution or the date of registration of an application brought before the Court of Justice or, at the latest, 5 August 1992, the date on which the aforementioned Communication was published [Article 8(2)(a)]. The starting date of the compensation is to be five years before the date of interruption of the limitation period and the closing date the date when the producer received a special reference quantity pursuant to Regulations Nos 764/89 and 1639/91. 16 Under the fourth paragraph of Article 14 of Regulation No 2187/93, acceptance of the offer is to imply relinquishment of any claim whatsoever against Community institutions in respect of the loss at issue. 17 By letter dated 30 April 1992, received on 4 May 1992, the applicant applied to the Council for compensation for his losses. By letter of 6 May 1992, the Council denied that the requirements for Community liability vis-à-vis the applicant were satisfied but, with a view to avoiding the bringing of an action, informed him that it waived its right to plead limitation until three months after publication of the judgment in Mulder II. It made it clear that that waiver applied only to rights which were not yet time barred on the date of the application for compensation. 18 On 26 November 1993, the applicant received from the competent German authority an offer of compensation for the damage sustained, made in conformity with Regulation No 2187/93. Pursuant to Article 8(2)(a) and (b) of that regulation, the offer did not cover the period 17 July 1986 to 3 May 1987. 19 The applicant did not accept that offer in the manner provided for in Article 14 of Regulation No 2187/93. Procedure and forms of order sought by the parties 20 By application lodged at the Court of First Instance on 22 January 1994, the applicant claimed that the institutions should be ordered to pay compensation calculated in accordance with Regulation No 2187/93 for the period between 17 July 1986, the date on which his non-marketing undertaking expired, and 29 March 1989, the date on which Regulation No 764/89 entered into force. 21 Apart from the claim for compensation, the application also sought annulment of Article 8(2)(a) and (b) of Regulation No 2187/93 in so far as those provisions preclude payment of compensation to him as from 17 July 1986. However, by letter received at the Registry on 21 February 1994, the applicant withdrew his claims for annulment. 22 On 22 January 1994 the applicant further lodged an application for interim measures in which he sought suspension of operation of Article 14 of Regulation No 2187/93. By order of 25 January 1994 (Case T-20/94, not published in the European Court Reports; hereinafter `order of 25 January'), the President of the Court of First Instance decided that the suspension of the time-limit laid down in the third paragraph of Article 14 of the regulation in question, as decided by interim order of 12 January 1994 in Case T-554/93 R Abbott Trust and Others v Council and Commission [1994] ECR II-1, would have effects with regard to the applicant. He stated that in the applicant's case the prescribed period would not expire before two weeks of the date of the order bringing other interlocutory proceedings to an end. Those proceedings closed on 1 February 1994 (order of the President of the Court of First Instance in Joined Cases T-278/93 R and T-555/93 R, T-280/93 R and T-541/93 R Jones and Others v Council and Commission [1994] ECR II-11). 23 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (First Chamber, Extended Composition) decided to open the oral procedure without any preparatory measures of inquiry. The parties were heard at the hearing on 21 May 1996. 24 In his application, the applicant claims that the Court should: - order the defendants jointly and severally to pay him, in accordance with Regulation No 2187/93, the sum of ECU 31 976.899 by way of compensation, together with interest at 8% per annum from 19 May 1992; - annul Article 8(2) of Regulation No 2187/93 in so far as that provision limits the period for which the applicant may be compensated; - order the defendants jointly and severally to pay the costs. 25 In his reply, the applicant withdrew his claims for annulment and maintained his damages claims, without referring to Regulation No 2187/93. 26 The Council, as defendant, claims that the Court should: - dismiss the application as inadmissible or, in the alternative, as unfounded; - order the applicant to pay the costs. 27 The Commission, as defendant, claims that the Court should: - dismiss the application as inadmissible or, in the alternative, as unfounded; - order the applicant to pay the costs, including those of the interlocutory proceedings and, in the alternative, those appertaining to the claim for annulment which was withdrawn. Admissibility - Arguments of the parties 28 The Council and the Commission maintain that the application is inadmissible for infringing Article 44 of the Rules of Procedure. 29 The Council asserts that the application lacks concrete arguments with regard to the alleged damage. In order to establish his losses, the applicant merely refers to the offer of compensation received pursuant to Regulation No 2187/93. Certain particulars of the applicant's alternative activities during the period when he was prevented from producing milk are also lacking. The particulars produced in the reply, in particular the expert's report, are not based exclusively on data relating to the applicant, but also on statistics relating to milk producers in general. The Council further questions whether the expert's report produced is well founded. Since the evidence is not conclusive, the application is admissible. 30 The Commission alleges that the particulars given in the application are not sufficiently precise to satisfy the requirements of Article 44 of the Rules of Procedure. According to the judgment in Mulder II (paragraphs 26 to 34), the applicant should have proved loss of earnings consisting, in principle, in the difference between the income which the applicant would have obtained if he had continued to produce milk and the income from any replacement activities. No such particulars are contained in the application. Moreover, even if the application had referred to Article 178 and the second paragraph of Article 215 of the EC Treaty - the only remaining avenue for obtaining compensation in this case - it would still be inadmissible. In such case, according to the case-law of the Court of Justice (Case 90/78 Granaria v Council and Commission [1979] ECR 1081, paragraph 5), an application for damages based on Articles 178 and 215 of the Treaty which did not specify the damage would not satisfy the requirements of the Rules of Procedure and would therefore be inadmissible. 31 In the light of the applicant's reliance in the reply on the second paragraph of Article 215 of the Treaty as the basis for his claim, the Commission avers that Regulation No 2187/93 and Article 215 of the Treaty differ in point of their conditions of application and their consequences. The obligation to prove damage is different in each case and the flat-rate calculation provided for by the regulation cannot replace the more complete presentation required by Article 215 of the Treaty in a situation where the regulation is not applicable. In addition, as far as the particulars adduced by the applicant in the reply are concerned, the applicant is precluded from raising them by the first subparagraph of Article 48(2) of the Rules of Procedure inasmuch as they constitute new pleas. 32 The Commission rejects the applicant's arguments with regard to the interpretation of Article 44(1)(c) and (6) of the Rules of Procedure. Article 44(6) provides for the regularization of the application only where paragraphs 3, 4 and 5, and not paragraph 1, have not been complied with. It follows from the case-law of the Court of Justice (Case 3/66 Alfieri v Parliament [1966] ECR 437, at 447) that an application for compensation which does not indicate the way in which the alleged loss was calculated is inadmissible. 33 The applicant maintains that the objection of inadmissibility is based on a misinterpretation of Article 44 of the Rules of Procedure. Infringement of paragraph 1 of that article does not have the consequences laid down in paragraph 6. Consequently, the rules on inadmissibility set out in paragraph 6 should not be extended to infringements covered by paragraph 1. 34 In any event, the subject-matter of the dispute and the pleas raised could be determined from the application. Furthermore, according to the case-law of the Court of Justice (Joined Cases 29/63, 31/63, 36/63, 39/63 to 47/63, 50/63 and 51/63 Laminoirs, Hauts Fourneaux, Forges, Fonderies et Usines de la Providence v High Authority [1965] ECR 911 and Granaria v Council and Commission, cited above), in the case of an action for damages it is unnecessary to quantify the damages claimed in the application where the application initially focuses on factors causing liability to be incurred. - Findings of the Court 35 First, a decision should be taken on the legal basis of the application, which seeks to establish liability on the part of the Community vis-à-vis the applicant. In this connection, contrary to the Commission's assertions, the Court considers that, by bringing an action to obtain compensation for damage sustained as a milk producer as a result of his not having obtained a quota pursuant to Regulation No 857/84, the applicant acted on the basis of the Community's liability as held in Mulder II, to which the second recital in the preamble to Regulation No 2187/93 refers. He therefore placed himself within the ambit of the application provided for by Articles 178 and 215 of the Treaty and supplemented the content of his application in the reply by relying on those provisions of the Treaty in case the right to flat-rate compensation provided for by Regulation No 2187/93 was not granted to him. Moreover, the institutions placed themselves in this area as from the defence. Accordingly, the allegation that there was an entitlement to compensation founded on Articles 178 and 215 of the Treaty was already implicitly embodied in the application. 36 It should next be recalled that, under Article 44(1)(c) of the Rules of Procedure, the application must set out the subject-matter of the proceedings and a summary of the pleas in law on which the application is based. 37 In the present case, the question whether the application satisfies the requirements set out in that provision must be determined within the specific framework of the milk quotas litigation. 38 On 26 November 1993, the applicant received an offer of compensation from the competent German authority in the name and on behalf of the Council and the Commission pursuant to Regulation No 2187/93, which is intended to compensate producers unlawfully refused reference quantities as a result of Regulation No 857/84 (see paragraph 14 of this judgment). Consequently, without prejudging at this stage the applicability of Regulation No 2187/93, which goes to the substance, it must be held that, by their offer, the institutions have recognized that the applicant fulfils the conditions laid down by the regulation, that is to say, damage resulting from the fact that the Community unlawfully prevented him from delivering milk. 39 In this context, the fact that the application alleges damage attributable to an act of the institutions is sufficient to satisfy the requirements of the Rules of Procedure, in so far as it follows on from the aforesaid offer of compensation. Moreover, the succinctness of the application has not prevented the Council and the Commission from defending their interests effectively. 40 Moreover, contrary to the Commission's contention, the application does refer to quantified loss. As for the question whether the loss was calculated in accordance with the guidance given in the judgment in Mulder II on replacement income, which was raised by the Commission, it falls to be considered in connection with whether the application is well founded and therefore cannot be discussed when considering whether it is admissible. 41 As for the pleas in law raised in the application, they may be set out very summarily, provided that the applicant, as in this case (see paragraph 141 below), provides all relevant information during the procedure (Case 74/74 CNTA v Commission [1975] ECR 533, paragraph 4), for instance by means of an expert's report. 42 Accordingly, since the claim as to entitlement to compensation was set out implicitly in the application (see paragraph 35 of this judgment), the express reference made in the reply to the second paragraph of Article 215 of the Treaty and the production, at the same stage, of evidence intended to substantiate the loss sustained do not constitute new pleas within the meaning of Article 48(2) of the Rules of Procedure. The Commission's argument must therefore be rejected. 43 It follows from the foregoing that the application contains sufficient information to satisfy the requirements of the Rules of Procedure. 44 The application is therefore admissible. Liability of the Community 45 The applicant relies in support of his claims, first, on application of Regulation No 2187/93 and, secondly, on the existence of a right to compensation based on Article 215 of the Treaty. Application of Regulation No 2187/93 - Arguments of the parties 46 The applicant refers in his claim to Regulation No 2187/93, which he maintains is applicable to his situation. 47 He submits that the time-limit for accepting the offer which he received had not yet expired on 22 January 1994, the date on which he lodged his application. Subsequently, the order of 25 January temporarily stopped time running until a future order was given, yet without fixing when the time-limit would expire. It therefore fixed only a minimum duration. 48 Moreover, the applicant maintains that he accepted the offer in his application. He points out that he signified his agreement to the conditions of the Council's offer, except as regards the period for which compensation was to be paid. 49 The applicant considers the defendants' argument that he did not accept the offer in the manner required by the regulation to be contrary to the principle of protection of legitimate expectations. In his view, the interlocutory proceedings which he brought in Case T-20/94 R are closely connected with the proceedings in Cases T-278/93 R, T-554/93 R and T-555/93 R. By his order of 25 January, the President of the Court of First Instance referred to the whole of the grounds of the order in Case T-554/93 R Abbott Trust and Others v Council and Commission, in which the Council and the Commission recognized that producers satisfying the conditions laid down for qualifying for the flat-rate compensation provided for by Regulation No 2187/93 are unquestionably entitled to compensation for their losses. By asserting that the regulation in question is not applicable to the applicant because he did not accept the offer, the defendants are at odds with their former position. If he had not placed reliance in those statements, which he construed as implicitly recognizing producers' entitlement to the amount of the offer of compensation received, the applicant would have accepted the offer in the manner laid down to that end. 50 The Council asserts in the first place that the interim order of 25 January 1994 cannot be relied upon in order to claim that the time for accepting the offer of compensation has not expired. On the contrary, it appears from that order that time ran out on 15 February 1994. 51 It considers that an argument cannot be based on declarations allegedly made in the interim proceedings in Cases T-278/93 R, T-555/93 R, T-280/93 R and T-541/93 R to which the applicant refers. The declarations cited by the applicant were quoted out of context. In fact, it is clear from the declarations made by the Council and the Commission in those proceedings that a producer satisfying the requirements of Regulation No 2187/93 is entitled to compensation but that, outside the offer of flat-rate compensation provided for by that regulation, especially in the event of the annulment of the regulation by the Court of First Instance, compensation would be payable only for damage actually proved by the producer. 52 The Commission considers that the applicant cannot base his claim on Regulation No 2187/93. That regulation is not applicable in this case because the applicant did not accept in time the offer made to him. The deadline for accepting the offer was 15 February 1994 as a result of the interlocutory order of the President of the Court of 25 January 1994. The applicant's interpretation, which would be tantamount to acceptance of the offer more than one year after the order, is precluded by the principle of legal certainty. 53 In any event, the applicant did not accept the offer by bringing his action. It is clear from the application that he does not agree to the main items of the offer. In any case, the formalities laid down by Article 14 of Regulation No 2187/93 were not complied with. 54 The Commission considers that the applicant's reliance on the principle of protection of legitimate expectations is a new plea by comparison with the application and that, under Article 48(2) of the Rules of Procedure, that plea cannot be taken into account. 55 It further asserts that if that plea were eligible to be considered, it would be without foundation. 56 In the first place, inaccurate citations were made in connection with that plea, since the order in Case T-20/94 R drew an analogy only between that case and Case T-554/93 R, not with Case T-555/93 R. 57 Furthermore, the applicant has not shown that he had notice of the Council's position before the deadline for acceptance expired. Only if he had had such notice, could he have relied on the Council's position. 58 Lastly, the alleged infringement of the principle of protection of legitimate expectations could not have the effect of obliging the defendants to treat the applicant as if he had accepted the offer of compensation. - Findings of the Court 59 Regulation No 2187/93 contains precise provisions relating to acceptance of the offer of compensation. Article 14 provides that the offer is to be accepted by return to the competent national authority, within two months of receipt of the offer, of the receipt accompanying the offer. 60 In this case, since the applicant received the offer of compensation on 26 November 1993, the deadline for accepting it expired on 26 January 1994. 61 Before that deadline expired, the applicant brought an application for interim measures (Case T-20/94 R) in which he sought suspension of operation of Article 14 of Regulation No 2187/93. By interlocutory order of 25 January 1994, cited above, the President of the Court granted that application. Suspension was ordered, vis-à-vis the applicant, until two weeks after the date of the order closing the interim proceedings in Case T-555/93 R Jones and Others v Council and Commission, which also sought suspension of operation of the same provision. 62 In the latter case, the interim order was given on 1 February 1994. The deadline for accepting the offer sent to the applicant expired on 15 February 1994. 63 Up to that date, the applicant did not accept the offer on the terms laid down by Article 14 of Regulation No 2187/93. 64 The applicant cannot claim that he accepted the offer by his application lodged on 22 January 1994. 65 On the one hand, Regulation No 2187/93 lays down specific detailed rules and conditions for accepting the offer. Consequently, acceptance cannot be signified in a form not provided for by the regulation. 66 On the other, in his application, the applicant states that he agrees to the offer, except as regards application of the limitation period laid down by Article 8(2) of the regulation. It is clear, however, from the wording of Regulation No 2187/93 and from the nature of the offer as an offer in settlement (see especially Article 14) that it can only be accepted unconditionally. 67 Neither can the applicant claim that the defendants' challenge to his acceptance of the offer is contrary to the principle of protection of legitimate expectations. Without its being necessary to consider to what extent the applicant is entitled to rely on a declaration made in proceedings to which he was not a party, suffice it to say that such a declaration by the defendants has neither the meaning nor the effects alleged by the applicant. By stating that producers fulfilling the requirements for compensation under Regulation No 2187/93 would be entitled to compensation even if they rejected the offer, the institutions merely reaffirmed the rights arising for producers under the judgment in Mulder II and observed that it was possible to assert them outside the context of that regulation. 68 It follows from the foregoing that the applicant did not accept the offer made to him under Regulation No 2187/93. Accordingly, he derives no right from that regulation. Existence of any right to compensation pursuant to Article 215 of the Treaty 69 The applicant relies on the loss sustained throughout the period when he was prevented from producing milk as a result of Regulation No 857/84. 70 The defendants contest whether the losses claimed were genuinely sustained. 71 As regards the damages claim, the Court finds that it appears from Mulder II that the Community incurred liability vis-à-vis each producer who suffered reparable injury owing to his having been prevented from delivering milk as a result of the application of Regulation No 857/84, as the institutions acknowledged in their Communication of 5 August (paragraphs 1 and 3). 72 In the light of the documents exhibited to the Court, which the defendants have not challenged, the applicant is in the situation of producers referred to in that Communication. Since he had entered into a non-marketing undertaking pursuant to Regulation No 1078/77, he was prevented, as a result of Regulation No 857/84, from resuming the marketing of milk when those undertakings expired. 73 Moreover, on 23 November 1993, the competent German authority made him an offer of compensation for the damage sustained, in the name and on behalf of the Council and the Commission, pursuant to Regulation No 2187/93. 74 In those circumstances, the applicant is entitled to compensation from the defendants for his loss. 75 However, in order to quantify the amount of damages, the extent of the right to compensation needs to be determined, especially the period for which compensation is payable. It must therefore be considered whether and to what extent the applicant's claims are time barred. Limitation - Arguments of the parties 76 As regards the period between 17 July 1986 (the date on which marketing of milk could not be resumed following the expiry of the non-marketing undertaking) and 3 May 1987 (the day before the end of the five-year period prior to receipt of the letter asking the institutions for compensation), the applicant submits that the limitation period laid down by Article 43 of the Statute of the Court of Justice did not begin until 28 April 1988 (date of the judgment in Mulder I) and that therefore his rights are not time barred. As regards the period between 4 May 1987 and 29 March 1989 (date of entry into force of Regulation No 764/89 abolishing the obstacle precluding resumption of marketing of milk), the applicant maintains that his rights are not time barred either, even if the date of the judgment in Mulder I is not taken as the starting point of the limitation period. For their part, the institutions contend that the limitation period cannot begin running after 17 July 1986. - Period between 17 July 1986 and 3 May 1987 77 The applicant avers, with regard to the period between 17 July 1986 and 3 May 1987, that his claim is not time barred, on the ground that the limitation period did not start running until the date of the judgment in Mulder I. The fact that the invalidity of Regulation No 857/84 found by the Court of Justice has effects as from the date when the regulation entered into force, namely 2 April 1984, has no bearing on the question of limitation. According to the case-law of the Court of Justice (Joined Cases 256/80, 257/80, 265/80, 267/80 and 5/81 Birra Wührer and Others v Council and Commission [1982] ECR 85 and Case 51/81 De Franceschi v Council and Commission [1982] ECR 117), the limitation period laid down by Article 43 of the Statute of the Court of Justice cannot begin unless all the requirements governing the obligation to provide compensation for damage are satisfied. It also appears from the case-law (Case 145/83 Adams v Commission [1985] ECR 3539, `Adams', paragraph 50) that where the victim only belatedly became aware of the event giving rise to the damage, time cannot start running until he became aware of that event. 78 Since there is a strong presumption that regulations are lawful, the applicant's situation is even less favourable than that of Mr Adams, who was the subject of an individual decision. The presumption of legality is reinforced by the requirements laid down by the case-law of the Court of Justice with regard to reviewing the conformity of regulations with the Treaty. Moreover, the requirements for an individual to bring an action under Article 173 of the Treaty were not met. Furthermore, even if such an application had been admissible, it would not have had suspensory effect. The act would have remained in force until such time as it was annulled, which would mean that the limitation period would have continued to run as against all those persons who had relied on the conformity of the regulation with the legal order. 79 The applicant maintains that the Community cannot incur liability unless the act which gave rise to the damage is unlawful and the said unlawfulness constitutes a sufficiently serious breach of a superior rule of law for the protection of individuals (Case 5/71 Zuckerfabrik Schöppenstedt v Council [1971] ECR 975). Consequently, the fact that a legislative measure, such as a regulation, is unlawful does not ipso facto cause the Community to incur liability. Consequently, it cannot be said that it was for the applicant to raise the question of the legality of Regulation No 857/84, especially since liability for legislative acts is unknown to the legal systems of most Member States. To adopt such an approach would, moreover, result in every Community regulation of doubtful legality being systematically scrutinized. 80 In conclusion, the applicant argues that, in view of the specific nature of regulations, there is only awareness of the act which gave rise to damage, within the meaning of the case-law of the Court of Justice, when its illegality has been established. The limitation period for an action for compensation could therefore not commence running before the Court has declared the act unlawful. 81 The applicant goes on to assert that the legal situation of SLOM producers was particularly ambiguous and vague. He could not reasonably have been expected to have brought an action for damages before the legal situation had been clarified. In this connection, the case-law of the superior German courts has established that, where the legal situation is particularly confused and uncertain, the injured party is not deemed to have been aware of the event which gave rise to the damage and is entitled to wait until the situation has been clarified. Accordingly, the limitation period does not begin where, as a result of such a situation, major legal ambiguities preclude awareness of the damage or make it impossible for the institution under the obligation to make reparation for it. Since the Court of Justice and the Court of First Instance have not yet ruled this issue, the solution adopted in German law could be used here, particularly since the relevant requirements are satisfied. The Council's argument that the applicant spared himself the costs and risks of litigation is therefore completely baseless. The implicit consequence of such an argument would be congestion of national and Community courts. Economy of proceedings also commends the solution put forward by the applicant. 82 The applicant contests the Commission's claim that he should have brought an action immediately after the judgment in Mulder I in order to avoid any limitation problem. In his view, the problem of limitation cannot be settled in the light of a particular case. On the contrary, the date on which the limitation period begins should be determined in a general manner. The applicant argues that, on the Commission's approach, where a judgment declares a regulation unlawful more than five years after the date on which all the other requirements for Community liability were satisfied, the rights of all those persons who did not bring proceedings are time barred. In such a situation, the rights to compensation of victims who did not bring an action would depend on chance, that is to say, on how long it took for a case to be decided. The risk would be even greater where an act had to be found invalid in preliminary-ruling proceedings. In short, if proceedings extended beyond five years, the period laid down by Article 43 of the Statute of the Court of Justice, as interpreted by the Commission, would be too short to enable victims to uphold their rights. 83 The applicant considers that, for a producer in his situation, recourse to national courts would have been the most obvious solution, since producers thought that the national authorities had mistakenly failed to allocate them reference quantities. Moreover, the Council and the Commission had intimated in Mulder I that the Federal Republic of Germany was entitled to assist producers in the context of Regulation No 857/84. Nevertheless, the right to compensation could not be relied upon as against the Community until the Court of Justice had declared the regulation invalid. 84 Lastly, the applicant argues that a declaration that the act was unlawful is among the requirements to which the obligation to make reparation is subject and that, according to the case-law of the Court of Justice, those requirements have to be met before the limitation period can start to run. He stresses that, even if the finding that the regulation was invalid was sufficient to cause time to start running, the outcome of any action for damages brought immediately was still very uncertain, since Community liability vis-à-vis SLOM producers was not finally recognized until 1992. 85 In conclusion, he considers that the conditions laid down in Birra Wührer and De Franceschi with regard to the commencement of the limitation period were not satisfied until 28 April 1988, the date of the judgment in Mulder I. 86 The Council acknowledges that the applicant interrupted the limitation period by his letter received on 4 May 1992. In its reply of 6 May 1992, the Council waived its right to plead limitation until the judgment in Mulder II. Accordingly, the period for which the claim was time barred was between 17 July 1986, the date of the end of the non-marketing undertaking, and 4 May 1987, the date five years before the date on which the limitation period was interrupted. In addition, since the applicant had been aware since 28 April 1988 that Regulation No 857/84 was invalid, he could have brought an action as from that date, in common with the applicants in Mulder II. In any event, it is settled law that a judgment, such as that given in Mulder I on a reference for a preliminary ruling, which declares a regulation invalid, is retroactive to the date when the act in question entered into force. 87 The Birra Wührer and De Franceschi case-law is very clear. For the purposes of fixing the date on which the limitation period starts, it does not require knowledge that the act which gave rise to the damage was invalid. Moreover, in those cases, some of the applicants' claims were held to be time barred precisely because, in full awareness of the facts, they waited for other applicants to obtain compensation before they themselves brought proceedings. The applicant's interpretation is contrary to the requirements of legal certainty which underlie the fixing of limitation periods and mean that damage caused by a legislative act can be compensated for only for a limited period. According to the case-law, liability ensuing from such an action should be interpreted strictly (Joined Cases 83/76 and 94/76, 4/77, 15/77 and 40/77 HNL and Others v Council and Commission [1978] ECR 1209). 88 The Council concludes by stating that a strict interpretation would not be unreasonable. The instance of the applicant, who interrupted the limitation period by means of his letter received on 4 May 1992, shows that it was possible for producers to safeguard most of their rights in good time. 89 Contesting the applicant's arguments based on German case-law, the Council avers that a solution derived from national law cannot dictate a particular interpretation of the provisions relating to liability on the part of the Community. 90 As regards the judgment in Adams, referred to by the applicant, the Council admits that in that case the Court of Justice held that a person who is unaware of the cause of damage is protected against limitation. However, the Court of Justice did not hold that it was necessary to be aware of the illegality of the act which caused the damage in order for the limitation period to begin running. In this case, the applicant was aware of the cause of the damage, namely application of Regulation No 857/84, as from the end of the non-marketing period. From that time on, producers could have contacted the institutions and interrupted the limitation period in accordance with Article 43 of the Statute of the Court of Justice. In that event, the institutions would have waived pleading limitation until delivery of the judgment in Mulder II. 91 In conclusion, the Council claims that the application should be dismissed. 92 The Commission also considers that the applicant's claims based on Article 215 of the Treaty are time barred in so far as they refer to rights which arose between 17 July 1986 and 3 May 1987. It relies on three arguments, alleging respectively that the limitation period laid down by Article 43 of the Statute of the Court of Justice began running at the latest on 17 July 1986, that the applicant claims that he interrupted the limitation period on 4 May 1992 and that pleading limitation is not in breach of good faith. 93 As regards the application of Article 43 of the Statute of the Court of Justice, the Commission states that, according to the case-law of the Court of Justice (Birra Wührer and De Franceschi, at paragraph 10), the limitation period begins when all the requirements governing the obligation to provide compensation for damage are satisfied and, in particular, when the damage to be made good has materialized. In this case, the limitation period began at the end of the applicant's non-marketing period, namely on 17 July 1986. 94 Contrary to the applicant's assertions, it does not follow from the judgment in Adams that the limitation period did not commence until the Court of Justice declared Regulation No 857/84 invalid. In order for the limitation period to start running, the judgment in Adams (paragraph 50) required the applicant to be aware only of the cause of the damage, not of its illegality. In this case, the cause of the damage was Regulation No 857/84, and the applicant became aware of it at the latest when he was prevented from delivering milk, that is to say, on 17 July 1986. 95 In so far as entitlement to compensation under Article 215 of the Treaty is not contingent upon the Court of Justice having first declared the act which gave rise to the damage unlawful, the declaration that Regulation No 857/84 was unlawful had no effect on the starting date of the limitation period. If, in the case of damage caused by a legislative measure, the limitation period did not start until the date on which that measure was declared invalid, limitation would, in view of the procedural time-limits, be deprived of effectiveness, namely its effect of having a situation clarified judicially as soon as possible. Furthermore, such an approach would be at odds with the view of the Court of Justice that Community liability on account of unlawful acts committed by the Community legislature should be exceptional (HNL and Others v Council and Commission, paragraphs 4 and 5). 96 In the Commission's contention, there is no difference between the situation of the addressee of an individual act and that of the victim of damage caused by a regulation as far as the limitation period, a declaration of invalidity and the suspensory effect of bringing proceedings are concerned. The fact that the limitation period continues to run as far as non-applicants are concerned where an action is brought against a measure of general scope is simply the normal risk run by persons who refrain from bringing proceedings. 97 The Commission contests the applicant's argument based on the claim that the legal situation of SLOM producers was not clarified. The German courts' case-law is inapplicable in this case since Article 43 of the Statute of the Court of Justice, unlike Article 215 of the Treaty, does not refer to the law of the Member States. Furthermore, German law does not admit of the possibility of claiming liability on the part of the public authorities in the event of an unlawful act committed by the legislature. Consequently, the German supreme court would never have to rule on whether such a right was time barred. 98 In any event, the fact that other producers did bring actions against the Community shows that the applicant could also have taken this route. The applicant did not do so because he did not want to take any risks. Accordingly, he waited for six years after the judgment in Mulder I was delivered before bringing an action. Moreover, he is represented by lawyers who had already been instructed in some of the milk quotas cases. There had been nothing to prevent him taking the same route. 99 As far as interruption of the limitation period is concerned, the Commission alleges that application of the criteria set out in the judgments in Birra Wührer and De Franceschi results in the application being time barred as regards the period prior to 4 May 1987. Even if the applicant had interrupted the limitation period by means of his letter received on 4 May 1992, the period for which compensation is payable would have begun five years earlier, namely on 4 May 1987. All damage prior to that date is therefore time barred. Compensation therefore covers only the period between that date and the date on which the applicant was once again in a position to be allocated a special reference quantity, that is to say, 28 March 1989. 100 Lastly, the Commission submits that it is not a breach of good faith to plead limitation, in any case not in respect of the period prior to 4 May 1987. Neither the Commission's answer to the applicant's letter of 30 April 1992 nor the Communication of 5 August, in conjunction with the offer made by Regulation No 2187/93, suggested that limitation would not be pleaded. In so far as those acts waived limitation, they did not cover rights which were already time barred. In those circumstances, the defendants are entitled to plead limitation in respect of rights which were no longer enforceable on 4 May 1992. - The period between 4 May 1987 and 29 March 1989 101 As regards the period between 4 May 1987 and 29 March 1989, the applicant avers that the Commission's claim that all his rights are time barred as from 16 July 1991 (five years after the onset of the damage) is based on a misunderstanding of the issue. Since milk is produced daily, the applicant suffered damage every day since 17 July 1986, the day after his non-marketing undertaking expired, and so long as he was deprived of a reference quantity. Consequently, the effects of the act which caused the damage did not come to an end until he resumed milk production. Since the damage continued over time, each day caused a new limitation period to run. A calculation of this type, moreover, underlay the draft of Regulation No 2187/93 (document COM(93) final of 21 March 1993, p. 6) and the proposal for compensation which the Council made to the applicant. In any case, only the period between 4 May 1987 and 29 March 1989 is time barred. 102 The Commission's arguments that the Communication of 5 August does not prevent it from pleading limitation against the applicant are contradictory. According to the Communication, the Commission undertook not to plead limitation in respect of rights which were not yet time barred on 5 August 1992. The fact that the damage recurred daily precludes the Commission, as a result of the Communication, from pleading limitation in respect of the period between 4 May 1987 and 29 March 1989. Moreover, the Commission reached exactly the same conclusion in its defence as regards rights derived from Regulation No 2187/93. Consequently, the Commission could not, without contradicting itself, defend a different calculation of the limitation period in respect of rights derived from Article 215 of the Treaty. To do so would disregard the fact that, in this case, what is involved is damage which recurred on a daily basis and that Regulation No 2187/93 is based on Article 215 of the Treaty. The latter considerations suffice to rule out the possibility of calculating limitation differently in the two cases. Furthermore, the Commission's interpretation is unfair to the applicant, since his right to compensation has already been recognized. 103 The Commission claims that the conditions for an action for damages were satisfied on 17 July 1986, the date on which the applicant was prevented from resuming the marketing of milk. Consequently, the limitation period began to run on that date, with the result that all the applicant's rights were time barred on 17 July 1991, that is to say, five years after the date when the period began. What is more, there is nothing to prevent the institutions from pleading limitation (see paragraph 96 of this judgment). The Commission states that, in its view, Regulation No 2187/93 is not applicable in this case. Consequently, Article 8 thereof cannot be taken into consideration in proceedings based on Article 215 of the Treaty. The fact that, in its preliminary draft for the regulation in question and in calculating the offer of compensation, the Commission based itself on the concept of a right to compensation recurring each day does not have the consequences claimed by the applicant. In any event, since the applicant is entitled to derive rights only from Article 215 of the Treaty, limitation can be governed only by Article 43 of the Statute of the Court of Justice. It is not possible, in interpreting that provision, to invoke Article 8 of Regulation No 2187/93, which, moreover, is a lower-ranking provision. 104 In any event, should the damage at issue be of a recurring nature, the Commission draws the Court's attention to the fact that after he received its letter of 30 April 1992 on 4 May 1992, the applicant did not bring proceedings within the time-limit laid down by the third sentence of Article 43 of the Statute of the Court of Justice. It infers from this that it is doubtful whether he can rely on the limitation period having been interrupted on that date. In those circumstances, the limitation period was not interrupted until 22 January 1994 when the action was brought. Consequently, the applicant's rights are time barred in respect of all damage preceding that date by more than five years, that is to say, damage sustained before 22 January 1989. 105 The Council does not claim that the applicant's rights are time barred in respect of the period 4 May 1987 to 29 March 1989. - Findings of the Court 106 In order to determine to what extent the claim is time barred, it is necessary first to fix the date on which the damage materialized, before determining the date on which any act interrupting the limitation period occurred. 107 The limitation period laid down by Article 43 of the Statute of the Court of Justice cannot begin before all the requirements governing the obligation to make good the damage are satisfied and, in particular, in cases where liability stems from a legislative measure, before the injurious effects of the measure have been produced (Birra Wührer and De Franceschi, at paragraph 10). Those conditions consist of the existence of unlawful conduct on the part of the Community institutions, the fact of the damage alleged and the existence of a causal link between that conduct and the loss claimed (Case 4/69 Lütticke v Commission [1971] ECR 325, paragraph 10; Case T-478/93 Wafer Zoo v Commission [1995] ECR II-1479, paragraph 47). 108 In this case, the applicant sustained damage as from the day on which, following the expiry of his non-marketing undertaking, he could have resumed milk deliveries if he had not been refused a reference quantity. That damage was directly caused by a legislative act, namely Regulation No 857/84, which was declared invalid by the judgment in Mulder I. 109 Having regard to the arguments of the parties, it must be considered whether satisfaction of the requirements on which the Community's obligation to make reparation depend - which determines the starting point of the limitation period - occurred on the date when the damage materialized, in accordance with the judgments in Birra Wührer and De Franceschi and the defendants' contentions, or whether it occurred at the date of the judgment in Mulder I, declaring Regulation No 857/84 invalid, as the applicant maintains. 110 As far as the first argument is concerned, the applicant is not entitled to claim, on the basis of the judgment in Adams, that, in a situation such as the one at issue, where he allegedly only belatedly became aware of the event which give rise to the damage, the limitation period did not begin until that date. 111 The facts of the Adams case were different. The applicant in the Adams case had suffered damage the apparent cause of which was not conduct on the part of the Commission. That damage had arisen in circumstances such that he could be presumed not to suspect any liability on the part of the Community. In such a context, account has indeed to be taken of the time when the applicant became aware of the event which caused the damage. Consequently, the Court of Justice held that expiry of the limitation period cannot constitute a valid defence to a claim by a person who has suffered damage where that person only belatedly became aware of the event giving rise to it and could not have had a reasonable time in which to react thereto (Adams, paragraph 50). 112 Furthermore, as the Council and the Commission have observed, it does not follow from the judgment in Adams that time under the limitation period does not start to run until the person who suffered the damage has become aware of the illegality of the act. What the Court of Justice emphasized is the importance of awareness of the event which gave rise to the damage and not of its illegality. In this case, however, the applicant could have been in no doubt at the time when he was prevented from marketing milk that that situation was the consequence of the application of a legislative measure, Regulation No 857/84. 113 In those circumstances, the first argument must be rejected. 114 As far as the second argument is concerned, the applicant cannot usefully rely on the presumption that regulations are lawful. 115 It has been consistently held that actions for damages are independent of actions for annulment (order of 21 June 1993 in Case C-257/93 Van Parijs and Others v Council and Commission [1993] ECR I-3335, paragraphs 14 and 15). It follows that it was unnecessary for Regulation No 857/84 to have been annulled or declared invalid before an action for damages could be brought. In this case, therefore, there was nothing to prevent the applicant from bringing an action for damages as soon as he sustained damage. 116 In that connection, the applicant's assertions as to the very restrictive conditions to which the case-law (Zuckerfabrik Schöppenstedt v Council, cited above, paragraph 11) subjects Community liability on account of a legislative measure (see paragraph 79 of this judgment) are irrelevant. In fact, those conditions are verified only when the question of the existence of an obligation to make reparation has to be considered as a substantive matter. The applicant, however, did not bring an action for damages in good time; the mere bringing of such an action would have had the effect of interrupting the limitation period immediately. In view of that consequence, the difficulties in such an application succeeding are irrelevant. 117 The argument raised is incapable of justifying the inaction on the part of the applicant, who did not approach the institutions until four years after the Court of Justice declared invalid the measure which had given rise to the damage which he had sustained, whereas other producers - the applicants in Mulder II - whose situation was similar to his, brought an action in good time and obtained a decision holding that the Community was under an obligation to pay compensation. 118 It must be emphasized that, where an application for annulment is brought against a regulation which has given rise to damage or where a request for a preliminary ruling on the validity of such a regulation is made, as in the case of the applicants in Mulder I, time under the limitation period continues to run against all other persons who have sustained damage but not brought court proceedings. Since damage is caused to each of them by the legislative measure, it is incumbent upon them to seek compensation from the institutions or, where appropriate, to bring judicial proceedings against them within the time-limit laid down by Article 43 of the Statute of the Court of Justice, failing which the right to bring proceedings will be extinguished. 119 Consequently, the second argument must be rejected. 120 As regards the third argument, the applicant cannot rely on the ambiguous, vague nature of the SLOM producers' situation. 121 It appears from what the applicant himself says that that uncertainty was due to the fact that, until judgment was given in Mulder I, it was unclear whether the Community or the Member States were liable for the SLOM producers' situation. 122 Since the uncertainty was confined to that question alone, it was incumbent on producers who had sustained damage to interrupt the limitation period vis-à-vis both the national authorities and the Community. 123 In that regard, the Court finds that the applicant did not make a direct approach to the institutions until his letter dated 30 April 1992, received by the Council on 4 May 1992, by which he sought compensation. Likewise, it is undisputed that he brought no judicial proceedings before the judgment in Mulder II. 124 Yet there was nothing to prevent him from bringing an action for damages, which, as has been consistently held, could have been brought in the absence of the prior annulment of Regulation No 857/84 or of a declaration that it was invalid. 125 In those circumstances, the third argument must be rejected. 126 Lastly, as regards the fourth argument, the applicant is not entitled to claim that a declaration of the invalidity of the act which gave rise to the damage is one of the requirements on which the obligation to make reparation depends and whose satisfaction, by virtue of the judgments in Birra Wührer and De Franceschi, constitutes the starting point of the limitation period. 127 It must be recalled that time under the limitation period cannot begin running until the right to bring proceedings can be exercised. 128 Accordingly, the applicant's argument is tantamount to making the right to bring an action for damages depend on the act which caused the damage having first been annulled or declared invalid. Consequently, he is denying that actions for damages under Articles 178 and 215 of the Treaty are independent of actions for annulment; the fact that they are so independent enables an action for damages to be brought without there first having been an action for annulment, and therefore secures greater protection for individuals. 129 The fourth argument must therefore also be rejected. 130 Consequently, it must be held that in this case time began running under the limitation period on 17 July 1986, the date on which Regulation No 857/84 began to have injurious effects on the applicant by preventing him from resuming marketing milk. 131 The Commission is not entitled to claim that the applicant's damages claim is time-barred in its entirety five years after 17 July 1986, that is to say, on 17 July 1991. 132 The damage which the Community must make good was not caused instantaneously on 17 July 1986. The damage continued for a period, that is to say, for so long as the applicant was unable to obtain a reference quantity and, as a result, to deliver milk. The damage was continuous and recurred on a daily basis. As a result, with respect to the date of the event which interrupted the limitation period, the time bar under Article 43 of the Statute of the Court of Justice applies to the period preceding that date by more than five years and does not affect rights which arose during subsequent periods. 133 It follows from the foregoing that, in order to determine to what extent the applicant's rights are time barred, it is necessary to fix the date on which the limitation period was interrupted. 134 As far as this question is concerned, it is clear from the material in the case-file that the applicant interrupted the limitation period by means of a letter sent to the Council which was received on 4 May 1992. Under Article 43 of the Statute of the Court of Justice, an action for damages should have been brought within two months of the Council's reply. 135 However, it appears that, by letter dated 6 May 1992, the Council, seeking to avoid an action for damages, waived its right to plead limitation against the applicant in respect of rights not yet time barred (rights relating to the five-year period prior to 4 May 1992, the date on which the limitation period was interrupted) until three months following publication of the judgment in Mulder II in the Official Journal of the European Communities. Consequently, that letter of 6 May sought to induce the applicant not to bring proceedings within the two-month period laid down by Article 43 of the Statute of the Court of Justice. Accordingly, it signified that, in the circumstances indicated therein, the Council waived the right to plead that such an action had not been brought. 136 By their Communication of 5 August, following on from the Court of Justice's recognition of producers' right to compensation (see paragraph 13 of this judgment), the Council and the Commission extended the period for which that waiver was effective. By paragraphs 2 and 3 of the Communication, the institutions undertook not to plead limitation under Article 43 of the Statute of the Court of Justice until the end of the period for lodging applications for compensation, for which practical arrangements were to be adopted at a later date. 137 Those practical arrangements were adopted by means of Regulation No 2187/93. Under the second subparagraph of Article 10(2) of that regulation, the institutions' self-imposed restriction of their right to plead limitation came to an end on 30 September 1993 as regards producers who had not made an application for compensation under that regulation. It follows from the system of the regulation that, in the case of producers who had made such an application, the self-imposed restriction ended at the end of the period for accepting the offer made pursuant to the application. 138 On 26 November 1993, an offer of compensation was made to the applicant in the name of the Council and the Commission in response to an application from him. Since the application in this case was lodged on 22 January 1994, it must be held that it was brought within the two-month time-limit prescribed by Article 14 of Regulation No 2187/93 for accepting the offer and hence during the period in which the institutions had undertaken not to plead limitation. 139 The Court finds that, having regard to Article 43 of the Statute of the Court of Justice, the limitation period was duly interrupted by the applicant by the letter which he sent to the Council on 30 April 1992, which was received on 4 May 1992, since the institutions waived their right to plead, and hence cannot rely on, the period between that date and the date on which the action was brought. Accordingly, the limitation period was interrupted on 4 May 1992. 140 According to the case-law (Joined Cases 256/80, 257/80, 265/80, 267/80, 5/81, 51/81 and 282/82 Birra Wührer and Others v Council and Commission [1984] ECR 3693, paragraph 16), the period for which compensation is payable is the five years preceding the date on which the limitation period was interrupted. It therefore extends from 4 May 1987 to 28 March 1989, which was the day before the entry into force of Regulation No 764/89, which put an end to the damage sustained by the applicant by enabling SLOM I producers thereafter to be allocated special reference quantities. Quantum of damages 141 The applicant seeks damages of ECU 31 976.899. In the reply, he has produced particulars, including an expert's report, according to which his actual loss for the period 16 July 1986 to 29 March 1989 amounts to DM 119 863.21, to which interest should be added from 19 May 1992, the date of the judgment in Mulder II. 142 The defendants allege that the applicant has not adduced proof of the individual damage which he sustained. The expert's report produced is based on statistics for milk producers generally. According to the Commission, the applicant has considerably overstated the income which he would have obtained from hypothetical milk deliveries and understated his income from alternative activities. In fact, he sustained no damage. 143 It must be observed that the parties have not yet had an opportunity to give their views specifically on the amount of any compensation appertaining to the period decided on by the Court, namely 4 May 1987 to 28 March 1989. 144 The Court considers that the possibility of settling the dispute out of court is not ruled out. Pursuant to Regulation No 2187/93, the defendants sent the applicant, a flat-rate offer of compensation through the competent national authorities, which he received on 26 November 1993. In his application, the applicant mentioned that he was in agreement in principle with the amount of compensation fixed by Regulation No 2187/93, except for the aspect of the length of the period for which compensation was payable (see paragraph 48 of this judgment). Although it has been found that the applicant did not accept the offer of compensation on the terms laid down by that regulation (see paragraphs 59 to 68 of this judgment), the Court considers that the possibility of reaching an agreement has not disappeared. 145 In those circumstances, the Court asks the parties to attempt to reach an agreement in the light of this judgment on the amount of compensation for the whole of the damage eligible for compensation within 12 months. In the event of failure to reach agreement, the parties shall submit to the Court within that period their quantified claims. Decision on costs Costs 146 Having regard to paragraph 145 of this judgment, the decision as to costs must be reserved. Operative part On those grounds, THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition) hereby: 1. Declares that the defendants are bound to make good the damage sustained by the applicant as a result of the application of Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector, as supplemented by Commission Regulation (EEC) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68, in so far as those regulations did not make provision for the allocation of a reference quantity to producers who, pursuant to an undertaking given under Council Regulation (EEC) No 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds, did not deliver milk during the reference year opted for by the Member State concerned; 2. Declares that the period in respect of which the applicant must be compensated for the losses sustained as a result of the application of Regulation No 857/84 is that beginning on 4 May 1987 and ending on 28 March 1989; 3. Orders the parties to forward to the Court, within 12 months of this judgment, the amounts to be paid, established by mutual agreement; 4. Orders the parties, in the absence of an agreement, to submit to the Court their quantified claims; 5. Reserves the costs.

The Honourable Mr Justice Silber : I. Introduction A. The issue raised on this application is whether on the particular facts of this case a particular school was entitled as a matter of public law to refuse to allow a Muslim girl to wear at School the niqab veil, which is a veil which covers her entire face and head save for her eyes. This judgment is fact-sensitive and it does not concern or resolve the issue of whether the wearing of the niqab should be permitted in the schools of this country. That is not a question that a court could or should be asked to resolve. Nothing that appears in this judgment seeks to resolve or to throw any light on this problem or the circumstances in which a veil should be permitted to be worn in schools or any other arena in this country. Indeed it follows that nothing in this judgment is intended to be any comment on the traditions or the requirements of the religion of Islam. B. It is necessary to stress first that my role on this application is limited and second that this is not an appeal on a question of fact. Indeed as was pointed out by Richards J (as he then was) in Bradley v The Jockey Club [2004] EWHC 2164 QB in passages which were expressly approved on appeal in that case by Lord Phillips MR. [2005] EWCA Civ 1056 [17] when giving the judgment of the Court of Appeal that: (a) "37 ... The function of the court is not to take the primary decision but to ensure that the primary decision-maker has operated within lawful limits…the essential concern should be with the lawfulness of the decision taken: whether the procedure was fair, whether there was any error of law, whether any exercise of judgment or discretion fell within the limits open to the decision maker, and so forth . . ." and . (b) "43. Of course, the issue in the present case is not one of procedural fairness but concerns the proportionality of the penalty imposed. To my mind, however, that underlines the importance of recognising that the court's role is supervisory rather than that of a primary decision-maker. The test of proportionality requires the striking of a balance between competing considerations. The application of the test in the context of penalty will not necessarily produce just one right answer: there is no single 'correct' decision. Different decision-makers may come up with different answers, all of them reached in an entirely proper application of the test. In the context of the European Convention on Human Rights it is recognised that, in determining whether an interference with fundamental rights is justified and, in particular, whether it is proportionate, the decision-maker has a discretionary area of judgment or margin of discretion. The decision is unlawful only if it falls outside the limits of that discretionary area of judgment. Another way of expressing it is that the decision is unlawful only if it falls outside the range of reasonable responses to the question of where a fair balance lies between the conflicting interests" X, the claimant is a 12 year old Muslim girl who is a pupil at Y school ("the school") which is a selective all-girls grammar school. She entered her second year there in September 2006. By that time, the claimant had reached puberty and in line with her own genuinely held religious faith she wished to wear the niqab when she attended the school and while she was being taught by male teachers or likely to be seen by men. The three older sisters of the claimant A, B and C had previously attended the school and they wore the niqab. The claimant and her parents were told by the head teacher of the school that she was not permitted to wear the niqab at school and since 6 October 2006 she has not attended the school. Since that time, the school has arranged for her to be provided with some tuition funded by the school but this is substantially less tuition than she would have received if she had attended the school The claimant has been offered a place at another selective entry girl's grammar school Q where she would be able to wear the niqab. This school Q has achieved results in public examinations, which are well above the average. The local authority will provide the claimant with transport to and from school Q and this journey from her home will take about 25 minutes. The claimant has not accepted this offer but neither the claimant nor her parents have explained what, if anything is wrong with this school Q other than that the claimant would prefer to stay at Y school. In these proceedings, the claimant seeks to challenge the decision of the head teacher of the school not to allow her to attend the school wearing the niqab. At the outset of the hearing, I gave the claimant permission to proceed with the claim. Orders have been made under section 39 of the Children and Young Persons Act 1933 preventing the disclosure of among other things of the name of the claimant, her sisters or the school Y pending further order. II. The Chronology The claimant X has 3 older sisters who have been referred to as A, B and C and who all attended the school and who all wore the niqab during their time at the school. A attended the school between 1995 and 2002 and while B and C were pupils there respectively between 1997 and 2003 and between 1998 and 2004. Their evidence was that they wore niqabs at the Y school without complaint after they reached puberty but of course they had left before X started at the school in 2005. While the claimant's three sisters were at the Y school, they only wore the niqab when they had a male teacher and at least one of the claimant's sisters also wore a specially adapted veil for science and physical education classes as well as for design and technology classes in order to ensure they could participate safely and fully in those classes. The evidence shows that each of the claimant's three sisters did well while at the school and that they fully participated in the activities of the school. All of them are now embarking on interesting careers or are still studying. The claimant was successful in obtaining a place at the school which selects its pupils after a competitive entry system and she started attending there in September 2005. During her first year at the school, the claimant contends that she wore the niqab occasionally to the School in her first year but the evidence from the defendants is that she only wore it once for a school photograph without any of the school's staff noticing it and then she took it off immediately afterwards. It is common ground in the light of the decision in R v Camden LBC ex parte Cran (1995) 94 LGR 8, 12 that the proper approach for me to adopt where there is disagreement on evidence is that I should accept the evidence of the defendants; that means that I should hold that the claimant only wore the niqab on that one occasion in her first year and then only for a limited period for the school photograph. As I have explained by the time when the claimant started her second year at the school on 7 September 2006, she had entered puberty and she then chose to wear the niqab on a permanent basis. She and her family had clearly and genuinely assumed that the claimant like her sisters would be permitted to wear it. The claimant's evidence is that prior to September 2006 no indication had been given to her or the family that this would not be the case or that there had been any change of policy of the school towards wearing a niqab at school. Shortly after the start of the new term in September 2006, the claimant was called to speak to her head of year and she was then asked why she was wearing the niqab. The claimant explained that she was surprised to be asked why she wore the niqab as the teacher, who was questioning her, had taught her sisters and so she would have been aware of the reasons why Muslim women wear niqabs. According to the claimant, when she explained that she wore it for religious reasons, she was told, as was the case, that the large number of other Muslim girls at the school did not wear the niqab. The claimant said that she then explained that there is a difference of opinion and that some Muslims follow the opinion that it is not a central part of their faith to wear a niqab while she, that is the claimant, felt it was compulsory to wear the niqab. So the claimant had stated that it was for that reason that she choose to wear the niqab. After that meeting the head teacher of the school wrote to the claimant's parents on 14 September 2006. The letter stated that: "…Since [the claimant] returned to school last week, she has been covering her face in certain circumstances. I regret to have to tell you this does not conform to our school uniform policy. Please note we are also discouraging the wearing of a floor-length skirt. Our school uniform policy makes it possible for Muslim girls that adhere to the requirements of their faith. We follow the Guidance Notes for Buckinghamshire Schools… This document was drawn up in full consultation with leaders of all faiths and has their backing. I hope that you will feel able to ask [the claimant] to remove her veil at all times when she is at School and provide her with trousers and/ or a shorter skirt". The Guidance Notes for Buckinghamshire of Schools to which the head teacher had referred does not make any specific reference to the niqab or whether or not pupils should be permitted to wear it. This document does however state that "girls should be allowed to cover their hair with a scarf if they wish to do so" and it continues by noting that while the scarf covering the hair "will meet the basic requirements of Islam there are a minority who may wish to cover their bodies with a long garment and even cover their faces". The Guidance does not indicate how schools should deal with those Muslim girls who wish to cover their faces or from what age they should be allowed to wear it. After they had received the letter of 14 September 2006, the parents of the claimant attended a meeting with the head teacher of the school and the claimant's form tutor on 20 September 2006 to discuss the contents of the letter. The stance of the head teacher was that the claimant should not be permitted to wear the niqab at all. Indeed in another letter to the claimant's parents dated 19 September 2006, the head teacher of the school stated that the claimant had been told that "we could not permit her to continue covering her face while at school". A further meeting took place between the claimant, her parents and the head teacher on 28 September 2006 at which it was apparent that the head teacher was unwilling to change her mind and that she was seeking to convince the parents of the claimant to put pressure on the claimant to change her mind. At the end of the meeting, the parents of the claimant asked for further time and they explained that they wished to consult a religious scholar to seek guidance on the issue of the niqab. On 29 September 2006, the head teacher wrote to the parents of the claimant stating first that she could continue to wear the niqab until 6 October 2006 and second that if the claimant continued to insist on wearing the niqab while at school after that time, "[the parents] will need to remove [her] from the School and make alternative arrangements for her education". On 4 October 2006, the head teacher wrote a letter to the parents of the claimant informing them the claimant should return to school on or after 9 October 2006 with her face uncovered or else she would be excluded from the school. The claimant has not returned to the school since Friday 6 October 2006 but the school have arranged and paid for the claimant to receive tuition in Mathematics, English and Science but she is now receiving substantially less tuition than she would have received if she was still attending the school. The offer to the claimant of the place at the alternative school Q has not been accepted notwithstanding its academic standing, its similar status to the claimant's present school Y as a selective entry grammar school, the provision of free transport to and from this school and the fact that the claimant could wear her niqab there. The claimant's father wrote on 4 October 2006 to the governors of the school explaining that the three older sisters of the claimant had attended the school over a ten- year period and that they had been permitted to wear the niqab. This letter was copied and sent not only to the head teacher but also to the head of year for the claimant. Responses to that letter were sent to the claimant's parents by the chairman of the governors and the head teacher explaining that the governors would not become involved in a decision about the school uniform. In a letter dated 9 October 2006, the head teacher suggested that a further meeting should take place between the father of the claimant and the Islamic Scholar who was being consulted by the claimant and her family on the issue. Unfortunately the Scholar, Mr Suleimen Ghami, who the claimants' family wished to consult, could not attend a meeting during Ramadan and this meant a meeting with him, the claimant's parents and the head teacher could not be arranged until 1 November 2006. On the morning before the meeting, the head teacher received a letter from the claimant's solicitors stating that they were instructed on behalf of the claimant and warning the head teacher that legal action would ensue if a satisfactory arrangement was not reached at the meeting which was due to begin at 1.30pm on that day. The head teacher thought it was regrettable that the claimant's family had taken this step and she was then advised by the Association of School and College Lecturers not to hold the meeting until she had taken legal advice. When the meeting took place on that day, the head teacher explained at the outset that as solicitors had been consulted, she was not prepared to hold a discussion as had been originally planned until she had first obtained legal advice. Mr Ghani the Muslim Scholar did not appear to have known that the claimant's family had consulted a solicitor or to be familiar with the history of the matter but he explained that the wearing of the niqab was not a compulsory requirement of the Koran but that it was a matter on which each female could form her own views. The head teacher explained that she was not willing to discuss the issues as the claimant's family had consulted solicitors. The present proceedings were commenced on 13 December 2006 in which the claimant seeks to judicial review the decision of 14 September 2006 to refuse to allow her to wear the niqab at school. Although nothing turns on it, it does not appear that any decision was made in that letter but one was made soon afterwards. The defendants to the claim are the head teacher of the school and the governors of the school. At the outset of the present proceedings, I gave permission to the claimant to pursue the present claim.  The claimant who brings this claim by her father and litigation friend claims that the school has acted unlawfully because: (a) the refusal to allow the claimant to wear the niqab at the school constitutes a breach of the claimant's rights under article 9 of the European Convention  on Human Rights( "the Convention") ("the article 9  claim") (see paragraphs 23 to 100 below);                             b) she had a legitimate expectation that she would be permitted to wear the niqab at the school and she would probably not have applied to the school had she known that she would not be permitted to do so. Further, it is contended that there was no proportionate or objective justification for changing the uniform policy so as to frustrate the legitimate expectation of the claimant ("the legitimate expectation claim") (see paragraphs 101 to 129 below); and                              (c) the claimant's three older sisters were in a similar position to the claimant   but they, unlike the claimant, had been allowed to wear the niqab at school. It is said that it is axiomatic to rational decision-making that identical cases should be treated in an identical way unless there is some good reason not to do so. The claimant's case is that there was no good reason for the School to change its   policy on the wearing of niqabs in the way it did and so to treat the claimant differently to her sisters ("the similar treatment claim") (see paragraphs 130 to 138 below). III. The Article 9 Claim  (i) Introduction It is common ground that the claimant's article 9 rights have been engaged in this case and that the claimants sincerely held, and holds, the religious belief which she claimed and professed to hold. Article 9 of the Convention provides, insofar as is material, that: "Freedom of thought, conscience and religion 1.  Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance. 2. Freedom to manifest one's religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety…or for the protection of the rights and freedoms of others." The claim is in respect of the claimant's "right to freedom… to manifest [her] religion or belief", which as is common ground is a qualified right. Mr. Daniel Squires counsel for the claimant contends that the defendants have interfered with the claimant's article 9 rights. Mr. Peter Oldham counsel for the defendants disagrees and he submits that even if the defendants have interfered with the claimant's article 9 rights, they can rely on article 9 (2) and also that their actions satisfy the requirements of proportionality. This submission is disputed by Mr. Squires. (ii) Infringement of Article 9. Mr. Oldham relies on the reasoning and decision of the House of Lords in R (Begum) v Governors of Denbigh High School [2005] 2 WLR 3372  and to which I will refer  as "the Begum case"  in order to justify his submission  that the claimant's article 9 rights have not been infringed. In that case, a majority of the Appellate Committee (Lords Bingham of Cornhill, Hoffmann and Scott of Foscote) held on the facts of that case, that the article 9 rights of a Muslim claimant had not been infringed when she was not allowed to wear to her school a jilbab, which is a long coat-like garment. It was also decided unanimously that the school could in any event rely on Article 9(2.) with the result that the claimant's article 9 rights had not been infringed.  Importance is attached by Mr. Oldham to the reasoning of Lord Bingham with whom Lord Scott expressly agreed   when he said (with my lettering inserted in square brackets) that :      "23. The Strasbourg institutions have not been at all ready to find an interference with the right to manifest religious belief in practice or observance [A] where a person has voluntarily accepted an employment or role which does not accommodate that practice or observance and [B] there are other means open to the person to practise or observe his or her religion without undue hardship or inconvenience…    24…the authorities do in my opinion support the proposition with which I prefaced paragraph 23 of this opinion…" Mr. Oldham contends that this analysis assists the defendant because it is not disputed that the claimant has a place at Q another   selective entry grammar school at which she could wear the niqab. The results of that school are well above average and the journey from the claimant's home to that school would take about 25 minutes and the local authority would provide transport. So Mr. Oldham says that this shows that in the present case in Lord Bingham's words in limb B that   "there are other means open to the person to practice or observe…her own religion without undue hardship or inconvenience". Mr. Squires' reply is   that this passage from Lord Bingham's speech does not assist the defendants because there is an additional requirement   in that passage which has to be satisfied before it can be shown that an infringement of article 9 has not occurred. That condition is what I have described as limb (A), namely that "the person has voluntarily accepted [A]... [a] role which does not accommodate the practice or observance" (emphasis added). His contention is that the claimant had not "voluntarily accepted" such a role because what the claimant believed is as stated in   her witness statement that she could wear the niqab to school. It is noteworthy that the claimant in the Begum case went to her school even though it had an established policy of not permitting the wearing of jilbabs and I agree that this constitutes a material difference from the present case  The difficulty confronting Mr. Squires is that the passage from Lord Bingham's speech, which I quoted in paragraph 26 above does not state that there will not be breach of article 9 rights only in a case in which the requirements of each of the limbs (A) and (B) is satisfied. Indeed Lord Bingham in this passage   was not surprisingly only addressing the factual situation in Begum in which there was not only an alternative school available but also a rule   prescribing the wearing of jilbabs. My task is to ascertain whether there is an interference with an article 9 right when there is merely an alternative school Q available but where (unlike the position in the Begum case) there has not been a well-known practice at the claimant's school of prohibiting the wearing of the article in question. This   issue can be refined to being a question of whether a person's article 9 rights are infringed if a person is prohibited from wearing the article of clothing connected with his or her religion at their present school but that person is permitted to wear the article in another available suitable alternative school. If the answer is in the affirmative then there has been no interference with the claimant's article 9 rights and the claimant  could move to the alternative school Q to which I have referred in paragraph 3 above and where she could wear her niqab. Mr. Squires attaches importance to the statement of Baroness Hale of Richmond in Begum that "92 …Most of your lordships take the view that [the pupil claimant]'s right to manifest her religion was not infringed because she has chosen to attend this school knowing full well what the uniform was.." Even if the ratio in Begum is so limited on the interference issue, I have been persuaded that the claimant's article 9 rights have not been infringed by the school's decision not to allow her to wear the niqab   for four reasons. First, Lord Scott explained in Begum (with my emphasis added) that: "87 …The cases demonstrate the principle that a rule of a particular public institution that requires, or prohibits, certain behaviour on the part of those who avail themselves of its services does not constitute an infringement of the right of an individual to manifest his or her religion merely because the rule in question does not conform to the religious beliefs of that individual. And in particular this is so where the individual has a choice whether or not to avail himself or herself of the services of that institution, and where other public institutions offering similar services, and whose rules do not include the objectionable rule in question, are available".  Second, Lord Hoffmann said also in Begum (with my emphasis added) that: "50…... But her right was not in my opinion infringed because there was nothing to stop her from going to a school where her religion did not require a jilbab or where she was allowed to wear one. Article 9 does not require that one should be allowed to manifest one's religion at any time and place of one's own choosing…" Third, the Strasbourg jurisprudence should be followed by the English courts (see, for example R ( Anderson) v Secretary of State [2003] 1 AC 837, 879-880 [18] when Lord Bingham explained that the House of Lords "will not without good reason depart from the principles laid down in a carefully considered judgment of the Grand Chamber")and this Strasbourg case law shows that there is no interference with an article 9 right where there is an alternative place at which the services in question can be provided without the objectionable rule in question. It is clear that the purpose of the Human Rights Act 1998 is not to enlarge the Convention rights or remedies of those whose convention rights have been violated but to enable those rights and remedies to be enforced by the domestic courts in the United Kingdom (see for example, Begum [29]). Turning to the relevant Strasbourg case law, in the case of Jewish Liturgical Association Cha'are Shalom Ve Tsedek v France (2000) 9 BHRC 27, an association of ultra-orthodox Jews complained that their rights under article 9 had been infringed because French law did not allow them to slaughter animals in accordance with their particular opinion of what Jewish ritual required. They could, however, have imported suitably slaughtered meat from Belgium or come to an agreement with the ordinary Jewish ritual slaughterers to produce meat according to their specifications. The opinion of the majority of the Grand Chamber was that there had been no infringement because: "80   In the court's opinion, there would be interference with the freedom to manifest one's religion only if the illegality of performing ritual slaughter made it impossible for ultra-orthodox Jews to eat meat from animals slaughtered in accordance with the religious prescriptions they considered applicable." Lord Hoffmann said in Begum (supra) about this approach that:  "52...'Impossible' may be setting the test rather high but in the present case there is nothing to show that [the claimant] would have even found it difficult to go to another school'. Similar reasoning applies to the present case as the claimant has an alternative school Q which she could and which she can still attend. There are other cases in which the authorities in Strasbourg have held that there has not been an interference with an article 9 right where the claimant could manifest his or her religious beliefs in a different way. In Begum, reference is made to some such cases including Konttinen v Finland (1996) 87-A DR 68,  in which the Commission when rejecting the applicant's claim pointed out, in paragraph 1, page 75, that he had not been pressured to change his religious views as a Seventh-Day Adventist or prevented from manifesting his religion or belief . Their reasoning was that having found that his working hours conflicted with his religious convictions, the applicant  was free to relinquish his post and they did not apparently attach any importance to the fact relied upon by Mr. Squires that the claimant only becomes a Seventh - day Adventist after he had started his work with his employers. Mr. Squires points out that this was a brief admissibility decision and Clayton and Tomlinson have said that such decisions are "unlikely to be of significant jurisprudential value to the English courts" (The Law of Human Rights paragraph 3.47 A). Such decisions are made pursuant to article 27(2) of the Convention and as such they are matters which in the words of section 2(1) of the Human Rights Act 1998, I must "take into account". It is noteworthy that in Begum, the Appellate Committee attached substantial weight to such cases (see paragraphs [23] and 54] and they also did in R (Williamson) v Secretary of State [2005] 2AC 246, 269 [63]). Indeed the weight of such authorities increases when, as is the position here, more than one of such cases which support the same proposition. In another case, an application by a child punished for refusing to attend a National Day parade in contravention of her beliefs as a Jehovah's Witness, to which her parents were also party, was similarly unsuccessful in Valsamis v Greece (1996) 24 EHRR 294. The basis of the decision as stated in paragraph   38 of the judgment  was  that article 9 did not confer a right to exemption from disciplinary rules which applied generally and in a neutral manner and that there had been no interference with the child's right to freedom to manifest her religion or belief. Finally, in Stedman v United Kingdom (1997) 23 EHRR CD 168, which was another admissibility decision of the Commission, it was fatal to the applicant's article 9 claim that she was free to resign rather than work on Sundays to which she had a religious objection. Mr. Squires contends that there is some lack of clarity as to what that case decides but in Begum [23], it was said to be have been decided on the basis which I have just stated. Fourth, I have not been shown or found   any decision of the European Court of Human Rights or of any English court in which it was held that there was an infringement of person's article 9 rights when he or she could without excessive difficulty manifest or practice their religion as they wished in another place or in another way. The approach in Strasbourg courts   to complaints that an applicant has been unable to manifest his or her religion or belief has been to impose a high threshold before interference can be established. Indeed, Lord Bingham observed in Begum that "even if it be accepted that the Strasbourg institutions have erred on the side of strictness in rejecting complaints of interference..." [24].   This approach, which is shown clearly in the decided cases, is also supportive of the conclusion that the article 9 rights of the claimant have not been interfered with. I therefore conclude that the claimant's article 9 rights have not been interfered with as she could have accepted the offer of a place at school Q which achieved good academic results and which is easy for her to get to and most significantly where she could wear her niqab. I add that the claimant has not adduced any evidence or made any submission to indicate that this school is an unacceptable school for her. Although this means that the claimant's article 9 claim fails, I will deal with the arguments on the relevance of article 9(2) and proportionality as I have heard submissions about this. (iii)Was the interference with the claimant's article 9 rights "prescribed by law?" Mr. Squires contends that   the interference with the claimant's article 9 right was not "prescribed by law". He attaches importance to the recent statement of the European Court of Human Rights in Sahin v Turkey [2006] ELR 73 that: "84 The court reiterates its settled case-law that the expression 'prescribed by law' requires first that the impugned measure should have a basis in domestic law. It also refers to the quality of the law in question, requiring that it be accessible to the persons concerned and formulated with sufficient precision to enable them-if need be, with appropriate advice-to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail and to regulate their conduct (Gorzelik and Others v Poland (unreported) 17 February 2004 (Gorzelik), para 64)"  The claimant's case is that there was no ascertainable rule, which was being applied to the claimant when she was required to remove the veil because the school did not, according to Mr. Squires, have a published rule on whether the niqab could be worn with the result that the defendant's decision to prohibit the wearing of the niqab was wholly unforeseeable and could not have been predicted by any application of the known school's rules.   As I have explained, the claimant's case was that shortly after the start of her second year in September 2006, she was told by her head of year that she should not be wearing a veil. The claimant's parents then received the letter from the school dated 14 September 2006 which I have quoted in paragraph 14 above and which stated wearing the veil "does not conform to our school uniform policy". This was followed by another letter to the claimant's parents dated 19 September 2006 in which the head teacher of the school stated that the claimant had been told that "we could not permit her to continue covering her face while at school". In my view, the defendants had stated clearly, comprehensively and comprehensibly that the niqab could not be worn at school and that a breach of that rule would have serious consequences. So returning to the words used in Sahin which I quoted in paragraph 40 above, the defendants had made a rule prohibiting the wearing of the niqab which was: "accessible to the persons concerned [namely the claimant] and formulated with sufficient precision to enable them [namely the claimant and those who wore niqab] to foresee to a degree reasonable in the circumstances the consequence which a given action [namely the wearing of the niqab] would have" . Mr. Squires correctly in my view   accepted that if the head teacher had announced in the school assembly that the wearing of the niqab would thereafter be prohibited, this would have satisfied the requirement that the interference was "prescribed by law". I cannot see why the position should be different if, as occurred in this case, the existence of this rule prohibiting the wearing of the niqab was communicated clearly to the only person then directly affected by it, namely the claimant. I therefore conclude that the rule prohibiting the use of the niqab was "prescribed by law". (iv) The Approach to Article 9(2) and Proportionality As there has been some disagreement about the principles to be applied on these issues, it is appropriate now to explain how these matters should be approached. I bear in mind the high importance attached to article 9 rights and that the principles of proportionality applicable to convention rights which was explained by Lord Steyn in R(Daly) v Secretary of State for the Home Department [2001] 2 AC 532 when he said that: "27. The contours of the principle of proportionality are familiar. In de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 the Privy Council adopted a three stage test. Lord Clyde observed, at p.80, that in determining whether a limitation (by an act, rule or decision) is arbitrary or excessive the court should ask itself: "whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective." Clearly, these criteria are more precise and more sophisticated than the traditional grounds of review." It is common ground that in the present case that in order to apply the proportionality test in this case, it is necessary to replace the words "the legislative objective" with "the objective or objectives of the school" As Dyson LJ explained in Samaroo v Secretary of State [2001] EWCA Civ 1139 [17], it is clear that what Lord Steyn said about proportionality was intended to be of general application to other human rights issues . In explaining why the intensity of review is somewhat greater where proportionality is in issue than under the traditional grounds of review, Lord Steyn mentioned three significant differences: "28 .First, the doctrine of proportionality may require the reviewing court to assess the balance which the decision maker has struck, not merely whether it is within the range of rational or reasonable decisions. Secondly, the proportionality test may go further than the traditional grounds of review inasmuch as it may require attention to be directed to the relative weight accorded to interests and considerations. Thirdly, even the heightened scrutiny test developed in R v Ministry of Defence, Ex p Smith [1996] QB 517, 554 is not necessarily appropriate to the protection of human rights." In Begum, guidance was given on the approach to be adopted in an article 9(2) case to the margin of discretion or of appreciation to be given to the decision maker and as I will explain the able submissions of Mr. Squires fail to take advantage of this important point. Lord Hoffmann quoted the Strasbourg Court decision in Sahin v Turkey (2004) 41 EHRR 109, 131-132 where it explained that: "a margin of appreciation is particularly appropriate when it comes to the regulation by the Contracting States of the wearing of religious symbols in teaching institutions" He later stated that: "64…In applying the principles of Sahin v Turkey the justification must be sought at the local level and it is there that an area of judgment, comparable to the margin of appreciation, must be allowed to the school. That is the way the judge approached the matter and I think that he was right."  Lord Scott also spoke of the margin of appreciation when he said that: "84… As to the school's refusal to relax the uniform rules so as to allow Shabina to attend school wearing the jilbab, that too seems to me to have been well within the margin of discretion that must be allowed to the school's managers" Lord Bingham had stated about the pupil's request to wear the jilbab and the school's refusal to agree to it that: "34…it would be irresponsible of any court ,lacking the experience, background and detailed knowledge of the head teacher, staff and governors to overrule their decision on a matter as sensitive as this. The power of decision has been given to them for the compelling reason that they are best placed to exercise it…" Baroness Hale's conclusion in Begum was that the although, the claimant's article 9(1) rights had been infringed, the school acted thoughtfully and proportionately in its uniform policy and her approach implied clearly that the school had a discretion as to how to deal with the conflicting claims of the claimant's article 9 rights and the arguments against allowing the pupil to manifest his or her religion in the particular circumstances of the case. (see for example paragraph 77(d) below) I will apply the principles to which I have referred and also that: (a) proportionality must be judged objectively by the court (Williamson v Secretary of State for Education [2005] 2 AC 246 [51]); and (b) the approach adopted by the Grand Chamber in Strasbourg in Sahin (supra) in which the court  recognised first  the high importance of the rights protected by article 9, second  the need in some situations to restrict freedom to manifest religious belief, third  the value of religious harmony and tolerance between opposing or competing groups and of pluralism and broadmindedness, fourth the need for compromise and balance, fifth the role of the state in deciding what is necessary to protect the rights and freedoms of others; the variation of practice and tradition among member states and finally the permissibility in some contexts of restricting the wearing of religious dress. Mr. Squires submitted that the correct approach to this case was as set out in Samaroo ...supra) in which it was stated by Dyson LJ giving the judgment of the Court of Appeal that: (a) "19…I accept the submission of Mr Howell that, in deciding what proportionality requires in any particular case, the issue will usually have to be considered in two distinct stages. At the first stage, the question is: can the objective of the measure be achieved by means which are less interfering of an individual's rights?..." (b) "20. At the second stage, it is assumed that the means employed to achieve the legitimate aim are necessary in the sense that they are the least intrusive of Convention rights that can be devised in order to achieve the aim. The question at this stage of the consideration is: does the measure have an excessive or disproportionate effect on the interests of affected persons?..." (c) " 39.In my judgment, it is not incumbent on the Secretary of State to prove that withholding of a deportation order in any particular case would seriously undermine his policy of deterring crime and order. Proof is not required. What is required is that the Secretary of State justify a derogation from a Convention right, and that the justification be "convincingly established": Barthold v Germany (1985) 7 EHRR 383, 403..." and (d) "39…In asking whether the justification has been convincingly established, the domestic court (as indeed the court in Strasbourg) should consider the matter in a realistic manner, and always keep in mind that the decision-maker is entitled to a significant margin of discretion. The Secretary of State must show that he has struck a fair balance between the individual's right to respect for family life and the prevention of crime and disorder. How much weight he gives to each factor will be the subject of careful scrutiny by the court. The court will interfere with the weight accorded by the decision-maker if, despite an allowance for the appropriate margin of discretion, it concludes that the weight accorded was unfair and unreasonable. In this respect, the level of scrutiny is undoubtedly more intense than it is when a decision is subject to review on traditional Wednesbury grounds, where the court usually refuses to examine the weight accorded by the decision-maker to the various relevant factors" Mr. Oldham contends that this reasoning does not set out the correct test especially in the light of the reasoning and the decision in Begum. With great respect, I do not think that I should follow the approach in Samaroo for six reasons. First, the Appellate Committee did not apply these tests in Begum . Second, the unsuccessful pupil respondent in the House of Lords in Begum [28]) sought to rely on the reasoning in Samaroo in paragraphs 19 to 24 of the judgment but this submission was not accepted in the unanimous decision of the Appellate Committee on proportionality which held that the rule prohibiting the wearing of jilbabs was proportionate. Third, Lord Bingham explained that: "29…But the focus at Strasbourg is not and has never been on whether a challenged decision or action is the product of a defective decision-making process, but on whether, in the case under consideration, the applicant's Convention rights have been violated. In considering the exercise of discretion by a national authority the court may consider whether the applicant had a fair opportunity to put his case, and to challenge an adverse decision, the aspect addressed by the court in the passage from its judgment in Chapman quoted above. But the House has been referred to no case in which the Strasbourg Court has found a violation of Convention right on the strength of failure by a national authority to follow the sort of reasoning process laid down by the Court of Appeal. This pragmatic approach is fully reflected in the 1998 Act. The unlawfulness proscribed by section 6(1) is acting in a way which is incompatible with a Convention right, not relying on a defective process of reasoning, and action may be brought under section 7(1) only by a person who is a victim of an unlawful act." Fourth, Lord Hoffmann also said in Begum that a court should not hold that "68…a justifiable and proportionate restriction should be struck down because the decision-maker did not approach the question in the structured way in which a judge might have done" . Fifth, it is difficult to understand how the reasoning in Samaroo is compatible with the approach of Lord Bingham and Lord Hoffmann. Finally, Lord Scott agreed with both Lord Bingham and with Lord Hoffmann I therefore reject the submission of Mr. Squires that I should adopt the Samaroo approach in the light of the decision and the approach of the House of Lords in Begum. In paragraphs 95 to 99 below, I will show that in this particular case, the application of the Samaroo test would not lead to a different result than that which would follow from the application of the Begum approach (v) "A lack of thought-out policy balancing the interests at stake" Mr. Squires contends that the School cannot invoke article 9(2) because of its "lack of thought out policy balancing the interests at stake". Mr. Oldham disagrees and contends that this is not a relevant consideration but even if it was, the School has in any event complied with this approach. It is the case of the claimant   that the way in which a decision-maker takes a decision is relevant so as to show that a proper balance was struck for the purpose of article  9 (2). In support Mr. Squires points to the way in which two different courts of final appeal have dealt with this matter recently and which he submits shows that in the words of his written skeleton argument, this does not mean that "the way in which a decision is taken and the factors that the decision-maker considered are irrelevant". First, he points out that in Begum (supra), Lord Bingham explained that:      "34. On the agreed facts, the school was in my opinion fully justified in acting as it did. It had taken immense pains to devise a uniform policy which respected Muslim beliefs but did so in an inclusive, unthreatening and uncompetitive way. The rules laid down were as far from being mindless as uniform rules could ever be. The school had enjoyed a period of harmony and success to which the uniform policy was thought to contribute. On further enquiry it still appeared that the rules were acceptable to mainstream Muslim opinion. It was feared that acceding to the respondent's request would or might have significant adverse repercussions. It would in my opinion be irresponsible of any court, lacking the experience, background and detailed knowledge of the head teacher, staff and governors, to overrule their judgment on a matter as sensitive as this. The power of decision has been given to them for the compelling reason that they are best placed to exercise it, and I see no reason to disturb their decision…" Second, in Sahin v Turkey (2004) 41 EHRR 109, when considering the refusal to allow headscarves to be worn at a university, the Grand Chamber in Strasbourg concluded on the issue of justification and proportionality that: "[159] As regards the principle of proportionality, the court found … that there was a reasonable relationship of proportionality between the means used and the aim pursued. In so finding, it relied in particular on the following factors, which are clearly relevant here. First, the measures in question manifestly did not hinder the students in performing the duties imposed by the habitual forms of religious observance. Secondly, the decision-making process for applying the internal regulations satisfied, so far as was possible, the requirement, the requirement to weigh up the various interests at stake. The university authorities judiciously   sought a means of whereby they could avoid having to turn away students wearing the headscarf  and at the same time honour their obligation to protect the rights of others and the interests of the education system. Lastly, the process also appears to have been accompanied by safeguards-the rule requiring conformity with statute and judicial review-that were apt to protect the students' interests…" Mr. Squires contends that  the school had reached its conclusion based on assumptions without having adequate evidence to justify them or without knowledge and consideration of some significant factors, then it could not in those circumstances  justify reliance on the provisions in article 9 (2) . His case is that the way in which a decision is reached is relevant. There are two reasons why I am unable to accept this submission. First, for the reasons which I have set out in paragraphs 54 to 57 above, I do not consider that a criticism of the process by which a decision was arrived at can lead to a conclusion that the decision-maker is thereby precluded from relying  on article 9 (2) and second, even if I am wrong, there is nothing wrong with the procedure adopted by the school for the reasons which I will now seek to explain. I do not agree with Mr. Squires that the school had not reached its decision to ban the wearing of niqabs by pupils based on assumptions but without having adequate evidence to justify them or without knowledge and consideration of some significant factors. On the contrary, the decision of the head teacher was only arrived at as result of many thoughtful and sensible inquiries. The reasons for requiring the claimant not to wear the niqab were set out clearly in paragraphs 11 and 13 of the Acknowledgment of Service which was duly verified on behalf of the defendants and so must be regarded as the basis for justifying their decision to forbid the wearing of the niqab at the school. These reasons can be summarised as being first educational factors resulting from a teacher being unable to see the face of the girl with a niqab; second the importance of a uniform policy as promoting "uniformity and an ethos of equality and cohesion"; third security; and finally avoiding applying pressure on girls to wear a niqab. These points were all pursued by Mr. Oldham in his written skeleton arguments and at the hearing. The evidence from the defendants was that: (a). the aim of school uniform was to (i) encourage pride in a school; (ii) enable students to feel comfortable in their environment; (iii) ensure that girls of different faith felt welcome; (iv) encourage a sense of equality and cohesion within the School; and (v) protect children from social pressures to dress in a particular way. This part of the school's ethos on this issue was supported by the chairman of its governors of the school, who explained that the purpose of having a uniform policy was far-reaching and that it, for example, encouraged among the pupils a sense of identity, a sense of equality and a sense of pride. This point was made clearly in the letter of 21 November 2006 from the local authority acting on behalf of the school to the claimant's solicitors answering the letter before action of 31 October 2006 All these are clearly thought-out and sensible  reasons. The niqab was an addition to the uniform and with it, the claimant looked different from the other girls at the school; (b)she took account of   the results of her consultation with the Minority Ethnic and Traveller Achievement Service ("METAS"), which is a part of the County Council responsible for the School. METAS consists of consultants who advise schools on raising the achievements of various groups including ethnic minorities. The head teacher said that she was told by Linda Lewins that METAS had taken further advice from Muslim sources before confirming that there was no requirement to permit the wearing of the niqab; (c) she had read and taken note of the contents of a document entitled "Working Together to meet the needs of Muslim Pupils" ("the Working Together document") which was published in 2005 for the schools in the county in which the defendant school was situated following a collaborative effort on the part of the local authority, schools and the Muslim community which highlights the good practice that schools should adopt. The Working Together document recommends that Muslim girl pupils in schools "..should be allowed to cover their hair with a scarf if they wish to do so…The scarf need only cover the hair. Although this will meet the basic requirements of Islam there are a minority of very devout Muslim women who may wish to cover   their bodies with a long garment and even cover their faces" (emphasis added).The head teacher explained perhaps not surprisingly that she did not consider that the claimant as a girl of 12 was to be regarded as a "woman"; (d) she took account of the contents of the   National Union of Teachers Guidelines entitled "The Muslim Faith and School Uniform" and which stated that,"… schools may wish to consider whether a pupil's request to be allowed to wear the naqab, a face cover would inhibit facial communication as part of teaching and learning". The head teacher has explained in her witness statement that these matters formed part of her considerations in deciding not to permit the naqab to be worn at the school; (e) had received the advice given to her by three Muslims that the school's uniform policy met the religious requirements of Islam and that it should not be expected that a girl should cover her face while at school. Those three Muslims were first Rashida Kari (who is a qualified teacher and who was on the working party for   the National Union of Teachers guidance referred to in the last sub-paragraph), second   Zahir Mohammed (who is a county councillor who is the lead spokesperson for secondary schools in the county in which the school is situated) and third  Rafiq Raja, who is the Chair of the Muslim Parents Association in the town in which the School is based. I should add that a witness statement was made on the claimant's behalf by a Muslim scholar, Sheikh Suliman but perhaps surprisingly only three days before the hearing started on 5 February 2007 in which he said that the relevant verses of the Koran are very clear in showing that the  female's face should be covered by a niqab in the presence of men and "it is a requirement for those Muslims who take that view". This witness statement was made more than four months after the head teacher made the decision concerning the claimant's wearing of the niqab and in any event it is contrary to the information supplied to the head teacher and which is set out earlier in this paragraph;    (f) she considered the fact that the wearing of the niqab "would tend to undermine the development of empathy between staff and students and between the students themselves and as such it may affect positive relationships"; (g) she had reached her conclusion no doubt gained from more than 30 years of her  teaching experience that effective teaching depends on students being able to interact with each other and in particular with the teacher as in her words "being able to see facial expressions is a key component of effective classroom interaction. Successful teaching depends on the teacher being able 'to read' a student to see if the student understands, is paying attention, is distressed, or is enthusiastic. This also applies to interaction between students in group work. I think that wearing a niqab would impede this interaction between students in group work. I think that wearing a niqab would impede this interaction between staff and students". This factor would  according to the head teacher have been especially  significant and pertinent  for the claimant who, was according to all her reports, so very quiet and  shy that an Individual Education Plan had been drawn up for her in March 2006; (h) her belief was that  in a number of lessons, facial expression is a key part of the learning process and of skill development in, for example, drama, English and any subject in which role play is adopted; (i) her view was that in foreign languages lessons and to some extent in English lessons, the teacher needs to see how the pupil forms and shapes her words in order to help her to understand them and to pronounce them correctly. I add that the claimant speaks a language other than English in her home and that her application form to the school shows that English is not her first language; (j) schools have become very security-conscious and that they now use different  forms of security in the form of keypads on entrance doors and on  internal locking systems. The need for security requires members of staff to be able to identify a person on the school premises without difficulty. The presence of niqab on pupils   presents difficulties in identifying students and in the words again of the head teacher "it would not be beyond the realms of possibility for an unwelcome person wishing to move around incognito to wear a niqab". The claimant's father has explained that   in an emergency, the claimant would remove her veil if she was asked by a male teacher but the point made by the head teacher remains valid when considered together with the importance of uniform in the school ethos for the reasons explained in sub- paragraph (a) above. These factors show that by giving the claimant some other distinguishing feature ( such as a specifically coloured patch on her clothes) would not be an adequate solution  to answer the security concerns of the head teacher ; (k) a contributory factor was that the wearing of the niqab presents some health and safety issues although the head teacher accepts correctly in my view that these issues are not insurmountable and many, if not all of them may be overcome by using different coverings for the face. The health and safety factors relate to risks caused by the restrictions in the peripheral vision of the niqab wearer when dealing with science experiments where the wearer might be unaware of potential hazards, in physical education classes where the niqab wearer might not be aware of other people or the risk in these lessons and in design and technology lessons of the niqab becoming caught on equipment.; and (l) her view that if the niqab became an accepted part of school uniform, there might well be pressure brought to bear on other Muslim girls also to wear a niqab. Such pressure could come from either the families of the Muslim girls or from their friends at school. The head teacher believes that such a development would be undesirable for security and health reasons referred to in sub-paragraphs (j) and (k) above.   In my view, this list shows that the head teacher of the school considered with great care the question of whether the claimant should be allowed to wear the niqab. It took advantage of the published material in the Working Together document, the National Union of Teachers Guidelines document as well as specifically consulting with METAS which took advice from Muslim sources. None of these sources, which were   available and which were produced to the head teacher or to the school, showed that there was a requirement for the claimant to wear the niqab. The head teacher also used her long teaching experience to appreciate the importance for a teacher to see the eyes of the students for the reasons which I set out in the last paragraph and this is borne out by the statements from teachers at the school, who have explained the difficulties which they experienced in teaching A, B and C, who were the sisters of the claimant who wore the niqab at school when they were at risk of coming into contact with males. I appreciate that each of these sisters do not accept that the wearing of the niqab impeded their learning but in the light of the reasoning in ex parte Cran (supra), it is common ground that I should accept as correct the evidence of the teachers, which I do especially as they all have substantial experience of teaching. All this material shows that even if (which I do not consider to be the case) the school had an obligation to have a well-thought out policy balancing the interests at stake before being able to invoke the provisions of article 9(2), the school complied with this obligation. Mr. Squires contends that the school could and should have accommodated the claimant's wish to wear the niqab. He points out that school Q which has offered the claimant a place and to which I have referred in paragraph 3 above permits its pupils to wear the niqab and there is no good reason why the defendants should not have done likewise. This submission fails to appreciate the fact that different schools are entitled to adopt their own rational policies which is what I believe that the defendant school has done in this case.  Mr. Squires' approach suggests that there is only one correct policy which the school could have adopted but as the passage quoted in paragraph 1B above shows, this is not the correct approach. In any event, the correct position is in Lord Bingham's words in Begum, which I have already quoted in paragraph 51 above, that: "34…it would be irresponsible of any court ,lacking the experience, background and detailed knowledge of the head teacher, staff and governors to overrule their decision on a matter as sensitive as this. The power of decision has been given to them for the compelling reason that they are best placed to exercise it…" Thus   I cannot accept Mr. Squires' submissions that the School had not taken account of the relevant interests at stake and balanced them. Indeed on the facts of this case, I have concluded as   Lord Bingham did in Begum that: "33…the school did not reject the [pupil's] request out of hand; it took advice and was told that  its existing policy conformed with the requirements of mainstream Muslim opinion" That is precisely what was done in this case and the results of this their advice are set out in paragraph 64 (b) to (e) above. If, which is not the case, I had been in any doubt about this, I would have taken note of the margin of appreciation due to the School to which I have referred in paragraphs 48 to 51 above. This would have led to a further reason for rejecting the complaint of Mr. Squires that there was a "lack of a thought-out policy balancing the interests at stake" but as I have explained in paragraphs 55 and 56 above, the process by which a decision is reached is not of any importance in the Strasbourg jurisprudence as it is necessary to focus on the actual decision, which in this case was clearly thought-out. (vi) "…necessary in a democratic society for the protection of the rights of others" and proportionality  Mr. Oldham contends first that any restriction on the article 9 rights of the claimant was in the words of article 9 (2) "necessary in a democratic society for the protection of the rights of others" and second that any restriction was proportionate. Mr. Squires disagrees and so it becomes necessary to consider each of these matters relied on by Mr. Oldham in turn. It is common ground that the words "necessary in a democratic society" mean a pressing need and no separate point is taken that this requirement was not satisfied on the facts of this case. I will now turn to consider the heads of justification relied on by the school. (vii) Justification for interference-the importance of school uniform As I have explained, the head teacher attached great importance to the significant purposes of uniform which are to (i) encourage pride in a school; (ii) enable students to feel comfortable in their environment; (iii) ensure that girls of different faith felt welcome; (iv) encourage a sense of equality and cohesion within the school; and (v) protect children from social pressures to dress in a particular way. These points were supported by the chair of the governors who explained that  the purpose of having a uniform policy was far-reaching and that it, for example, encouraged among the pupils a sense of identity, a sense of equality and a sense of pride. All these factors are clearly thought-out and sensible reasons. None of these points were cogently disputed by the claimant and indeed I consider them to be powerful and valid points which would justify the school's policy as being necessary in a democratic society for the protection of others provided that the actions of the school were consistent with these professed views. It is also clear from the evidence that the school over the last few years has attached a great deal of importance to selecting school uniform which was among other things acceptable to its pupils and their parents. First, there was full scale review in 2001/2002 of the existing uniform in which the parents were invited to express their views on the uniform. I add that as they had a daughter at the school, the claimant's parents would then also have been consulted. This review was instigated because of concern about, among other things, the cost, warmth and comforts   of the existing uniform as well the requirements of the different ethnic groups within the school. A committee was formed to deal with the review which included pupils, teachers and parents. The committee then put forward a number of options which were then voted on by the pupils who would have included the claimant's sister as the school were anxious to ensure everyone could put forward their views. The hijab head scarf was discussed and it was felt that those who wanted to wear it could continue to do so provided its colours were those of the school uniform. The niqab was not discussed or indeed apparently raised by anybody. As a result of the survey and the detailed consultation exercise, the new uniform was introduced although pupils were able to wear the old uniform until it was replaced. There was then a further review conducted by the present head teacher which entailed sending a questionnaire to about 800 families and it focussed on the strictness of the interpretation of the existing policy. As a result of the survey, the numbers of the different acceptable styles of trousers and skirts was reduced but the uniform policy was then to be and was strictly enforced. The head teacher explained that parents were and are regularly reminded of uniform matters in a general letter, which has been and is  sent out to parents every half term. This evidence leads me to the conclusion that it is correct that the school attached great importance to its pupils wearing the correct uniform and  which had been selected in the light of representations from the pupils and their parents. More specifically it shows that the school attached importance to the four matters which I set out in paragraph 64(a) (i) to (v) above. I should add that in Begum Lord Bingham explained that "26…it was not suggested that the rules [on uniform including those relating to the wearing of jilbab] were not made for the legitimate purpose of protecting the rights and freedoms of others". When I   asked what the evidence was in Begum which led to that conclusion, Mr. Squires pointed out that the evidence of the head teacher in that case was that she had believed that school uniform played an integral part in securing high and improving standards, serving the needs of a diverse community, promoting a positive sense of communal identity and avoiding manifest disparities of wealth and style. These are   very similar points to  those put forward by the head teacher and the school in the present case as justification for the rule prohibiting the wearing of the niqab in the present case. The niqab was an addition to the uniform and with it, the claimant looked different from the other girls at the school This fact reinforces my view that these reasons put forward by the defendants constitute valid reasons for upholding this article 9(2) claim subject to the issue of proportionality to which I now turn Applying the three limbs of the proportionality test set out in paragraph 46 above, the object of the school in relation to school uniform was sufficiently important to justify limiting the article 8 right. In addition, the measures adopted by the school in prohibiting the wearing of the niqab were rationally connected to the school's objectives and did no more than necessary to accomplish that objective. 77. I am fortified in coming to this conclusion by the fact that many of the reasons given by the Appellate Committee for their decision in the Begum case  that the rule prohibiting the wearing of niqabs was proportionate on the grounds of the need for a uniform also apply with similar force in the present case because: (a) Lord Bingham explained that:"33…when some other schools permitted it and for adhering to their own view of what Islamic dress required. None of these criticisms can in my opinion be sustained. The headscarf was permitted in 1993, following detailed consideration of the uniform policy, in response to requests by several girls. There was no evidence that this was opposed. But there was no pressure at any time, save by the respondent, to wear the jilbab, and that has been opposed. Different schools have different uniform policies, no doubt influenced by the composition of their pupil bodies and a range of other matters. Each school has to decide what uniform, if any, will best serve its wider educational purposes. The school did not reject the respondent's request out of hand: it took advice, and was told that its existing policy conformed to the requirements of mainstream Muslim opinion . 34. on the agreed facts, the school was in my opinion fully justified in acting as it did. It had taken immense pains to devise a uniform policy which respected Muslim beliefs but did so in an inclusive, unthreatening and uncompetitive way. The rules laid down were as far from being mindless as uniform rules could ever be. The school had enjoyed a period of harmony and success to which the uniform policy was thought to contribute. On further enquiry it still appeared that the rules were acceptable to mainstream Muslim opinion. It was feared that acceding to the respondent's request would or might have significant adverse repercussions…" In the present case, the school has gone to great lengths to work out its policy on uniform in general and on niqabs in particular by making the inquiries to which I have referred in paragraph 64 (b) to( e) above; (b) Lord Hoffmann approved of the approach of the school in the Begum case, which was that " 66…[the school] had decided that a uniform policy was in the general interests of the school and then tried to devise a uniform which satisfied as many people as possible and took into account their different religions…" As I have explained in paragraphs 71 and 72 above, this is what the school did in this case as they consulted on the uniform policy. The school in the present case did rather better than the school in the Begum case because as Lord Hoffmann continued in the Begum case "66.. When Shabina refused to wear the uniform, they did not "explore the reasons why [she] sincerely believed that she must wear [the jilbab]". They simply said that the policy was in place and that if she wanted to come to school she must wear the uniform". In the present case as I have explained, when the claimant insisted on wearing the niqab, the school duly made inquiries to which I have referred in paragraph 64 (b) to (e) above about the need and desirability for girls like the claimant to wear niqab from Islamic sources; (c) Lord Scott agreed with Lords Bingham and Hoffmann; and (d) Baroness Hale said that "98…Social cohesion is promoted by the uniform elements of shirt, tie and jumper, and the requirement that all outer garments be in the school colour. But cultural and religious diversity is respected by allowing girls to wear either a skirt, trousers, or the shalwar kameez, and by allowing those who wished to do so to wear the hijab. This was indeed a thoughtful and proportionate response to reconciling the complexities of the situation."  By the same token, in the present case, cultural and religious diversity was respected by allowing the pupils at the school to wear the hijab provided that it was in the school colours and by carrying out the inquiries to which I have referred in paragraph 64 (b) to (e) above. So I conclude that even with the smallest margin of discretion, the rule  prohibiting the  wearing of  the niqab was first  made for the legitimate purpose of protecting the rights and freedoms of others because of the desirability of having a uniform and second because it meets  the test of proportionality which I have outlined. The objective of having a uniform was sufficiently important to justify limiting the article 9 right and the rule prohibiting the wearing of niqabs was rationally connected to it. It also went no further than necessary to accomplish the school's objective. In consequence the article 9 (2) claim succeeds   but as I heard arguments on the other heads of justification, I will deal with them briefly. (viii) Justification for interference- Security and Proportionality   As I have explained in paragraph 64(j) above,   the evidence shows that schools have in recent years become very security conscious and that many  now have forms of security in the form of keypads on entrance doors and internal locking systems. The need for security requires members of staff to be able to identify a person on the school premises without difficulty. The presence of niqab on pupils   presents difficulties in identifying students and in the words of the school's head teacher "it would not be beyond the realms of possibility for an unwelcome person wishing to move around incognito to wear a niqab".  She also points out that being able to identify girls speedily is important in the case of an emergency such as a fire assembly of if it is known that security has been breached. The claimant's father has explained that   in an emergency, the claimant would remove her veil if she was asked to do so by a male teacher but it is questionable why a teacher should be forced to take these steps especially when great speed might well be required and this procedure might delay matters especially if there are more pupils than the claimant wearing the niqab. I suspect that the claimant would have to be persuaded that there was a genuine emergency before she would agree to remove a veil in the presence of a male. I appreciate the Mr. Squires says that this would not be a problem as  pupils wearing a niqab might have some other distinguishing feature, such as a piece of cloth sown on to their garment to identify the claimant but that would not enable the school to have its desired policy of having all its pupils in uniform for the reasons which I have already explained. In any event, the school should be allowed to decide how to approach this issue as it had a margin of discretion. In my view, the school is able to justify its policy to prohibit the wearing of niqab by the claimant on the grounds of security and this was in the words of article 9(2) justified on the grounds of "in the interests of public safety…or for the protection of the rights and freedom of others"   and this is so particularly in the light of the margin of appreciation due to the decision of the school for the reasons set out in paragraphs 48 to 51 above. Mr. Squires says that the risk of somebody disguising in a niqab is minimal but I am not prepared to overrule the fears of the head teacher and the mere fact that other schools such as Q permit the wearing of niqabs merely means that another head teacher in another school and in another town has a different approach. There might be different factors at play in school Q. Turning to the question of proportionality, this security factor was sufficiently important to justify limiting the article 9 right of the claimant in the light of genuine and proper concern about security at the school. In addition the prohibition on wearing niqab was rationally connected to the objective of ensuring that the school remained secure and that its pupils and employees remained safe. Finally the means used to impair any article 9 right of the claimant by prohibiting the wearing of the niqab were no more than is necessary to accomplish this objective. (ix) Justification for interference-. Educational standards and proportionality The case for the school is that by wearing the niqab, the claimant would hamper her learning and the ability of the school to teach her for the reasons which I have explained in paragraph 64 (f) to (i) above. The head teacher   explains that effective learning depends on pupils being able to interact with each other and in particular with the teacher. She says that effective teaching depends on the teacher being able to see if the pupils   understand what she is being taught and   if she is paying attention as well as discovering if she is distressed or enthusiastic. The head teacher also explained that in foreign language tuition and to some extent in English lessons, the teacher needs to see how the pupil forms and shapes words in order to help the pupil to pronounce them correctly. This evidence was supported by members of the teaching staff at the school. It was pointed out that History is now taught with the extensive use of role play and so the wearing of the niqab by the claimant would inhibit the ability of the claimant to participate in these activities and to communicate with her peers Mr. Oldham  contends that not only are these valid concerns for all pupils who wear the  niqab but they have added weight in the case of the claimant, who is a very quiet and shy girl who could and should make more contributions to class discussions even before she started to wear the niqab. As I have explained, the claimant was subject to a special programme in and from March 2006 because of these problems which arose before she started to wear the niqab. Mr. Squires contends that these concerns are not justified and in support he relies on the evidence of the claimant's three elder sisters, who had, as I have explained, been pupils at the school. They have all made witness statements in which they explain first that they wore the niqab while pupils at the school unless in a closed classroom with a female teacher and second that the wearing of the niqab at school did not cause any academic or other problems for them or inhibit their participation in school activities. Each of the claimant's sisters explains that they did well while at the school. The evidence from their former teachers at the school is unfortunately different as they explain that there were difficulties caused in the classroom by the claimant's sisters wearing the niqab. An English teacher said that it was difficult to hear what one sister of the claimant was saying and therefore her comments had to be repeated to the class. He also said that it was difficult to detect from her facial expression if she had understood her task. Similar views were expressed by a Chemistry teacher at the school, who taught all three of the elder sisters of the claimant. Similarly a Music teacher of the claimant said that she taught an elder sister of the claimant and that she could not tell if she was singing or playing the recorder because of the presence of the niqab which she was wearing It is common ground that in so far as there is disagreement between the evidence adduced on behalf of the claimant and that supplied by the defendants, as there has been no cross-examination of the makers of the witness statements, I should assume the facts to be those which favour the defendants ... see  ex parte Cran  (supra). Thus I conclude that I should accept the defendants' evidence and conclude that the wearing of the niqab inhibits effective teaching to and learning by those who wear it for the reasons which I have explained in paragraphs 64 (f) to (i) and 87 above. Mr. Squires does raise an important point which is that the wording of article 9 (2) does not cover problems found by the claimant as it refers to limitations "necessary in a democratic society…for the protection of the rights and freedoms of others". In my view, he is correct as the use of the word "others" in article 9(2) indicates that the claimant's position has to be ignored. There is no evidence that the learning by the claimant's classmates has been impaired or adversely affected by a girl in their class wearing a niqab. In consequence, the school cannot rely on this ground relating to educational factors under article 9(2). (x) Justification for interference- pressure on other Muslim girls The head teacher explains that if the niqab became an accepted part of the school uniform, this would mean that other Muslim girls might   have pressure applied to them by their families or by other pupils to wear the niqab. This is something which causes the head teacher concern because of the security aspects and to which I have already referred in paragraph 64(l) above. Mr. Squires responds by contending that while there was evidence of this factor in the Begum case, nobody could predict what might happen in the present case if the niqab could be worn by pupils. He also points out that when the claimant's sisters wore the niqab between 1995 and 2004, there was no evidence that any group was pressurised to follow their example. In my view there is a difference between, on the one hand, the situation in a school when the niqab is worn by only one or two sisters and when there is no mention of whether niqabs can be worn and, on the other hand, a situation when it is expressly stated that niqabs can be worn which is what will occur if the claimant is successful. In the latter case, many Muslim girls might become subject to pressure to wear the niqab. Furthermore the head teacher will know how her pupils might react and it would be wrong for me to overrule her.. Furthermore, it was explained in the Begum case that the girls at the school subsequently expressed their concern that if the manifestation of religion in that case was to be allowed, they would face pressure to adopt it even though they did not wish to do so and that was considered to be of crucial importance by Baroness Hale (see paragraph 98); the head teacher had material to justify her fears on this front. An additional and particularly persuasive   reason why I accept the school's concern to be justified and to fall within article 9(2) on this ground be is that I have found the evidence of the head teacher to be thoughtful and correct on other points and indeed to be very convincing and that encourages me to accept her concerns about the effect on other Muslim girls of allowing girls to wear the niqab I also believe in adopting Lord Bingham's words in Begum (supra) that:  "34…it would in my opinion be irresponsible of any court lacking the experience, background and detailed knowledge of the head teacher…to overrule their judgment on a matter as sensitive as this". On the issue of proportionality, I consider that that the objective of avoiding pressure on other Muslim girls to wear the niqab was sufficiently important to justify limiting the article 9 right and the rule prohibiting the wearing of niqabs was rationally connected to it. It also went no further than necessary to accomplish the school's objective. In reaching those conclusions, I have not overlooked the contention of Mr. Squires that the evidence of the head teacher does not survive the close scrutiny required because she does not give the basis of this view or why this problem did not arise when the claimant's sisters wore the niqab. I consider that this is placing too high a burden on the school especially as first the recurring theme in Begum was to permit a margin of appreciation or discretion to the school as I have explained in paragraphs 48 to 51 above and second on matters such as the impact on other girls of permitting the wearing of niqab, the head teacher was using her judgment and her feel about the consequences of this change of the rules. (xi) The Application of the Samaroo Approach As I have explained, I was unable to accept the approach advocated in Samaroo for the reasons which I explained in paragraphs 54 to 57 above, but I then stated that I would return to consider what would be the effect of applying them, which I now do. Starting with the defendants' contention that they were justified in not permitting the wearing of the niqab because it might lead to pressure being applied to other girls to follow, I agree with Mr. Squires that that the head teacher goes no further than saying that there might be pressure applied but that she fails to explain why there might be pressure applied now even though none was exerted when the claimant's three sisters wore the niqab. Thus he says that there is no "pressing social need" of the kind referred to in Daly ...supra) [27]. I am unable to accept that argument because there is nothing wrong with a decision maker relying on the possibility of something occurring without being able to prove it. After all, as I explained in paragraph 53 (c) above, that is precisely what Dyson LJ said in Samaroo [39]. Another reason why I cannot accept Mr. Squires' complaint is, as Dyson LJ explained, that the defendants are entitled to a margin of discretion and that would enable them with the other factors to which I have referred in paragraphs 91 to 93 and above to show why there could now be a "pressing social pressure". It is necessary to recall that it was explained in the Begum case that the girls at the school subsequently expressed their concern that if the manifestation of religion in that case was to be allowed, they would face pressure to adopt it even though they did not wish to do so and that was considered to be of crucial importance by Baroness Hale (see paragraph 98); the head teacher had material to justify her fears on this front. On the security aspect, Mr. Squires contends that the defendants' case that this factor could justify the rule against wearing niqabs fails both stages of the Samaroo test but I am unable to agree. I have explained why the other suggested means of dealing with the security problem would not be effective in paragraphs 68 (j) and 80 above. Again, I must stress that the defendants enjoyed a margin of discretion and also as Dyson LJ said in respect of a complaint that definite proof was required before a decision-maker could rely on some fact, "39…that would ask the impossible. Proof is not required" I also cannot accept the claimant's further criticism to the effect that the claim of the defendants that the rule forbidding the wearing of niqabs could be justified on security aspects should not be accepted because first the risk that someone could enter the school dressed in a niqab is minimal and second that previous head teachers of the school had allowed the claimant's sisters to wear a niqab without any adverse security consequences. I am unable to accept these criticisms not merely because the defendants are entitled to a margin of discretion but also because this was an area in respect of which it would be "irresponsible" to overrule the head teacher's considered opinion. She after all knows what the risks are in her town and in her school and above all at the present time why matters might be different from what they were a few years ago. I was invited by Mr. Squires to consider if on each of the matters relied on by the school and which I have found to be grounds for derogation, the defendants' claims were "convincingly established" in the light of the Samaroo judgment and my answer is in the affirmative. So, if I were to apply Samaroo, I would be satisfied that the factors relied on by the school were proportionate ( (xii) Conclusions on the Article 9 Issue Although article 9 is engaged, I do not consider that the school has interfered with the claimant's article 9 rights but even if I am wrong then the interference has been justified under article 9(2) for the reasons which I have explained. As I have explained, an insuperable barrier to many of his submissions was the decision and reasoning in Begum.  IV. The Legitimate Expectation Issue (i) Introduction Mr. Squires contends that the claimant had a legitimate expectation that she would be permitted to wear the niqab at the school and that she would probably not have applied to the school had she known that she would not be permitted to do so. It is not the claimant's case that any written or oral representation was made to her which formed the basis of her expectation but rather that her legitimate expectation is based on the experience of her three elder sisters, who had been permitted to wear the niqab while they were pupils at the school some years ago. Further, it is contended by Mr. Squires that there was no proportionate or objective justification for changing the uniform policy so as to frustrate the legitimate expectation of the claimant that she could wear the niqab at her school. Mr. Oldham disagrees and he submits that the claimant cannot establish a legitimate expectation because: (a) The school had not adopted a practice which constituted a representation as to how it would deal with the claimant if she were to wear a niqab at school; (b) There is no evidence that the claimant had an expectation induced by the school that she would be allowed to wear the niqab; (c) The claimant cannot show any detrimental reliance on any such expectation; (d) If the claimant had such a legitimate expectation, it was lawfully extinguished by the statutory duties of the school's governors; and (e) If the claimant had such a legitimate expectation, it was lawfully extinguished by the school's pursuance of legitimate aims which were proportionate. Before dealing with each of these issues, it is appropriate to mention that both counsel rely on what was said by Laws LJ when giving the judgment of the Court of Appeal in Nadarajah v Secretary of State [2005] EWCA Civ 1363. He then explained insofar as is relevant to the existence of the expectation that: "68... Where a public authority has issued a promise or adopted a practice which represents how it proposes to act in a given area, the law will require the promise or practice to be honoured unless there is good reason not to do so. What is the principle behind this proposition? It is not far to seek. It is said to be grounded in fairness, and no doubt in general terms that is so. I would prefer to express it rather more broadly as a requirement of good administration, by which public bodies ought to deal straightforwardly and consistently with the public. … (ii) Had the school adopted a practice which constituted a representation as to how it would deal with the claimant if she were to wear a niqab at school? The case for the claimant is that her three elder sisters were each permitted to wear the niqab while they were pupils at the school and that in consequence she too should be able to wear one. It is not denied that the claimant's sisters wore niqabs when pupils at the school but the school denies that as at the time when the claimant joined the school in September 2005 or when she wished to wear a niqab in September 2006 there was a practice that she should be permitted to do so. The test to be adopted by the courts in determining if there was such practice at that time is an objective one bearing in mind that a legitimate expectation arises from "the existence of a regular practice which the claimant can reasonably expect to continue" (Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 401 per Lord Fraser of Tulleybelton). There was no evidence that when the claimant's sisters were at the school from 1994 onwards that anybody other than these three pupils wore the niqab. Indeed if there had been, I would have been sure that it would have been well known to one or other of them and that this would have been mentioned in one or other of their witness statements. So I conclude that it was highly unlikely that anybody other than the claimant's sisters had worn the niqab at the school from 1995 onwards. It is necessary to bear in mind not only that the claimant's three elder sisters wore the niqab between 1995 and 2004 and that the claimant wore it briefly for a school photograph unknown at the time to the school in 2005/2006 but also the following relevant points: (a) In the period from about July 2004 until September 2006, there were about 120 Muslim girls at the school out of a total of 1360 pupil. The Muslim pupils were allowed to wear hijabs in certain prescribed colours but this was not specified in any of the school's written uniform codes; (b)It is highly unlikely that any girl other than the claimant's three sisters wore the niqab at the school from 1994 onwards; (c) No girl had worn the niqab at the school since one of the claimant's sisters C had left in summer 2004; (d) During the four year period from the present head teacher's appointment in September 2002 , no girl other then the claimant's sisters had worn the niqab at the school prior to the decision of the claimant to wear the niqab in September 2006; (e) The school had a thorough revision of its uniform policy in 2001/2002 and again in 2003 and thereafter the school attached great importance to complying with its uniform requirements; (f) The school's uniform regime applied for all years other than when the girls in the sixth form which was during the last two years of a pupil's time at the school when there was no uniform policy. (g) The sixth form at the school was "very separate from the rest of the school" in the words of a previous deputy head of the school, who left in August 2002; (h) The last time before September 2006 when a pupil not in the sixth form and so subject to a uniform regime wore a niqab was in July 2002 when the claimant's next eldest sister C was about to go into the last two years of her time at the school; (j) The head teacher of the school would have had overall control of a decision as to whether it was permissible for a pupil to wear a niqab and there was a change of head teacher in September 2002; (k) No girl, who had not previously worn a niqab before the present head teacher arrived at the school, started to do so during her time in office before the claimant tried to do so four years later in September 2006;and (l) The new head teacher had her own views on uniform as was shown by her own review carried out in 2003 and she had resolved to enforce the uniform policy more rigorously. This policy did not expressly permit the wearing of niqabs A striking feature of those factors is that the niqab had not been worn at the school from July 2004 onwards by any of the 130 Muslim girls and in the previous two years then it was worn by only one girl C, the claimant's sister, who was then in the sixth form which did not have a uniform regime and which was according to the very significant but undisputed evidence of the school's former deputy head teacher "very separate from the rest of the school". Thus, there was very limited wearing of niqabs and this is significant because the new head teacher had not stated what her attitude was to the wearing of niqab by those subject to the uniform regime. There must in all those circumstances, at the lowest have been considerable uncertainty about whether in the circumstances prevailing in 2005 or 2006, a niqab was permitted to be worn especially as during her time in office first nobody subject to the uniform regime had started to wear it and second nobody in the period from July 2002, who was subject to the uniform regime had worn the niqab at all as the claimant's youngest sister was then in the sixth form and so outside uniform control. It follows that in the words of Laws LJ in Nadarajah (supra), the school had not by September 2005 or September 2006: "adopted a practice which represents how it proposes to act in relation to [the wearing of niqab by any girl in the part of the school outside the sixth form which was not subject to the uniform regime]". If, which is not the case, I was in any doubt about this conclusion, I would have reached the same conclusion by focussing: (a) on all the girls in the school because there was not a practice how the school in 2005 or 2006 would act under the new head teacher in the light of the circumstances prevailing at the time in relation to the wearing of the niqab. At that time no girl had worn the niqab for over a year and no girl had started wearing it since 1998 or 1999 when C had started to wear it. There must have been at least uncertainty as to what the new head teacher would do; or (b) solely on girls who were as young as 12 years old as this was the claimant's age in September 2006. The age of the student can be relevant because as I have explained in paragraph 64(c) any obligation on Muslim females to cover their faces with a niqab applied only to "Muslim women" and the head teacher said that she did not consider a person of 12 years of age to be a "woman". The last time before September 2006 when any girl aged 12 years of age wore the niqab at the school would have been when the claimant's next oldest sister C was at that stage and that would have been in about 1999. So that would have meant that as at September 2006, no girl of the claimant's age in September 2006 would have worn the niqab for about 7 years. During that period, as I have explained, there had been a change of headmistress and reviews of uniform. So there must have been uncertainty and certainly not a practice. In those circumstances, there could not have been a practice (let alone "a regular practice") in either September 2005 or September 2006 that permitted the wearing of the niqab at the school. This means that the case of the claimant based on legitimate expectation must fail on either the basis set out in paragraph 108 or the basis stated in paragraphs 106 and 107 above. As I have heard submissions on other aspects of the reasonable expectation claim, I will comment on them briefly. (iii) Was there evidence that the claimant had an expectation induced by the school that she would be allowed to wear the niqab? Mr. Squires point out the claimant states that she had this expectation induced by the school's policy of allowing her sister to wear the niqab during their time as pupils there. Mr. Oldham contends that this is not so but I have no reason to doubt the evidence of the claimant that: "I thought that I would be able to wear the niqab at[Y] school because all three of my elder sisters had done so". This belief was according the claimant induced by the school because they did not prevent the claimant's sisters from wearing the niqab and again I have no reason not to accept this evidence. (iv) Can the claimant show any detrimental reliance? Mr. Oldham contends that that the claimant cannot show any detrimental reliance but I am unable to agree. The claimant says in her witness statement that if she had known that she would not have been allowed to wear the niqab when she decided to go to the school, then in those circumstances,: "I would have gone to another school, which would accept me and allow me to practice my religion" (v) If the claimant had a legitimate expectation, was it lawfully extinguished by the statutory duties of the school's governors? Both sides seek to drive assistance from another part of the judgment of Laws LJ in Nadarajah ...supra) when he explained that: "68… Accordingly a public body's promise or practice as to future conduct may only be denied, and thus the standard I have expressed may only be departed from, in circumstances where to do so is the public body's legal duty, or is otherwise, to use a now familiar vocabulary, a proportionate response (of which the court is the judge, or the last judge) having regard to a legitimate aim pursued by the public body in the public interest. The principle that good administration requires public authorities to be held to their promises would be undermined if the law did not insist that any failure or refusal to comply is objectively justified as a proportionate measure in the circumstances". 69.…Of course there will be cases where the public body in question justifiably concludes that its statutory duty (it will be statutory in nearly every case) requires it to override an expectation of substantive benefit which it has itself generated…" Mr. Oldham contends that any legitimate expectation of the claimant was extinguished by section 21 (1) of the Education Act 2002 which provides that "subject to any other statutory provisions, the conduct of the maintained school shall be under the directions of the school's governing body" and its predecessor section (section 38(1) of the School Standards and Framework Act 1998) which was in identical terms. It is said that the rules on niqab were made pursuant to these provisions. I cannot agree for two main reasons. First, the approach of Laws LJ in Nadarajah (supra) was that the relevance of a statutory duty was (with my emphasis added) that " 69 …there will be cases where the public body in question justifiably concluded that its statutory duty… requires it to override an expectation of substantive benefit which it itself generated" The relevant statutory provisions in this case are, as I have shown, merely permissive and so they did not require the school to do anything and certainly not to override an expectation. Second, if Mr. Oldham was right and these statutory provisions trumped any legitimate expectation, the consequences would be surprising and disturbing because it would mean that the governors of a school could use these statutory provisions to override any legitimate expectation. So if Mr. Oldham' submission was right, the governors of the school would for example, be entitled to change overnight its long established written uniform requirements and then to insist that on the following day that girls would be only permitted to attend the school in some new and extremely expensive uniform; that cannot be what Laws LJ intended should occur. (vi) If the claimant had a legitimate expectation, was it lawfully extinguished by the school's pursuance of legitimate aims and were the steps proportionate? Mr. Squires contends that as there has been detrimental reliance by the claimant who would not have gone to the school if she had known that she could not wear the niqab, this constitutes an obstacle for the school and he points out correctly in my view that this submission is supported by the what Laws LJ stated in Nadarajah (supra) which was that: "69…Otherwise the question in either case will be whether denial of expectation is in the circumstances proportionate to a legitimate aim pursued. Proportionality will be judged, as it generally is to be judged, by the respective force of the competing interests arsing in the case. Thus where ...there Is detrimental reliance…these are instances where denial of the expectation is likely to be harder to justify as a proportionate measure…" I will keep that factor very much in mind in the claimant's favour when considering how to approach the issue. According to Mr. Squires, the evidence shows that the claimant is happy and settled at the Y school where she has made friends and so she wants to stay there and not to move to another school where she would be allowed to wear the niqab. It is also said that the school could allow only the claimant and no other pupil to wear the niqab and at the same time make it clear that nobody else would be allowed to wear the niqab. Thus it is said that the claimant should be the only person allowed to wear the niqab. To allow one girl to wear the niqab is not an acceptable solution because of (a) the importance attached to the school for the girls to wear identical uniform for the reasons which I have outlined in paragraph 64 (a) above;(b) the educational reasons which I summarised in paragraph 64 (f) to (i) above and which significantly apply with particular force to the claimant because of her particular difficulties as a shy and a very quiet pupil; and (c) the security factors to which I referred in paragraph 64(f). Any of those factors would in my opinion be sufficient by itself to justify rejecting the suggestion of allowing the claimant to be the only girl allowed now or in the future to wear the niqab even apart from the fact that this solution was not raised or suggested at the time when the decision under challenge was made. In addition if this solution was adopted, there may, as the head teacher fears be pressures from peers or family for other girl to follow that course. It is necessary to recall that it was explained in the Begum case that the girls at the school subsequently expressed their concern that if the manifestation of religion in that case was to be allowed, they would face pressure to adopt it even though they did not wish to do so and that was considered to be of crucial importance by Baroness Hale (see paragraph 98); the head teacher had material to justify her fears on this front. Furthermore if the school allowed only one girl (namely the claimant) but no other girl to wear the niqab, then the school might well find itself facing first an irrationality claim based on dissimilar treatment for girls in a similar position similar to the claim made against the school and set out in paragraph 130 below and second perhaps a claim based on an infringement of article 14 in relation to the other pupil's article 14 rights. The school also has a margin of discretion. It is necessary to repeat again that these are matters in respect of which the school is entitled to a margin of discretion , as was explained in Begum for the reasons to which I have referred in paragraph 48 to 50 above. Indeed the adverse consequences of complying with the claimant's demands are matters which in Lord Bingham considered in Begum that: "it would be irresponsible of any court, lacking the experience, background and detailed knowledge of the head teacher, staff and governors, to overrule their judgment on a matter as sensitive as this" [34]. Mr. Squires then submits that in order to justify a failure to comply with an expectation, the school has to justify its change of policy. In my view, there is not a requirement for a defendant to justify a change of policy or to do anything other than, again in Laws LJ's words in Nadarajah (supra), to establish " a proportionate response (of which the court is the judge, or the last judge) having regard to the legitimate aim pursued by the public body in the public interest"([68] and also see [69]). I reject the notion that in order to avoid being liable for a representation leading to an expectation that something will happen or be done, a public authority has to show a change of circumstance and not merely a proportionate response. First, this requirement has not been referred to in Nadarajah or in any case cited to me . Second, it is in conflict with the accepted approach which is that there is a wide category of circumstances which can justify a public body not complying with somebody's legitimate expectation. I have already quoted what Laws LJ has said on this in paragraphs 113 and 117 above. Third, if a change of circumstance has to be shown to explain why an expectation cannot be relied on, it is difficult to see how, for example, many changes in school uniform or school rules could be justified in the face of an expectation that they would remain unchanged. Even if this conclusion is wrong and the school has to show a change of circumstances, then in my view it could satisfy that requirement because the evidence of the head teacher shows that matters have moved on during this period with a greater number of Muslim girls at the school and increased concern for security. In addition, the experience of members of staff at the school was that they considered that they were impeded in teaching the sisters of the claimant because they wore the niqab as I have explained in paragraphs 84 and 87 above. I return to the reasons put forward by the school to justify the policy for not allowing the claimant to wear a niqab and in doing so, I bear in mind the well known rules on proportionality. Mr. Squires attaches importance to the fact that the claimant would suffer if she was required to move schools as she has settled into school Y. There is no expert or other evidence adduced by the party relying on it- namely the claimant- to show that this disruption to the claimant will be anything other than minimal and of short duration but I will nevertheless take this matter into account even though the claimant has not been to the school for more than four months and according to her witness statement has not remained in contact with her friends. The school puts forward a number of grounds to justify the policy of requiring the claimant not to wear the niqab. As I have already set them out, I will merely summarise them as being; (a) the educational factors in respect of which I have summarised the evidence in paragraph 64(e) to (i)above. Mr. Squires contends that it is strange that this is a matter of concern to the defendants when other schools permit the wearing of the niqab, such as the selective entry school Q where the claimant has a place if she decides to leave school Y. He also submits that if the claimant had to remove her niqab, this might undermine her confidence and that the claimant wearing the niqab would have to be prompted more Mr. Squires does not agree with what the teachers at the school say were the problems caused by the claimant's sisters wearing veils. I am not in a position in the absence of cross-examination or expert evidence to disagree with what the teachers at the school have said and as I have explained, the decision in ex parte Cram means that for the purpose of the present hearing, I have to assume that the defendants' evidence is correct. This shows that I must not, and do not, reject the argument based on the cogency of these educational factors; (b) the cohesive and equality factors of having a uniform with which all students comply and I have summarised the evidence in respect of this in paragraph 64(a) above. This again is a factor which I should not seek to overrule in the absence in this case of cogent rebutting evidence or cross-examination; (c) the security factors, which I summarised in paragraph 64(j) above and where I have commented on the objections. Again this is an issue on which there has been no cross-examination or cogent contradictory evidence; (d) the pressure which would be applied to other Muslim girls to wear a niqab if the claimant was allowed to do so is a concern which I have dealt with in paragraph 64 (l) above. This is a matter on which there is no cogent contradictory expert evidence which would have been required to answer the evidence of the head teacher. I must also stress the great relevance to each of these four issues of the statement of Lord Bingham in Begum set out in paragraph 51 which was that it would be "irresponsible" for me as a judge to overrule the evidence of the staff on these sensitive educational issues especially as I unlike the defendants have no knowledge or experience of running a school. Indeed, in my view, each of these factors constitutes a legitimate aim for a school to follow. Educational standards and security factors are clearly important and relevant aims for a school to pursue. Similarly the cohesive and equality factors are also important and sensible aims for school to strive for as is their concern relating to pressures applied to other Muslim girls if the wearing of niqabs was permitted. I have considered whether the response of the school was proportionate to frustrate the claimant's reliance on the school's previous policy and I have come to the firm conclusion that it was because: ...a) each of the objectives of the defendants in not permitting the claimant to wear the niqab was first sufficiently important to justify limiting a fundamental right and any prior reliance on the school's previous policy. I have explained why in the case of the educational factors (see paragraphs 70 to 78 above) , security factors (see paragraphs 79 to 83 above) educational factors (see paragraphs 83 to 88 above) and pressure on other girls (see paragraphs 90 to 92 above); (b) the rule prohibiting the wearing of the niqab was rationally connected to each of these objectives; and (c) the means necessary to achieve this aim were no more than necessary to achieve this objective. They were not severe and further the claimant has an offer of a place at the selective entry girls' grammar school Q with its good academic record where she would be able to wear the niqab. It is noteworthy that the head teacher made a considerable and commendable number of inquiries about the significance of the niqab, as I explained in paragraph 64(b) to (e) above, before concluding that its use in the school was not be permitted for the claimant . All in all, the head teacher carried out a careful balancing exercise taking account of the relevant factors before reaching the decision under challenge. I stress that, as with the challenge under article 9, the claimant's case additionally fails to take account of the margin of appreciation due to the school authorities as the experts on each of these matters, which all fall well outside the knowledge of judges. (vii) Conclusions The claim based on the breach of the claimant's legitimate expectation fails because first there was not a practice (let alone a regular practice) amounting to a representation that the defendants would permit the claimant to wear a niqab at school and second that if there was such a representation, it was departed from by the defendants for good reasons which were a proportionate response having regard to the legitimate aims pursued by the school in the public interest. V. The Similar Treatment Claim The thrust of this complaint is that the claimant's three older sisters A,B and C were in a similar position to the claimant but they, unlike the claimant, had been allowed to wear the niqab at school. It is said by Mr. Squires that it is axiomatic to rational decision-making that identical cases should be treated in an identical way unless there is some good reason not to do so. The claimant's case is that there was no good reason for the school to change its policy on the wearing of niqabs in the way that it did and thereby to treat the claimant differently from her sisters, A, B and C. Mr. Squires says that if there had been any reason to distinguish the claimant from her sisters this should have been explained but that has not occurred. He says that the fact that there had been a change of uniform is irrelevant because the special clothing in the form of the hijab, which Muslim girls were allowed to wear was not referred to in any of the written revisions of the uniform policy. Essentially this point is based on the fact that there is according to Mr. Squires no explanation as to why it was permissible for the school to permit the claimant's three sisters A , B and C to wear the veil but yet not permissible for the claimant to do so. In support of this claim, Mr. Squires points out that in Matadeen v Pointu [1999] 1 AC 98, Lord Hoffmann explained at page 109 that: "..treating like cases alike and unlike cases differently is a general axiom of rational behaviour. It is, for example, frequently invoked by the courts in proceeding for judicial review as a ground for holding some administrative decision to have been irrational" In response, Mr. Oldham contends that the position of, on the one hand, the claimant and, on the other hand, her sisters are very different and that explains their different treatment. Indeed just after the passage which I have quoted from Matadeen (supra) Lord Hoffmann explained that: "..of course persons should be uniformly treated unless there is some valid reason to treat them differently…The reasons for not treating people uniformly often involve...questions of social policy" In support of his claim that the claimant is not entitled as of right to the same treatment as her sisters, Mr. Oldham stresses that there are three valid reasons for considering them differently. First, the claimant entered the school many years after her sisters. As I have explained whereas the claimant entered the school in September 2005, her next youngest sister C had entered the school in September 1998 and she was no longer subject to the school's uniform rules in July 2002. The claimant's case seems to assume that since that time, conditions in the world had stood still while the evidence of the head teacher shows that matters have moved on with a greater number of Muslim girls at the school and increased concern for security. In addition, the experience of members of staff at the school was that they considered that they were impeded in teaching the sisters of the claimant because they wore the niqab as I have explained in paragraphs 84 and 87 above. This time gap between the time when the claimant and her sisters were at the school justifies the different treatment of their wishes to wear the niqab. Second, during that time interval, there had been changes in the school as the head teacher had changed. Third, there had been changes in policy, which the school was entitled to introduce especially as it was not in breach of the legitimate expectation of the parties, which I have just explained is not the case. Those changes in policy are in essence the matters to which I specified in paragraph 64 above and in respect of which the school was entitled to make these changes In my view, each of these three factors by themselves would have justified the decision to treat the claimant differently from her sisters but if I had been in any doubt about this, I would have taken into account two further factors which each separately would have justified my decision. The first is the substantial margin of discretion to which the head teacher was entitled because of her particular knowledge of the difficult policy matters involved and also what was required in this school in this town at this time. The second is that in my view the court should not be reluctant to find what Lord Hoffmann considered "some valid reason to treat them differently" because it must always be remembered that the basis of this claim is irrationality, which has a high threshold and it is often associated with Wednesbury unreasonableness. In this case the case put forward by the claimant on this point falls a long way short of reaching the threshold which would entitle the claimant to succeed on this issue. Therefore this head of claim based on irrationality and the failure to treat like cases alike must fail. VI. Delay and Alternative Remedies Mr. Oldham raised two points which he contends were additional reasons why the claim had to be rejected. As I will be dismissing the claims for the reasons which I have sought to explain, these two points cease to be of practical importance. On the delay point, I ought to say that my initial view is that the claim should not fail on that point as this case was brought within the prescribed three-month period and the claimant's solicitors could not have brought this case earlier as they had not received their public funding for it. In any event, as I have indicated in paragraph 21 above, I believe that the decision which should have been the subject of the present challenge as being the one which stated that the claimant could not attend school wearing a niqab was taken later than 14 September 2006 which is the date on the claim form. As the consequence of my conclusions is that the claim must be dismissed, I do not propose to express a view on the defendants' contention that as the claimant had been offered a place at another school Q, she had an alternative remedy available to her and for that reason the claim should be rejected. VII Conclusion For the reasons which I have explained, this claim must be dismissed. It might be some consolation to the claimant and her family to know that their case has been put forward with commendable skill by Mr. Squires as has the rival case by Mr. Oldham. Everybody involved in this case will be anxious to ensure that the claimant can return to a school as soon as possible especially as she has been away from school for more than four and a half months and this is not surprisingly depressing her. She is apparently only receiving 3 hours tuition each week which compares with about 30 hours which she would be receiving if she were to be still at school. I hope that she and her parents give very serious consideration to the offer of a place from the Q school which has the appropriate academic standing and to which the local authority will provide transport for the claimant. No reason has been put forward as to why this school is unsuitable for the claimant and if it is not accepted , the claimant can expect at best a further substantial period away from school.

HARJIT SINGH BEDI,J. This appeal arises out of the following facts About 11.9 bighas of land situated in two villages, Kasumpati-Junga and Patii-Rihana was numberified for acquisition under Section 4 of the Land Acquisition Act, 1894 hereinafter called the Act in the official Gazette on 2nd April 1988, 23rd July 1988 and 28th September 1988. The Collector by his Award dated 28th July 1988 granted a sum of Rs.43,330/- per bigha for the acquired land. The claimant thereafter filed a reference before the District Judge, Shimla, who vide his order dated 11th June 1992 determined the market value at Rs.70,000/- per bigha rejecting the claimants plea for the award of Rs.1,75,000/- per bigha. The matter was taken to the Division Bench of the High Court in First Appeal and the Bench vide its judgment dated 30th December 1999 companyfirmed the companypensation awarded by the District Judge on reference but granted enhanced interest and solatium as per the entitlement of the claimant. The first appeal filed by the State Government seeking a reduction in the companypensation granted by the District Judge was, however, dismissed. The present appeal at the instance of the claimant is before us against the judgment and order of the Division Bench aforementioned. Mr. Agrawala, the learned companynsel for the claimantappellant has argued that as per Notification of the year 1980 the adjoining land in the same villages had been acquired for the same purpose and companypensation at Rs.1.75 lakh per bigha minus 30 towards development charges had been awarded by the High Court by its judgment Ext.PY. He has, accordingly, pleaded that as the present matter pertained to an acquisition of the year 1988, that is almost 8 years after the earlier acquisition, a minimum of Rs.1.75 lakh was payable to the appellant. Mr. Sharma, the learned companynsel for the respondents has, however, pointed out that this matter had been dealt with by the Division Bench and the plea had been rejected by observing that there was numberevidence to show that the land acquired in the year 1980 and the land acquired by the impugned Notification was similar, of the same quality, classification or potential for development and in the absence of any such evidence merely because some adjoining pieces of land had been granted a higher companypensation, there was numberjustification in granting anything more in the present case. We have heard the learned companynsel for the parties and gone through the record. We are of the opinion that the observations of the Division Bench with regard to the quality and the situation of the land acquired in the year 1980 and the present acquisition are number quite accurate. In this companynection, we may refer to the evidence of the land owner Lalit Kishore, who deposed that both these lands fell in the municipal area and adjoined Chhota Shimla Bazar and new companyonies and flats made by the Shimla Development Authority were close by and that the land in question was level and was served with facilities like electricity, water, and sewerage etc. Even assuming for a moment that this statement companyld said to be self-serving, we have chosen to companysider the evidence produced by the respondent State itself. We refer in particular to the statements of Mangat Ram Patwari RW1 and Pratap Singh Kanoongo PW-2. Mangat Ram stated that the lands acquired by the two Notifications were situated side by side and that the land in all 4 villages which were under acquisition were of similar quality. Pratap Singh Kanoongo RW2 was even more forthcoming when he stated I was posted in Shimla from 1986 to June 1990. I have seen all the villages of the acquired lands. It is companyrect that Khalini falls by the side of Moza Patiyog. Thereafter Patii Rehan Rural and then urban. By its side village Kasumpati Jhunga falls. The quality of all these land is the same and were acquired for the same purpose. It is companyrect that in the past 15 to 20 years in these villages private and Govt. companyonies have companye up in large scale. The boundary of Moza Kasumpati Jhunga goes up to Pari Mahal. Govt. companyonies have been companystructed right up to Pari Mahal. In these villages land was acquired even for SDA. In all these villages modern facilities are available. I have number brought that record on the basis of which Exhibit-RC, RE and RG have been prepared. The acquired land is by the side of BCS school in Patiyog. The land of Patti Rehana falls by the side of Brook Hurst. The land of Kusumpati Jhunga falls by the side of Kasumpati Bazar. These statements of the States witnesses clearly fortify Mr. Agrawalas submission that the land subject to the two acquisition i.e.

Monday, 18 July 2005 THE LORD CHIEF JUSTICE: Introduction Both these appeals against sentence are listed together so that this court may consider the application and interpretation of the mandatory minimum sentencing provisions in respect of offences committed contrary to section 5 of the Firearms Act 1968 ("the Firearms Act"). The provisions were inserted into the Firearms Act as section 51A of that Act by section 287 of the Criminal Justice Act 2003 (the "CJA"). Section 51A of the Firearms Act has been effective since 22 January 2004. Section 51A provides so far as relevant: "(1) This section applies where -- (a) an individual is convicted of -- (i) an offence under section 5(1)(a), (ab), (aba), (ac), (ad), (ae), (af) or (c) of this Act, or (ii an offence under section 5(1A) of this Act, and (b) the offence was committed after the commencement of the section and at a time when he was aged 16 or over. (2) The court shall impose an appropriate custodial sentence (or order for detention) for a term of at least the required minimum term (with or without a fine) unless the court is of the opinion that there are exceptional circumstances relating to the offence or to the offender which justify its not doing so. .... (4) In this section 'appropriate custodial sentence .... means' (a) in relation to England and Wales -- (i) in the case of an offender who is aged 18 or over when convicted, a sentence of imprisonment .... .... (5) In this section 'the required minimum term' means -- (a) in relation to England and Wales -- (i) in the case of an offender who was aged 18 or over when he committed the offence, five years .... ...." This appeal is primarily concerned with subsection (2) of section 51A. More particularly it is concerned with what is capable of constituting "exceptional circumstances relating to the offence or the offender" for the purpose of section 51A. Section 51A of the Firearms Act sets out a series of circumstances in which it is unlawful to be in possession of, or purchase, or acquire, or manufacture, or sell, or transfer a list of different firearms. Of that list one which is selected for falling within section 51A is (aba): any firearm which either has a barrel less than 30 centimetres in length or is less than 60 centimetres in length overall, other than an air weapon, a muzzle-loading gun or firearm designed as a signalling apparatus. The weapons, with which we are concerned, are ones in relation to which Parliament by section 51A has signalled it was important that there should be imposed deterrent sentences. By "deterrent sentences" we mean sentences that pay less attention to the personal circumstances of the offender and focus primarily upon the need for the courts to convey a message that an offender can expect to be dealt with more severely so as to deter others than he would be were it only his personal wrongdoing which the court had to consider. In the case of Mr Rehman his sole conviction was for having in his possession a firearm which fell within section 5(1)(aba) of the Firearms Act. In the case of Mr Wood it was count 9 on the indictment which involved such a weapon. When we come to examine the circumstances of Mr Wood's sentence, the fact that one of the weapons falls within the category, possession of which involves contravening section 5(1)(aba) of the Firearms Act, is a matter of considerable importance. The appellants' submissions The first submission which is made by Mr Farrell QC on behalf of the appellant Gary Wood is that the mandatory minimum sentence of five years' imprisonment is incompatible with the European Convention on Human Rights. Mr Farrell submits that section 51A requires the court to impose sentences that constitute inhuman and degrading treatment or punishment that contravenes Article 3 of the European Convention on Human Rights. Sentences which could result in arbitrary and disproportionate deprivation of liberty in violation of Article 5 or Articles 3 and 5 when read together. He submits that it is not possible to read down section 51A so as to make it compatible with Mr Wood's rights under the Convention. Accordingly Mr Farrell seeks a declaration to that effect. Mr Farrell did not appear in the court below and it was only at a late stage that he was able to deliver a skeleton argument raising this point for the first time. Mr Hardy, who appears on behalf of the appellant Mr Rehman (although he did not appear below) does not adopt this submission. As the contention is dependent on the proper interpretation of section 51A, we do not propose to deal with Mr Farrell's first submission until we have set out our views on his next submission because it is only when we have set out our views as to how section 51A(2) is to be interpreted that there can be any question of incompatibility. In those circumstances Mr Farrell has reserved his full argument on incompatibility until he has had an opportunity of considering this judgment. This has an advantage because if we were going to contemplate acceding to his first submission, we would adjourn so that the necessary notice can be given to the Crown under section 5 of the Human Rights Act and the relevant Criminal Procedure Rules. The second submission upon which Mr Farrell relies is a submission which is supported by Mr Hardy on behalf of Mr Rehman. It is as to the proper interpretation of section 51A(2), having regard to the obligation of the court under section 6 of the Human Rights Act 1998 and section 3(1) of that Act. These sections require the court not to act in a way which is incompatible with a Convention right and as far as it is possible to do so, to give effect to primary legislation in a way which is compatible with Convention rights. Insofar as it is necessary to do so, Mr Farrell and Mr Hardy both contend that it is necessary so as to achieve compliance with the Convention to give a wide interpretation to the reference to "exceptional circumstances" in section 51A. The third issue that arises on the appeal, which has been the subject of submissions by both Mr Farrell and Mr Hardy, is whether in each case the respective trial judges should have decided that these were circumstances relating to the offence or the offender to justify not imposing the minimum sentence of five years. In Mr Rehman's case (although this is not of direct relevance because of the period he has already served in custody) it is submitted that no custodial sentence should have been imposed. In Mr Wood's case it is submitted that a lesser sentence than five years' imprisonment should have been imposed. The way the matter is put on Mr Wood's behalf is particularly relevant when we come to set out the sentences which were imposed upon him. The Question of Interpretation It is not necessary to set out the provisions of Article 3 and Article 5, but it is necessary to refer to R v Offen and Others [2001] 1 Cr App R 372. In Offen the Court of Appeal considered a different mandatory requirement, a mandatory requirement which created an obligation to impose a life sentence under section 2 of the Crime (Sentences) Act 1997 when a person is convicted for a second time of a serious offence. By section 2(2) of that Act the court is then obliged to impose such a sentence unless it is of the opinion that there are exceptional circumstances relating to the offences or to the offender which justify it not doing so. There is a provision in that Act requiring the court to state, when it is of the opinion that there are exceptional circumstances, what those exceptional circumstances are. There is no similar provision relating to section 51A. In Offen the Court of Appeal adopted the general definition of the word "exceptional" given by Lord Bingham CJ in R v Kelly [2000] QB 198. Having done so, the court went on to consider the impact of the Human Rights Act 1998 in regard to the statutory provision which the court was there considering. The court also considered R v Buckland [2000] 1 WLR 1262, in which Lord Bingham CJ had stated at page 1269 that in that case on all the evidence it was safe to conclude that the defendant does not present a serious and continuing danger to the public such as could justify the imposition of a life sentence. We refer to those words of Lord Bingham in Buckland for two reasons. First, they show that he was focusing on cases requiring consideration of whether there are exceptional circumstances when there is a need to look at all the circumstance involved. Then it is not appropriate to look at each circumstances separately and to conclude that it does not amount to an exceptional circumstance. A holistic approach is needed. There will be cases where there is one single striking feature, which relates either to the offence or the offender, which causes that case to fall within the requirement of exceptional circumstances. There can be other cases where no single factor by itself will amount to exceptional circumstances, but the collective impact of all the relevant circumstances truly makes the case exceptional. The second reason why it is necessary to have Lord Bingham's words in mind is because the provisions that were considered in Offen and in Buckland had a different objective from those that are being considered here. The statutory provisions in Offen and in Buckland were concerned with the importance of protecting the public against the dangerous activities of the particular offender. In the case of the Firearm Act the focus is different. So far as we can determine the rationale of Parliament, the policy was to treat the offence as requiring a minimum term unless there were exceptional circumstances, not necessarily because the offender would be a danger in the future, but to send out the deterrent message to which we have already referred. The mere possession of firearms can create dangers to the public. The possession of a firearm may result in that firearm going into circulation. It can then come into possession of someone other than the particular offender for example by theft in whose hands the firearm would be a danger to the public. Parliament has therefore said that usually the consequence of merely being in possession of a firearm will in itself be a sufficiently serious offence to require the imposition of a term of imprisonment of five years, irrespective of the circumstances of the offence or the offender, unless they pass the exceptional threshold to which the section refers. This makes the provision one which could be capable of being arbitrary. This possibility is increased because of the nature of section 5 of the Firearms Act. This is different from most sections creating criminal offences. In the majority of criminal offences there is a requirement that the offender has an intention to commit the offence. However, firearms offences under section 5 are absolute offences. The consequence is that an offender may commit the offence without even realising that he has done so. That is a matter of great significance when considering the possible effect of section 51A creating a minimum sentence. In Offen the court went on to deal with the general approach to the impact of the Human Rights Act on mandatory sentences. We draw attention to paragraphs 93-95 and 99 where the court said: "93. As to article 5, Mr Perry accepts that the overall purpose of the article is to ensure that no one is deprived of his liberty in an 'arbitrary fashion': Quinn v France (1995) 21 EHRR 529, 548-549, para 42. He relies in particular on Weeks v United Kingdom (1987) 10 EHRR 293. The significance of that decision was that the court considered the defendant's renewed detention after being released on licence was lawful and that the rehabilitation of offenders was a legitimate aim. (This country fell foul of article 5(4) because of the absence at that time of any procedure by which the lawfulness of the offender's detention could be determined by a properly constituted independent board. That defect has since been remedied.) 94. Not surprisingly, Mr Fitzgerald takes a very different view of the relationship between section 2 of the 1997 Act and articles 3 and 5. He stresses that life imprisonment is the most serious punishment that the courts in this jurisdiction can impose. It means that although a prisoner may be released, he still remains liable to be recalled. That liability is a permanent one. In addition, he contrasts the position of a life sentence prisoner with that of a prisoner sentenced to a determinate sentence. When a determinate sentence has been served, release is automatic. In the case of a life sentence prisoner, he will not be released after the end of the tariff period unless the Parole Board can be satisfied that he does not constitute a risk to the public for the future. This is the very object section 2 was designed to achieve in relation to those who would not be sentenced to life imprisonment before that section came into force. It is clear that as a result of section 2, offenders are now being sentenced to life imprisonment before that section came into force. It is clear that as a result of section 2, offenders are now being sentenced to life imprisonment when there is no objective justification for that sentence. Such a result can be categorised as being arbitrary and not proportionate. 95. In his speech in R v Governor of Brockhill Prison, Ex p Evans (No 2) [2000] 3 WLR 843, 858, Lord Hope of Craighead considered the relationship between article 5 of the Convention and our domestic law. In the course of doing so, he recognised that the question would arise as to whether, 'assuming that the detention is lawful under domestic law, it is nevertheless open to criticism on the ground that it is arbitrary because, for example, it was resorted to in bad faith or was not proportionate'. Here no question of bad faith arises. In addition, we recognise that there have been, and will be, cases where section 2 of the 1997 Act has, and will, operate in a proportionate manner. However, as the section has hitherto been interpreted, it can clearly operate in a disproportionate manner. It is easy to find examples of situations where two offences could be committed which were categorised as serious by the section but where it would be wholly disproportionate to impose a life sentence to protect the public. Whenever a person is convicted of an offence, there is always some risk that he or she may offend again. Equally, there are a significant number of cases in which two serious offences will have been committed where the risk is not of a degree which can justify a life sentence. We refer again to the very wide span of manslaughter, which is a serious offence within the Act. An unjustified push can result in someone falling, hitting his head and suffering fatal injuries. The offence is manslaughter. The offender may have committed another serious offence when a young man. A life sentence in such circumstances may well be arbitrary and disproportionate and contravene article 5. It may also be a punishment which contravenes article 3. .... 99. This does not mean that we are approaching the passing of an automatic life sentence as though it is no different from the imposition of a discretionary life sentence. Notwithstanding the interpretation resulting from the application of section 3(1) of the 1998 Act suggested, section 2 of the 1997 Act will still give effect to the intention of Parliament. It will do so, however, in a more just, less arbitrary and more proportionate manner. Section 2 will still mean that a judge is obliged to pass a life sentence in accordance with its terms unless, in all the circumstances, the offender poses no significant risk to the public. There is no such obligation in cases where section 2 does not apply. In addition, if the judge decides not to impose a life sentence under section 2, he will have to give reasons as required by section 2(3). Furthermore, the issue of dangerousness will have to be addressed in every case and a decision made as to whether or not to impose a life sentence." Before proceeding further it is necessary to determine the meaning of section 51A(2) in accordance with the ordinary principles applicable to statutory interpretation. This involves seeking to determine the meaning of the language used by Parliament in its statutory context. It is to be noted, as already pointed out, that part of the context is that section 5 of the Firearms Act creates an absolute offence. Secondly, the purpose of the provision is to ensure that absent exceptional circumstances the courts will always impose deterrent sentences. However, it is to be noted that if an offender has no idea that he is doing anything wrong, a deterrent sentence will have no deterrent effect upon him. The section makes clear that it is the opinion of the court that is critical as to what exceptional circumstances are. Unless the judge is clearly wrong in identifying exceptional circumstances when they do not exist, or clearly wrong in not identifying exceptional circumstances when they do exist, this court will not readily interfere. The reference in the section to the circumstances of the offender is most important. We have no doubt that the fact that an offender is unfit to serve a five year sentence may be relevant, as is the fact that he or she is of very advanced years. This is necessarily to be read into the words used, otherwise a sentence may be inappropriately harsh and even fall within the language of article 3 of the European Convention. Finally, we emphasise what we have already referred to in this judgment, the importance of not dividing the circumstances into those that are capable of being exceptional and those which are not. In our judgment, we do not regard this as being a situation where it is necessary to read the section down, relying on section 3 of the Human Rights Act 1998 so as to comply with the Convention. We consider that the words are clearly capable of being interpreted as complying with the Convention. This is an interpretation which is made easier by the fact that Parliament passed the provision as part of the 2003 CJA which was passed in the knowledge that the section had to comply with the Human Rights Act. Furthermore, it can be assumed that Parliament had the decision of Offen in mind when it selected the same language for the exception. There was a suggestion that in this case we might find it helpful to look at the statements of Ministers made both in Parliament and outside Parliament to assist us interpret the section. But in our judgment this is unnecessary and indeed would be inappropriate. It is clear in our judgment that, read in the context to which we have referred, the circumstances are exceptional for the purposes of section 51A(2) if it would mean that to impose five years' imprisonment would result in an arbitrary and disproportionate sentence. The Individual Cases Zakir Rehman Zakir Rehman appeared before His Honour Judge Joseph at the Croydon Crown Court on 14 January 2005. He pleaded guilty to an offence contrary to section 5(1)(aba) of the Firearms Act 1968 of having in his possession what was described as a Kimar Beretta venting handgun which was less than 60 centimetres long overall and with a barrel less than 30 centimetres long. It was a replica blank-firing handgun, but it was a type of handgun which, although a replica, could easily be altered so as to be capable of firing live ammunition. It is a type of firearm that has been used in the commission of many criminal offences by offenders who know that it has this capacity. Mr Rehman was sentenced to five years' imprisonment. It is clear that the reason why he was sentenced to five years' imprisonment was because the judge considered that he had to impose the minimum sentence required by section 51A because there were no exceptional circumstances in the case. The facts are very straightforward. The appellant Mr Rehman is aged 24. He was a collector of models. He purchased the replica firearm via a French internet site. He did so in his own name; he used his own credit card and had it delivered to his home address which he shares with his parents. He intended to display it. He decided not to. He put it into a box under his bed and left it there. It was there when the police arrived on 5 November 2004. They had obtained a search warrant because they had information that Mr Rehman had ordered the firearm in question over the internet. Mr Rehman was clearly very easy to trace. He showed them where the gun was. He told the officers that he did not think it was illegal to own the gun. That is no defence, but it is very relevant when considering whether there are exceptional circumstances. In this case it was not contested by the Crown that Mr Rehman had every reason to believe that the gun was not one which it was illegal to possess. When delivered, the gun came together with oil and a cleaning brush for its use. This presumably was because it can be converted. When interviewed, the appellant Mr Rehman said that he did not know that the gun could be converted. Mr Rehman had a positively good character. He has a degree from Imperial College. He was working for Customs and Excise. His training was continuing. The judge heard from a senior executive officer in whose team Mr Rehman was. Their view of him is demonstrated by the fact that, even when this matter came to light, they did not suspend him. It was only when he was sentenced by the court that he lost his employment with them. Mr Spence, the officer concerned, was totally amazed that Mr Rehman was in this position. He had created a most favourable impression on those with whom he had come into contact. It will be seen from Judge Joseph's sentencing remarks that, although counsel sought to argue exceptional circumstances on Mr Rehman's behalf, the judge was unable to conclude that they existed here. However, as the matter was advanced before the judge, reliance was not placed upon all the matters that could be urged upon his behalf because counsel took the view that certain of the circumstances were irrelevant. As we have already indicated, we consider that this approach was not the correct one, although that may not have been clear from the authorities which now exist in relation to the interpretation of section 51A in particular, which from time to time tend to focus on a particular circumstance rather than the circumstances as a whole. Gary Wood Gary Wood is aged 41. He is also of extremely good character. He was sentenced to a total of five years' imprisonment in respect of nine counts. Counts 1 and 2 charged possession of a prohibited weapon, contrary to section 5(1)(b) of the Firearms Act 1968. Count 1 concerned a blank firing pistol and count 2 another pistol. He was sentenced to concurrent terms of five years' imprisonment on those counts because the judge was wrongly under the impression that they were counts to which section 51 applied. In fact that section does not apply to those counts, though the judge can be forgiven for making the mistake that he did, bearing in mind that counsel who appeared before him acted on the assumption that the section did apply. Counts 3, 4, 5 and 6 charged possessing a firearm without a certificate, contrary to section 1(1)(a) of the Firearms Act. In relation to that offences the appellant Mr Wood was sentenced to concurrent terms of twelve months' imprisonment. There is no appeal in regard to those sentences. Count 8 charged the shortening of a shotgun, contrary to section 4(1) of the Firearms Act. Again he received concurrent terms of twelve months' imprisonment. Count 9 was the offence to which section 5(1)(aba) of the Firearms Act applied. The firearm of which he was in possession was a single barrelled hammerless shotgun with a barrel less than 30 centimetres long. He was sentenced to five years' imprisonment in respect of that offence, that sentence to be concurrent with the sentence in respect of the first two counts. Finally, count 10 charged theft. In respect of that the sentence was one of eighteen months' imprisonment concurrent. In relation to counts 1 and 2, as the judge was under the misapprehension to which we have referred, it is necessary for us to impose the appropriate sentence which would have been imposed but for the judge's error. We consider that the appropriate sentence is twelve months' imprisonment. That appears to have been the sentence which the judge would have had in mind if he had not thought that the minimum term was the appropriate sentence. We therefore quash the sentences of five years' imprisonment and substitute sentences of twelve months' imprisonment. The facts in relation to Mr Wood's offences are as follows. As a result of an investigation conducted into a company which was selling imitation firearms over the internet, on 30 September 2004 the police went to Mr Wood's home. He was arrested and interviewed. During the course of the interview he indicated, as must have been apparent to the police, that he was a collector of weapons. There are photographs before this court which show the scale of his collection. It is true that most of the collection was secured in locked cabinets. But in the loft was the shotgun which had had its barrel shortened. Apparently it was a weapon that had been inherited by Mr Wood from his grandfather. Count 10 related to munitions. Those munitions had been stolen at the time when Mr Wood was acting as a cadet instructor. He said that he intended to return the munitions in due course as he attended other events involving the cadets, but apparently they had become obsolete and so this could not be achieved. Altogether it took two days to search the appellant's house. All the weapons had been broken down as far as possible for safety reasons. Mr Wood clearly had a very considerable knowledge of firearms of the sort that were found in his home. He had extremely impressive references. He was the manager of a surveillance company. He had carried out important work with Army cadets. He had provided help to the police. On one occasion he had confronted a violent criminal. Apart from these matters, he was a most responsible and impressive individual. It is necessary to pay particular attention to the remarks of Judge Fish when sentencing him. He said: "It is not suggested in this case (and I would not come to the conclusion) that there was any significant danger at all that you yourself would have used any of these items for criminal purposes, but that of course is only one part of the danger that the Act tries to prevent. The other danger of course you did bring about and that is by simply having them in your possession in circumstances in which it was at least possible -- perhaps not very likely, but at least possible -- that they could have fallen into the wrong hands .... The very fact that they were in existence in your possession and therefore available fulfils one of the requirements or one of the fears of the legislation and I have found it extremely difficult to understand how you, of all people, could have allowed yourself to get into that position with your very long association with firearms and with the glowing references that I have had the opportunity of reading and rereading and I have no doubt that, in your training exercises (the training that you do of young people and perhaps of older people with your work colleagues) you emphasise time and time again how important it is to treat these sort of weapons with the greatest of respect and care and not have them available in any circumstances at all where they could be misused and yet that is what you did." Thereafter, the judge went on to indicate that the law required him to pass a mandatory sentence of five years' imprisonment. He said: ".... I have had to think long and hard about whether or not the matters that have been drawn to my attention do in fact amount to exceptional circumstances. There is of course much mitigation, which is not quite the same as exceptional circumstances; you pleaded guilty at the earliest opportunity, you were co-operative and helpful with the police; I have read all the other confirmatory information that indicates that you have a responsible attitude towards behaviour. But I have regretfully come to the conclusion that I cannot find that there are exceptional circumstances relative to the offence, or indeed exceptional circumstances relevant to you yourself, exceptional being the emphasis, that enable me to avoid the inevitable consequences of the legislation." The judge went on to impose the sentences to which we have referred, including those in respect of counts 1 and 2, in relation to which we have already allowed this appeal. Conclusions Against that background we turn to see whether the sentence in the case of Mr Rehman in respect of one count is a sentence with which this court can and should interfere. In approaching that matter we are greatly assisted by the careful and helpful arguments advanced by Miss Bennett-Jenkins for the Crown. She was somewhat embarrassed by her late instructions in this matter, but she provided a most useful skeleton argument which she has supplemented. Both in regard to Mr Rehman, with whom the court is dealing at the moment, and Mr Wood, she accepted that, in properly applying the authorities which now exist in this area in regard to section 51A in particular and to mandatory terms of imprisonment, subject to exceptional circumstances, these are cases where, looking at the circumstances as a whole, it would be proper to come to the conclusion that there exited exceptional circumstances which justified not imposing the minimum term. She says that this was a judgment to which the trial judge could properly come. On the facts of Mr Rehman's case, which we have already set out, we have decided that the judge was wrong not to conclude that the case was one involving exceptional circumstances. The background of Mr Rehman was particularly important; but so was the fact that he had no knowledge of the unlawfulness of the one weapon that he had in his possession which contravened the provisions of section 5 of the Firearms Act and therefore resulted in the application of section 51A. It is perhaps not the clearest case because it is not possible to identify one particular circumstance, but looking at all the matters that were relied upon by counsel who appeared for him in the court below and by counsel who appears for him today it falls on the right side of the line. Those matters are set out in the skeleton argument at paragraph 13 as follows: "(1) he pleaded guilty at the first opportunity; (2) he was a man aged 24 of hitherto good character; (3) he and his family were entirely co-operative throughout the search and arrest procedure. (4) he was an employee of HM Customs and Excise working as a VAT Assurance Officer, in which capacity he was a valued employee -- as is evidenced by the reference supplied and evidence given by his line manager, David Spence, and by the fact that he was not suspended or dismissed from his post after details of his arrest became known (though he has since been dismissed from his employment after commencing his custodial sentence); (5) It was common ground between the Crown and the appellant that: (a) the weapon was a blank firing replica purchased from France via the internet on or about 3 December 2003; (b) it had not been converted, and no blank ammunition was found with it or had been purchased or otherwise acquired by the appellant; (c) the weapon had not apparently been fired prior to its being tested following its seizure; (d) the weapon was found in its original wrapping under the appellant's bed, where he had placed it and kept it since he received it; (e) the police were led to the weapon via a search of the internet to identify persons who had purchased such weapons, and the appellant had evidently done nothing to disguise his identity as a purchaser. Consequently the police had obtained a search warrant under section 46 of the 1968 Act; (f) it was apparent from the contents of his room that the appellant was a collector of items of memorabilia, including other models. He had not known, until after his arrest, that possession of such a weapon was illegal, and he had been under the impression when he purchased it that it was only a collector's model. He had not put it on display with his other items of memorabilia but had kept it under his bed so that it was out of the way; (g) furthermore, the appellant was not aware that the replica weapon was capable of being converted until he was told so in the interview following his arrest. It was obvious from the fact that the replica weapon was accompanied by oil and a cleaning brush that it was more than merely a model; nevertheless, the appellant was not aware of its capacity for conversion." In our view the circumstances collectively make it possible to come to the conclusion that this is a case where the court was not required to impose the minimum term. We therefore have to decide what term would be appropriate in these circumstances. The appellant, Mr Rehman, has now served the equivalent of over twelve months' imprisonment. Suffice it to say that while we would regard a custodial sentence as necessary in this case so as to achieve the deterrent message that Parliament intended, a period of twelve months would have been sufficient. We therefore quash the sentence of five years' imprisonment and substitute a period of twelve months' imprisonment. That means he can now be released. We turn to the case of Mr Wood. We have given his case most anxious consideration, as did the judge who sentenced him. As we have already indicated, there is a great deal to be said in the appellant's favour. But having regard to his situation and his circumstances, we have reluctantly come to the conclusion that we would not be properly applying the statutory provision imposed by Parliament if we interfered with the sentence of five years' imprisonment which was imposed on count 9. As the trial judge indicated, he of all people should have understood that this was not the sort of weapon which should have been in his possession. He did not take the action which he should have done to check whether it was lawful to possess it. The fact that he had committed the other offences demonstrates that he did not attach sufficient significance to the very strict statutory provisions which apply to the possession of firearms. The other offences are not ones to which section 51A applied. But they showed on his part a carelessness with regard to the possession of firearms which prevents us treating the circumstances as exceptional. Accordingly, in relation to count 9 of the indictment to which he pleaded guilty, we have come to the conclusion that the sentence of five years' imprisonment must remain. Accordingly, the appeal will be dismissed with regard to count 9. The overall sentence that he will have to serve is one of five years' imprisonment. We are grateful for the assistance that we have received. Mr Farrell, what happens now with regard to your incomputably argument? MR FARRELL: My Lord, may I be permitted a short period of time to consider the judgment? THE LORD CHIEF JUSTICE: Over the luncheon adjournment? MR FARRELL: Yes, that probably will be sufficient. THE LORD CHIEF JUSTICE: Yes, we will meet again at two o'clock. MR HARDY: My Lord, may I mention this? Since leave was granted I have had the benefit of instructions from the Registrar. Prior to it being granted, Mr Rehman did not benefit from a certificate for public funding. THE LORD CHIEF JUSTICE: Your certificate may be enlarged. MR HARDY: I am very grateful. Would your Lordship instead make an order for a defendant's costs out of central funds up until the Registrar assumed command? THE LORD CHIEF JUSTICE: If that is preferable, so be it. MR HARDY: If I may, my Lord. I am grateful. THE LORD CHIEF JUSTICE: Yes, so be it. (Luncheon adjournment) MR FARRELL: My Lord, can I thank you for the time we have been allowed? We have discussed the matter over lunch and we have decided that we do not wish to take the matter of compatibility any further given the way that you have interpreted "exceptional circumstances". I have not, of course, had a chance to speak to my client about this, but, whatever his instructions, I certainly take that view as a matter of law. THE LORD CHIEF JUSTICE: Thank you very much indeed. MR FARRELL: Thank you.

Monday, 17th December 2001 LORD JUSTICE THORPE: On 12th October His Honour Judge Briggs, sitting in the Middlesborough County Court, gave judgment at the end of a three-day hearing to determine the future of three little boys. They are, respectively, N, L and B, who are four and a half, two and a half and nine months of age. They are the children of P.S. and E.O. Those two commenced a relationship when P was only 15 years of age. Accordingly she was only 16 when N was born. Even now she is only 21 and he is only 25. They never cohabited, perhaps in part because E.O. was generally in prison for either offences of dishonesty or drug-related offences. He was certainly in prison for about two years between 1996 and 1998 and again between June 1999 and June 2000. The final sentence of which we have knowledge commenced on 23rd April 2001 and ended in late July. The outstanding feature of the relationship between the young couple has been the violence inflicted on the mother by the father. Certainly as long ago as the middle of 1998, during the course of a fight between them, the mother's hand was cut severely, severing a tendon, and there have been many instances when she has been seen with either facial bruising or cuts to the face, which she has initially explained with some spurious account of accident leading to an eventual admission that the father was responsible for her injuries. Of course all this has had its repercussion in the field of child protection, and on 10th March 2000 N and L were entered on the Child Protection Register under the category of neglect. Application for care orders in respect of those two children followed on 13th October 2000, and a separate application in respect of B was issued within days of his birth. The mother sought refuge in Bishop Auckland Women's Refuge in September 2000, but was expelled in April 2001 as a result of her night absences without leave. At that stage the children were removed from her and put into foster placements, initially all three in separate houses, although by 11th June N and L were within the same family. It seems, although there is no certain evidence, that the father left the north-east to take up employment in Portsmouth some time after his release from prison in July 2001. However it seems that he regularly returns to his roots at the weekends. Another recent event has been an application in the Middlesborough County Court, presumably under the Family Law Act 1996, for an injunction against violent assault. That application was referred to an on notice hearing, which the father did not attend, and an order was made, effective until March 2002, supported with a power of arrest. When the case came on before the judge in October the mother was represented, as was the applicant local authority and the guardian ad litem. The father was not before the court since his application to be joined had been refused on 3rd July 2001. Miss De Haas QC, who has argued the mother's case in this court today, tells us with authority - because she leads Miss Tyler who represented the mother in the court below - that an adjournment was sought to enable the mother to obtain further assessment of her capacity to provide safely for the children's future and, no doubt, to give her further time to distance herself from her violent past. That application failed. Thereafter, Miss De Haas says that one alternative urged on the judge was to direct concurrent planning so that the local authority would be free to pursue the option of adoption at the same time as the assessments of the mother were under way. By that route, at an adjourned hearing, the judge would have been able to determine the children's future without the price of yet further delay if the mother's bid for responsibility failed. One possible criticism of the judgment is that there is no reference at all to that as an option considered and rejected. Indeed, what the judge says about delay seems to foretell his relatively draconian orders since he postulates that any acceptance of the mother's plea for further assessment would lead to delay upon delay - six months for the experts and then perhaps another six months whilst the case waited for a place in the county court lists. Of course, if the judge had been minded to accept a submission of concurrent planning, he could have ordered a fixture then and there to ensure that there would have been no delay at all beyond the completion of the assessments. Miss De Haas filed a skeleton argument in support of an application for permission, which was received on 26th November and led to my order of the 9th December saying that there should be a hearing on notice today, with appeal to follow if permission granted and a time estimate of half to one day. That chronology demonstrates how quickly the system operates in public law cases where there is any possibility that the judge might have arrived at an unsustainable conclusion against a natural mother. Certainly the points taken in Miss De Haas's skeleton merited a review by this court, and certainly the application for permission deserves to succeed. Miss De Haas has further distilled her written submissions by reducing her case today into five clear propositions that: (1) the evidence demonstrates, and the judge found, that there was strong bonding between this mother and certainly the two older boys; (2)she had demonstrated the capacity to provide good enough parenting; (3)she had demonstrated a clear change in attitude in relation to the violence of the past and her understanding that it was extremely harmful to children; (4)the evidence demonstrated that the dangerous relationship between the mother and E.O. had terminated; and (5)there were effective measures in place to protect the mother. The first step had been the injunction granted in the county court, and there was no evidence of any breach or attempted breach and there were obviously remedies beyond the injunction, should that prove necessary. On those five foundations Miss De Haas has submitted that the judge was plainly wrong to have granted a care order there and then approving a care plan for adoption and giving the local authority leave to terminate contact. Before examining the judgment, it is, in my opinion, highly relevant to record the developments of the last few weeks. The local authority have not exercised their power to terminate contact. They have merely reduced the pre-trial arrangement for three visits a week to two weekly visits. Between the judgment in the court below and today there have been fifteen possible meetings only nine of which the mother has attended. Of the remainder there have been at least five missed, three with due notice but two without. Significantly, the tally of failure is all during the most recent period. The five failures have been respectively on 11th and 26th October, but the record in the first half of December shows failure on 5th, 10th and 12th. It is true that on 5th December there was advance notice, but there was no notice at all on 10th December; and even on 12th December there was very late notice, only 15 minutes before the foster parents were due to leave home. This, of course, is not in itself decisive or fatal to the mother's case, but it does raise anxiety as to the extent of her responsibility and commitment, and it does seem in a way to justify some of the anxieties held by the trial judge. Turning to his judgment, he clearly accepted that the mother had a strong bond with the children. He equally accepted the evidence of the one professional who had, shortly before trial, swung from supporting the local authority's case to supporting the mother's cause. That individual was Fiona Nichol, who was a social worker of eighteen years qualification, the last nine of which she had spent at the refuge. She was a witness who clearly gained the judge's respect, for he described her as being not only very experienced but also an impressive witness. Certainly she spoke favourably of the mother, both in relation to her parenting capacity and also as to her change in attitude and perhaps the growth of understanding and responsibility in relation to child protection issues. But an element of her evidence that is, in my opinion, extremely damaging to the mother's cause is the evidence that she gave in relation to the termination of the dangerous relationship between the mother and EO. Let it be remembered that Miss Nichol was the one professional most inclined to be supportive of the mother and to speak for her wherever she properly could. The judge heard her on this issue (see at page 262 of the transcript) when asked to comment during her cross-examination on a file note taken by the social worker of a conversation that the two ladies had had on 11th September. The note reads thus: "P had attended a wedding reception in Shildon on Saturday the 25th August. Fiona feels P is still seeing E, but has no proof. E is ringing her at the refuge." The cross-examiner having referred to that file note said, "Is that right?" Miss Nichol might have said, "Good heavens, that is not what I said. Nor is that what I think." But she did not. She said, "Well, I think P herself would." Then, after referring to the wedding, she said, "P has admitted that she had, up to that point, been phoned, but was adamant that she had not seen him", All that she said on the following page was simply a recital of the mother's case. So I am left with the clear impression that Mrs Nichol was by no means satisfied that this dangerous relationship had terminated. As the guardian in her evidence emphasised, the mere taking of an injunction was in itself equivocal. It could indicate a mother who had come to realise the need to invoke the powers of the court to protect herself, or it could, in the alternative, be a bit of window-dressing in preparation for a contested hearing. Of course, it was for the judge to make an assessment of where the reality lay. It is quite clear to me what his assessment was, for at paragraph 54 of his judgment he said: "[The mother] did go back and Fiona Nichol certainly, and she is an experienced lady, I thought an impressive witness, thinks there has been a change. Well, she knows the young lady and she is entitled to that view. I regret I cannot be so sanguine about it. I think there are very considerable difficulties here. Violence has been concealed on a regular basis and I do not propose to deal with that again. There have been two previous serious assaults. I am satisfied that they are still in contact and indeed according to Fiona Nichol it was her view and I think a perfectly correct and justified one. There was certainly at least telephone contact during the course of her time at the hostel and, as I understand it, afterwards." That was really the key to the future. If the judge had been satisfied that the relationship was truly at an end, then he could look at the violence as being historic and its effect upon the children only the embedded effect. But if he saw this relationship as being concealed beneath a surface of litigation presentation and likely to re-erupt once the pressure of the case had terminated, then obviously it was his responsibility to intervene for the protection of the children. In my view the appeal is as simple as that. The judge reached a conclusion on the evidence with which we are not entitled to interfere. I have considerable sympathy for this young mother, who has been asked to bear very great responsibilities from a very young age. She is a low scorer in IQ terms, and it is for her a tragedy that things have ended in this way. But the responsibility of the judge is to the welfare of the children as the paramount consideration and, despite all Ms De Haas's very skilful efforts, I am very far from persuaded that the judge was plainly wrong. Indeed, I am quite satisfied that the conclusion which he reached was within the discretionary ambit and I would dismiss the application. LORD JUSTICE LAWS: I agree entirely. MR JUSTICE MORLAND: I agree. Order: Application dismissed. Public funding assessment of the Applicant's costs and the guardian's costs.

Peter Smith J : INTRODUCTION This judgment arises out of the hearing of the Claim Form issued by the Claimant in this action. The Claimant ("RSPCA") is the residuary legatee under the will of George Mason (Deceased) dated 19th January 2005. He died on 18th June 2007 and the First and Second Defendants were appointed his executors. At the end of the hearing I indicated that the application for construction of the will in the terms put forward by the RSPCA was to be dismissed and that I would give reasons for that dismissal in writing. THE WILL By his will after revoking all previous wills and testamentary dispositions he appointed Mr & Mrs Sharp to be his Executors and Trustees. The clauses of the will which are relevant for the purpose of the dispute are clauses 3-6 which I set out below:- "3. I GIVE the amount which at my death equals the maximum which I can give to them by this my Will without Inheritance Tax becoming payable in respect of this gift: (a) as to seventy-eight percent (78%) to the said NORMAN JAMES SHARP and PATRICIA DAPHNE SHARP as shall survive me and if more than one in equal shares absolutely (b) as to twenty-two percent (22%) to JOHN EDWARD MASON of 4 Jervis Avenue Freezywater EN3 6LT absolutely 4. I GIVE my property situate and known as 39 Malvern Road Gosport in Hampshire PO12 3LH to the said NORMAN JAMES SHARP and PATRICIA DAPHNE SHARP as shall survive me and if more than one jointly and equally absolutely and I direct that the Inheritance Tax (if any) payable on my death in respect of the property and all costs of the registration of the said NORMAN JAMES SHARP and PATRICIA DAPHNE SHARP as proprietors thereof shall be payable out of my residuary estate. 5. SUBJECT TO the payment of my just debts funeral and testamentary expenses and the legacies given by this my Will or any Codicil hereto I GIVE DEVISE AND BEQUEATH the residue of my estate of whatsoever nature and wheresoever situate (which said estate and property and the property for the time being representing the same and herein referred to as "my residuary estate") unto my trustees upon trust to sell the same or any part thereof or to retain the same or any part thereof in its actual state of investment or condition at the time of my death. 6. MY TRUSTEES shall stand possessed of my residuary estate upon trust for the Royal Society for the Prevention of Cruelty to Animals of Causeway Horsham West Sussex RH12 1HG for its general purposes and I direct that the receipt of the secretary treasurer or other proper officer shall be a sufficient discharge to my trustees." The Deceased and Mr Sharp met in the Merchant Marine in the Second World War and became lifelong friends. Mrs Sharp also became a lifelong friend at a later stage. The Third Defendant John Edward Mason is the Deceased's brother and sole surviving relative. SIZE OF THE ESTATE The deceased had £771,178 standing in Bank and Building Society accounts and £12,832 in cash. In addition he owned the property ("the Property") 39 Malvern Road Gosport Hampshire the subject of the devise in clause 4 of the will. That was valued at £169,000 for probate purposes. ADMINISTRATION BY THE DEFENDANTS The First and Second Defendants administered the estate on the basis that the gift in clause 3 amounted to £300,000 (the nil rate band prevailing at the time) and the Property worth £169,000 passed to the First and Second Defendants. That left residue of £482,820.20 for the Claimant subject to inheritance tax ("IHT") of £112,667. That analysis resulted in a residuary legacy to the RSPCA of £370,153. It gave a pecuniary legacy under clause 3 to the First and Second Defendants of £234,000 a pecuniary legacy to the Third Defendant of £66,000 and the Property to the First and Second Defendants (under clause 4) of £169,000. The Claimant does not accept that that is the correct construction of the will. CLAIMANT'S CONTENTIONS The Claimant's case is that the way in which the Defendants have construed the gift in clause 3 is clearly wrong. It was submitted on its behalf that the gift in clause 3 can only comprise the balance of the unused nil rate band for IHT (if any) at the date of the Deceased's death and in order to ascertain that the gift in clause 4 has to be taken into account. This construction means that the first £169,000 of the nil rate band was to be applied to clause 4. This meant that the balance of the nil rate band was only available for the legacy under clause 3. This meant that the legacy in clause 3 is subject to reduction depending on the value of the Property in clause 4 as at the date of the death. It was accepted by Ms Reed QC who appears for the RSPCA that any increase in the value of the Property between the date of the will and the death would pro rata reduce the amount passing under clause 3. Once the value of the property reached the nil rate band level there would be no legacy passing under clause 3. The effect of this is that at least until the value of the property exceeds the nil rate band the estate as a whole will not pay any IHT. The result of the argument is that the amount of IHT payable on the present figures will be reduced from £112,667 to nil. The competing figures are set out in the schedule below:-   Per Defendants Per Claimant   £ £ D1, D2 – clause 3 234,000 102,180 D1, D2 – clause 4 169,000 169,000 D3 66,000 28,820 C 370,153 651,820 HMRC 112,667 NIL Total £ 951,820 £ 951,820 It was submitted on the behalf of the Claimant the Deceased would desire to achieve this because this is the most tax efficient way of construing the will and thereby minimising tax. It is important not to overlook however in my view 2 further results. First it meant that by applying the nil rate band first to the devise under clause 4 the pecuniary legacy under clause 3 is correspondingly reduced. Whilst that saves tax as I have said (bearing in mind the fact that the RSPCA residuary devise will not pay any tax) the true "beneficiary" of this argument is the RSPCA which will see its residuary legacy rise from £370,153 to £651,820. This is entirely at the expense of the legatees under clause 3. It was said that this arises because the construction put forward by the Defendants (as set out above) ignores the basis on which IHT is chargeable on a person's death. Under section 4 (1) of the IHT Act 1984 it is provided that :- "on the death of any person tax shall be charged as if, immediately before his death, he made a transfer of value and the value transferred by it had been equal to the value of his estate immediately before his death. " It was submitted therefore that IHT is not charged on each gift but on the transfer of value deemed to be made by the Deceased. Consequently it is therefore submitted that in light of that the words "payable in respect of this gift" do not assist in construing the rest of clause 3. Consequentially clause 3 makes clear that the maximum amount which the Deceased could give at his death "by this my will" is the sum that could be paid under clause 3 without IHT being payable. It was therefore submitted that that required the other clauses of the will to be taken into account in seeing what gift could be made without any IHT being payable in respect of the gift in clause 3. Thus it is said regard has to be had to the gift of the Property in clause 4 which is chargeable to IHT. The key submission is apparently based on the words in clause 4 "if any". It was submitted that the words have no meaning at all if the Defendants' case is correct because if the nil rate band is fully applied to the legacy under clause 3 IHT will always be payable under clause 4. Thus it was submitted those key words suggest that clause 4 is taken into account first when applying the nil rate band. In my view this is to over complicate the will and is patently wrong. It seems to me to be clear that the Deceased had in mind 2 categories of people on whom he wished to confer his largesse. First there were his friends the Sharps and his brother (his sole surviving relative). Second he decided to make a large bequest to the RSPCA of the residue. He would be aware that any sum passing to the RSPCA would not be subject to IHT. It seems to me clear that the purpose of clause 3 was to bequeath a legacy of the amount that was the maximum amount without inheritance tax being payable. The draftsman intended by the description to cover the possibility that the nil rate band might increase between the date of the will and the death. In other words it was intended that this legacy would be free of tax and would be an amount equal to the nil rate band at the time of the death of the Deceased. The draftsman therefore anticipated increases by his wording. Equally he contemplated by the devise in clause 4 to ensure that the Property passed to his friends the Sharps free of any tax. It seems to me clear that he anticipated that tax was likely to be payable and if it was then it would fall on the residue clause in favour of the RSPCA. That too in my view reflects a clear contemplation that his family and friends were to take the legacy and the Property free of tax and the RSPCA would take the balance but subject to any tax payable arising out of the fact that the bequest and the devise might give rise to an incident of tax. The RSPCA's argument (as long as the Property is worth less than the nil rate band) ignores the plain fact that the Deceased contemplated IHT would be payable under clause 4. However its argument will ensure no IHT will be payable by using the nil rate band. This boosts the residuary legatee at the expense of the clause 3 legatees. This seems to be perfectly logical. I do not accept that the intention of the Deceased was necessarily to organise his affairs so as to ensure no IHT was payable. This is illustrated by an example I put to Ms Reed QC in argument. If the Property went up in value to £300,000 she accepted on her arguments that it would use the entirety of the nil rate band. She equally accepted that the result would be that no monies at all would pass under the legacy because there would be no nil rate band left to convert into a legacy. I ask myself whether or not the Deceased when being told that his will had this effect would have expected that a rise in the value of the Property (despite the direction that any inheritance tax would be payable out of the residuary bequest to the RSPCA) would in effect mean that the legacy in favour of his friends under clause 3 and his brother under clause 3 would be abated to zero merely because the Property had increased in value. The result of that exercise of course would mean that ultimately his brother would receive absolutely nothing. I cannot believe that that is what the Deceased intended. It is so unlikely as to be incredible. Further it is not logical and gives undue violence to the simple straightforward wording of clauses 3 and 4. The former plainly intended to address any rises in the nil rate band and give a legacy of the appropriate amount. That was intended to be tax free. Clause 4 was equally intended to pass the Property to Mr & Mrs Sharp free of tax. However the clause did not say the nil rate band would be applied to that. It contemplated that any IHT thereby arising would be payable out of the residuary legacy in favour of the RSPCA. The words "if any" are merely to address the possibility that future events (however unlikely) might change the law of applying IHT so that in some way the Property might become exempt or subject to a reduced rate. I do not see it has any other significance whatsoever. The clear intent under clause 4 in my view was that it was not to have applied to it the nil rate band but was subject to IHT (subject to that possible change in the future) and the whole of the nil rate band was to be utilised to give a legacy under clause 3. That does not do violence to the principle of inheritance tax and its application as set out in section 4 IHTA 1984. The purpose of that provision is simply to make the incidence of IHT apply to the whole estate. It is perfectly possible for a Testator by his will to alter the incidence of tax as between the various constituent parts of the will. That of course does not bind HMRC who can levy tax against all of the assets. Sometimes of course the wishes of the Testator as to the incidence of debt might be affected by the size of his estate. In that eventuality of course the provisions of section 34(3) of the Administration of Estates Act 1925 will be applied. The final point in favour of the Defendants in my view is the general direction under clause 5 to pay all the debts funeral and testamentary expenses and the legacies given by the will out of the residuary estate. I agree with the Defendants that as regards IHT that would be otiose because on the Claimant's argument the residuary estate in favour of the RSPCA would not be subject to any IHT unless IHT was chargeable on the residuary estate in respect of other dispositions under the will. This too in my view shows a straightforward and simple approach again that the bequest and devise under clauses 3 and 4 were intended to be tax free. In addition in my view the purported clause 3 is also intended to make the legacy under that clause free of tax to the maximum extent by creating a legacy up to the nil rate band limit. CONCLUSION I therefore do not accede to the RSPCA's application and construe the will as contended for by the Defendants. It is a matter of regret in my view that this action was ever brought. It clearly caused great distress to the Defendants and I cannot believe the Deceased would have been happy to see arguments by the RSPCA designed to erode the largesse in favour of his friends and relative to their benefit in this way. It is true that IHT is payable according to the Defendants' contentions (but not out of their share) when none is payable according to the RSPCA'a argument. However that fact cannot conceal that the whole purpose and thrust of the RSPCA's argument is to raise its interest under the will by nearly 75%. I know it is said that Trustees of charitable organisations are required to maximise the return for their charity but I really wonder whether the discharge of that duty required this action to be brought. In my view the RSPCA whatever the view as to the will ought really to have considered that the residuary legacy that I have determined it is entitled to was generous and ample provision out of this estate. The impact of the arguments on the size of the bequest to the Deceased's brother was quite stark. This action has plainly caused distress to the Defendants and in my view ought not to have been brought.

Wednesday 15 May 2002 LORD JUSTICE DYSON: This is a renewed application for permission to apply for judicial review following the refusal by Hooper J of 7 November 2001 to grant Mrs Baker permission to apply for judicial review of a decision by the Devon and Cornwall Constabulary, to which I shall come in a moment. First it is necessary to paint a little of the background. Mrs Baker's father died in 1960, leaving everything to his wife in a trust fund for their children, one of the beneficiaries, therefore, being Mrs Baker. A Coventry solicitor named Newsome had been appointed an executor of Mrs Baker's father's will. She says that the family was told that because her father's estate was insolvent or bankrupt, his assets had to be sold. Mrs Baker's mother died in 1995 and Mrs Baker received her share of the money which had been held on trust, namely £7,000. It was at about that time that Mrs Baker decided to act on suspicions that she entertained as to how her father's estate had been dealt with by Newsome. In particular she was concerned that on her father's death there had been no trace of signed codicils which her father had wanted to be appended to his will, and a hotel owned by the Palm Beach Hotel (Falmouth) Limited, of which her father had been managing director, had not been properly dealt with on his death. As a result of these concerns she contacted the Essex Fraud Squad to complain about the way in which her late father's estate had been dealt with by Newsome. This complaint was referred to the West Midlands Fraud Squad. They investigated the matter and wrote to Mrs Baker in June 1998 saying that her allegations were of a civil nature and that their investigation into the matter was now closed. Mrs Baker was not satisfied with this response and wrote to the Chief Constable of the Devon and Cornwall Constabulary. As a result of this, further enquiries into Mrs Baker's complaint were made and in September 1998 a letter was sent to Mrs Baker stating that there was no evidence of criminality for the Devon and Cornwall Constabulary to investigate. Mrs Baker has since sent further letters to the Devon and Cornwall Constabulary. There have also been letters sent to the Devon and Cornwall Constabulary on this matter by Mrs Baker's local MP, and I am told that other senior members of the Government, and indeed the Prime Minster's wife, have been involved, or at any rate shown a real interest, in her case. On 31 August 1999 the Deputy Chief Constable wrote to the MP, Mr Bernard Jenkin, stating that Mrs Baker's allegations had been investigated and that there was no evidence that any criminal offences had been committed. On 12 January 2001 Detective Chief Superintendent Pyke of the Devon and Cornwall Constabulary wrote to Mr Jenkin affirming the position of the Police Authority. That letter concludes in the following way: "Mrs Baker has been contacted on numerous occasions and informed accordingly but appears unwilling to accept there is no justification for any further police enquiries into her allegations. At present the investigation into the allegations of theft made by Mrs Baker is closed. As previously stated the CPS and Force Legal Advisor concur the complaint is not of a criminal nature. I hope that this letter answers your queries and re-affirms the position of the Devon and Cornwall Constabulary in this matter." It was this letter which prompted Mrs Baker on 23 July 2001 to bring her claim for judicial review. She alleged that the letter contained "multiple evasions and fabrications" and that her Convention rights created by the Human Rights Act 1998 had been infringed in the way in which her complaint had been handled by the police. Her challenge was, as is clear from the form 86A, to the decision said to have been contained in the letter of 12 January 2001. The essential basis of her challenge is that there was a strong prima facie case that criminal offences had been committed and that the Devon and Cornwall Police Authority should not have concluded that there was no evidence of criminality to investigate. The matter has been put even more forcefully this afternoon by Mr Remington-Hickes, Mrs Baker's McKenzie Friend. He does not mince his words and says in terms that it is Mrs Baker's case that when the Authority asserts that the allegations have been investigated, that is untrue. It is said that there has been no investigation of the allegations and that the reason for that is because something in the nature of a cover-up has been going on in this case. Following an oral hearing of her application for permission on 7 November 2001, Hooper J refused her application, stating that the letter of 12 January did not contain any decision and in any event that he had no jurisdiction to decide whether the Police Authority was or was not right to conclude that there was no evidence of criminality. Mrs Baker now renews her application for permission to apply for judicial review. One thing is clear about this case. The strength of feeling borne by Mrs Baker and indeed by Mr Remington-Hickes is palpable. It is quite plain that she feels a real sense of grievance and that she cannot accept that the Police Authority, if it has indeed carried out any sort of investigation, was justified in reaching the conclusion that there was no evidence that any criminal offences have been committed. I regret to say that, in my judgment, her application must be rejected. I reject it for the following reasons. First of all, the decision not to investigate her complaint further was taken in September 1998, almost three years before she launched these judicial review proceedings. It is simply not right to say that the decision of which she complains is contained in the letter of 12 January 2001. In my view it is now far too late to allow a judicial review challenge. The rules require the claim form to be filed promptly, and in any event not later than three months after the grounds to make the claim first arose. I refer to the Civil Procedure Rules Part 54.5(1). Secondly, I have not been persuaded, on the basis of the material that has been placed before me, either that no investigation has been carried out at all, or that it was not reasonably open to the Authority to conclude that there was no prima facie evidence of criminality. It is not sufficient for an applicant simply to assert that something stated by a respondent is false. That is not sufficient to raise an arguable case that the statement, that the allegations have been investigated and that there is no evidence that any criminal offences have been committed, is false. More is required in the way of evidence before a court exercising judicial review jurisdiction will consider the next question, which is whether such a conclusion is unlawful on one of the grounds well established by English public law. Thirdly, although much has been made both in the papers and, indeed, in oral argument this afternoon about the Human Rights Act, I am afraid that I cannot see that the decision not to investigate because of lack of evidence raises any arguable violation of any Convention right. Mr Remington-Hickes has referred to Article 6 and there has been some reference to a right to be heard. But that only arises either where a party is facing criminal proceedings -- and that is not this case -- or where a party's civil rights are engaged, such as to justify the conclusion that that person has a right to an oral hearing by some impartial tribunal. But it seems to me that none of that has any application here. What is happening in this case is that Mrs Baker, undoubtedly as an interested party, is aggrieved by the decision taken by the Police Authority not to investigate further the question whether criminal offences have been committed. So for those three reasons, any one of which would be fatal to this application, I am afraid that I do not consider that this is a case in which it would be right to grant permission to apply for judicial review. It may be that there are other avenues available to Mrs Baker, either civil proceedings against Mr Newsome, possibly, or, alternatively, seeking to use such political influence as is available to her. But on the material that has been placed before me, I am afraid this is not a case for judicial review. ORDER: Application refused

Mrs Justice Elisabeth Laing DBE : Introduction On the evening of Friday 31 July 2015, my clerk was approached by the solicitor for the Applicants ('As'). He wished to make an urgent application for an injunction to restrain publication in a newspaper of material relating to the first Applicant ('A1'). That evening, my clerk received a skeleton argument from the Respondent ('R'). I held a telephone hearing on the afternoon of Saturday 1 August at which the As and R were represented by leading counsel (Mr Tomlinson QC and Mr Browne QC). I said that I would hold the hearing in private, and make an anonymity order, given the issues in the case. Mr Tomlinson QC gave an undertaking to ensure that a record of the hearing was kept. I had witness statements from both sides. I had skeleton arguments by that stage from both counsel. At the end of that hearing, I said that I had decided to give the relief sought by the As. I gave brief reasons for doing that, and said that I would write a short judgment explaining those reasons in more detail. One of R's witness statements did not reach me in time for the hearing. Mr Browne QC referred to some of the material in it in the course of his oral submissions. I should make clear that although I did not see that evidence at the time of the hearing, I have consulted it in order to deal in this judgment with the points which Mr Browne QC derived from it in his oral submissions. The relief I granted was for a short period only, until Wednesday 5 August 2015, when both leading counsel would be available to argue more fully in court whether interim relief should be granted in this case or not. This judgment Counsel agreed that this should be a public judgment. Because I had also decided to grant the As' application for anonymity (a subject to which I shall return), they agreed that I should ensure that the judgment was not expressed in terms which might enable an astute reader to join up the dots. I have tried to strike a balance in this judgment which ensures that my reasons for granting the order are intelligible, without saying so much about the facts that it is possible for the reader of this judgment to undo the work of the order. This means that what I say about the facts is, necessarily, expressed in relatively general terms. I should therefore make clear that while my description of the facts is necessarily short on detail, I have, in making my decision, nonetheless considered the nuances of the facts which were relied on by each side. I cannot, however, show that I have done so in this judgment. Any reader of this judgment will thus have to take that on trust. Except to a limited extent, counsel did not disagree about the framework in which I had to make this decision. I will not, therefore, in what is intended to be a brief judgment, explaining my reasons for giving what is intended to be a short-lived order, cite extensively from authority for points which were not controversial. I did not think it would be useful, either, to engage, in this judgment, in the artificial exercise of analysing the authorities in greater depth than the parties did in their skeleton arguments. There are two reasons. The first is that such an analysis did not inform the decision I made after the hearing on Saturday. The second is that the judge who conducts the hearing on Wednesday 5 August 2015 will have a greater opportunity than I did to listen to detailed arguments about the authorities. That means that it would not be proportionate for me to analyse them in any depth, even if, which I do not, I considered that it would be appropriate. A general outline of the facts A1 is a prominent and successful professional sportsman, who has, from time to time held positions of responsibility in his sport. He appears in advertisements for some products. He is now married to A2. He seeks to restrain a national newspaper from publishing a story, to be recounted by X, about a sexual relationship between them. It is common ground that the relationship was some years ago and lasted a few months. At the time of this relationship, he was not married to A2, but she had been his girlfriend for a while. X says, and this has not been specifically denied by A1, that they met at times when he should have been preparing for sports events. She and R now criticise that conduct. Some material has been published about X and A1. There is a dispute about whether A2 has contributed to that. X now wishes to give her account in order to 'put the record straight'. R's evidence describes the proposed content of the article. It is considerably more detailed and concrete than what has been published so far. Its publication will no doubt cause embarrassment to A1 and A2. The law This is a case in which there is a conflict between rights conferred by the European Convention on Human Rights ('the ECHR') and set out in Schedule 1 to the Human Rights Act 1998 ('the 1998 Act'). The rights in issue are the article 8 rights of the As and the article 10 rights of R and of X. A conclusion about that conflict requires an intense focus on the facts. Neither right has precedence over the other. The protections conferred by both article 8 and article 10 rights are defeasible. One of the interests which may defeat the protection conferred by article 8 is the interest in protecting the rights and freedoms of others. One such interest is the exercise of the qualified freedom conferred by article 10. The exercise of the freedom conferred by article 10 'carries with it duties and responsibilities, [and] may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society ...for the protection of the reputation or rights of others [or] for preventing the disclosure of information received in confidence...'. That will include the interests which the As seek to protect by this application. Neither 'side' has a burden to discharge, as such; rather, each has to justify a desired interference with the other's Convention right or freedom. So I have to balance, in deciding what, if any, protection, or weight (as the case may be) the court should give to the article 8 and 10 rights/freedom of each side, the desire of the other to assert a defeasible right or freedom protected by a different article of the ECHR. In each case that right or freedom conflicts with the right or freedom on which the other relies. This means that, on the facts of this case, I have to examine closely the relative importance of the two rights which are in play. Section 12 of the HRA applied to this application. In short, the court may not grant relief unless an applicant is 'likely to establish that publication will not be allowed'. It was agreed by counsel that that is a variable standard depending on facts of case. In general, the court should be satisfied the applicant will probably, that is, is more likely than not to, succeed at trial. They agreed that a lesser degree of likelihood may suffice if the court is granting an injunction, where, as here, if granted, it will only last for a short period, pending more detailed argument. That, and the nature of the 'news' in this case mean, in my judgment, that I should give less weight than might otherwise be appropriate to the intrinsic evanescence of 'news', a point which Mr Browne QC relied on in his oral submissions. This is not a story, either, which has only just broken, or which is developing at a fast pace. Section 12 also requires me to take into account the importance of the ECHR 'right' of freedom of expression, and the extent to which the material has become, or is about to become available to the public. I must take into account any relevant privacy code. Mr Tomlinson QC referred me in argument to the relevant provisions of the code which applies. In my judgment, and on my analysis of the facts, it does not support publication of this story. Finally, I must take into account the extent to which it is, or would be in the public interest for the material to be published. On the authorities, that means the extent to which the material contributes to a debate of general interest. The rights which are in play I will start with the article 8 rights of A1 and A2. I should say that this is not because I have made the mistake of giving article 8 a primacy it does not have, but because I have to start somewhere. Mr Browne QC's oral submissions hinted that A2's article 8 rights were irrelevant, because X and R are not proposing to publish her private information. I reject the submission, if made, that A2's article 8 rights are irrelevant. Publication will interfere more than minimally with her right to respect for her home and family life, as her witness statement makes clear. I accept, however, that any likely interference with her article 8 rights is less serious than any likely interference with A1's article 8 rights, and so can more easily be justified. I have considered the conflicting evidence about the extent to which A1 and A2 conduct their lives in the public eye. Apart from the prominence which A1 has as a result of his job and product endorsements, I do not consider that the limited evidence relied on by R shows that, as a couple, they court publicity. Does A1 have a reasonable expectation of privacy? The authorities show that in order to rely on article 8 in support of an injunction restraining publication, A1 must first show that he had a reasonable expectation of privacy. If he did not, there could be no interference with his article 8 rights, and the question of justification would not arise. There is some suggestion in the authorities that a transient relationship is entitled to less protection than a permanent relationship. But I accept that material about a person's sexual life, whether it relates to a transient, or to a more durable relationship, is in principle protected by article 8, as a person's sex life is a very important aspect of the interests protected by article 8. R relied heavily on the submission that this relationship was at the transient end of a spectrum. But on the evidence I have read, this relationship at issue in this case was not a one-night stand, or an encounter with a prostitute, as X's witness statement makes clear. She says, 'We spent a considerable time together whilst in our relationship...', and that while she has had many affairs, she felt that this relationship was different. She thought that things between them 'could go further'. Despite finding out towards the end of the relationship that A1 was in a long-term relationship with A2, she felt that 'we had a chance of building something together'. When, after a while, it became clear that A1 was not serious about the relationship, and the relationship ended, she describes her upset. Even so, she says that she kept in contact with A1for a long time after the relationship ended. A further factor which I have taken into account, in addition to this important evidence about the duration and nature of the relationship, is the evidence of X that, from the outset, both of them conducted it clandestinely. From her evidence it is clear that it was her understanding that A1 did not want to get 'caught out', and that both needed to be careful to ensure that this did not happen. They kept an eye out for CCTV cameras, for example. Finally, although R's case is that X conducts her entire private life in public, that evidence only goes a limited distance. X has kept her counsel about this relationship for some time, and was discreet about when it was going on, even after she discovered that A1 had a long-term girlfriend, and even after the relationship ended. She kept in contact with A1, on her evidence, until quite recently, and did not any stage, until very recently, decide to make it public. It is against this evidence that I have to assess the weight I should give to R's submission that X is 'not a private person'. The submission is based on the fact that she has chosen to display in public aspects of her life which others might regard as normally private. Examples of this are given in R's evidence. This evidence is adduced in order to suggest that X is a shallow, one-dimensional, cut-out character who broadcasts, and is known to broadcast, her entire private life, so that anyone embarking on a relationship with her knowingly takes the risk that it will be made public. I do not accept that this is an accurate account of the evidence. X's own witness statement paints a more complicated picture. It shows, in my judgment, that she did not see this relationship, or treat it, as public property at the time, and for some time afterwards. She was discreet about it, and valued it. She did not apparently see it, or use it, as part of her public career. I also take into account the fact that successful sportsmen necessarily have a prominent position in public life, and because of that, and whether they like it or not, lose control over aspects of their private life. But I do not consider that being a public figure of and by itself makes the entire history of that person's sex life public property. R argued that A1's position of responsibility in his sport, and the fact that he is a prominent sportsman, make him (whether he wants it or not) into a 'role model' who can therefore expect to have his conduct, on and off the sports field, to be examined minutely and publicly. I consider these arguments in more detail when I come to justification under article 8.2. I do not think that, singly, or collectively, in this case, they undermine the reasonable expectation of privacy about this relationship which A1 had. At this stage, I only add that it is important to analyse what sort of a role model A1 is or can be. He is a role model for sportsmen and aspiring sportsmen. Any scrutiny of his conduct away from sport ought to bear a reasonable relationship with the fact that he is a sportsman. His position does not turn him into an example in every sphere of his existence. He is not a role model for cooks, or for moral philosophers. The fact that he is a prominent sportsman does not mean that he impliedly pontificates publicly about private morality. In my judgment, a discreetly conducted affair, before he was married, some years ago, is not obviously inconsistent with his public role, even if its conduct involved the breach of team rules. Publication of the proposed story will undoubtedly interfere with A1's reasonable expectation of privacy, and thus, with A1's article 8 rights. It will also interfere with A2's article 8 rights, for the reasons given in her witness statement. Justification This brings article 8.2 into play. I have to ask what justification is advanced for that interference. The justification is the desire of X and R to exercise their article 10 rights. While I have to take into account the importance of the freedom of the press, that freedom is not, self-evidently, of and by itself, enough to trump the As' article 8 rights. I cannot balance these two incommensurables without asking why, and for what purposes, X and R seek to exercise their article 10 rights. So I turn to that. R's reasons for publishing the information are, no doubt commercial. But I do not give this any weight, as the fact that most newspapers are run for profit does not deprive them of, or lessen the importance of, their article 10 freedom. R argues that there is an important public interest in publishing this story. I bear in mind both that newspaper editors should be given some leeway in judging where the public interest lies, and that, just because the public might well have a prurient interest in being told something does not mean that it is in the public interest for them to be told it. The public interest here is, I remind myself, a contribution to a debate in the general interest. The public interest arguments circled round the suggestion that this story shows that A1, who is, and should act as, a role model is, in reality, a hypocrite. First, it is said that there is a public interest in publishing the story because A1's conduct of the relationship meant that he broke rules on a few occasions in having a woman with him when he was staying at a hotel. He denies that his conduct led to the breach of any rules. I cannot resolve that conflict at this stage. But even if I assume that he did break any rules, I do not see that there is any public interest in revealing this now, some years after the event. Such stories may generate some interest at the time of the infraction, but I was shown no evidence to suggest that there is any current debate about past infractions by sportsmen of rules of this sort. Nor do I consider that the mere fact he broke rules in the past shows that he, is or should be publicly exposed as, a hypocrite. Second, R argues that, in having the relationship, A1 deceived both A2, and his then manager. A1 does not deny these deceits. A2 now knows the truth. His deceit of A2 is a private matter between them. I can see no public interest in the publication of the fact that some years ago, A1 deceived his then team manager in the way that X said he did. I was shown no material that suggested that there is debate in the general interest about this subject. Nor do I consider that an isolated past deception of a former team manager means that A1 is a hypocrite, or that there is a public interest in exposing him as one. R's third argument is that A1's success as a sportsman has given him the opportunity to earn money by appearing in advertisements. It is said that this is built on his image as a 'clean-living family man'. X's story is a valuable antidote to this false impression, it is said. The high point of the material relied on to show this false image is an interview which A1 gave, shortly after the end of the relationship with X, in which he said he liked to eat at home with his girlfriend. I reject the strained submission that any of the material relied on in this context shows that A1 has misled the public by creating and projecting a false image of himself. There is nothing misleading or untruthful, in my judgment, about any of this material. It is argued that the public interest extends to the exposure of conduct which is socially harmful, as well as conduct which is unlawful. I doubt whether a court is equipped to act as an arbiter of what conduct, falling short of illegality, is 'socially harmful' to the extent that it should be publicly exposed. The court is perhaps even less well-equipped to do this than a newspaper editor. A1's conduct in two-timing A2 for a relatively brief period before they married must have hurt the two women concerned when they found out about it. It is not for me to moralise about such conduct. But I do express a suitably diffident doubt whether this conduct was socially harmful. It caused private pain; but no-one was corrupted or co-erced. The conduct had no ramifications beyond the three people who were affected by it. It did not affect society in any way. If it did not, I cannot see how it could be described as socially harmful. I am conscious that there is a risk that the phrase 'socially harmful' can become a pretext for judging others by reference to moral positions which those others do not, or might not, share. This is a particular risk for a court in an increasingly secular society in which some issues, especially questions of sexual conduct, do not attract the consensus which they once did. In my judgment, few people, other than adherents to strict religious codes, could rationally consider that this conduct is so fundamentally inconsistent with being a role model of the kind which A1 is that there is a public interest in exposing it. I turn to X's position. She has disclosed the information, she says, because she was hurt by A1's 'hypocrisy about the whole situation'. That assertion is not further explained, and I do not understand it. It appears to be based on reasoning after the event, rather than on any reasoning which she could plausibly have engaged in at the time. It is inconsistent with her evidence that even after she found out about A1's relationship with A2, she continued the relationship with him for a time, and even after her relationship with A1 ended, she kept in touch with him, even to the extent of discussing that relationship with him after she disclosed the information. She says that she knows that A1 has lied to A2 about X's relationship with A1. The basis for that is material which I consider in the confidential annex to this judgment. For the reasons I give in that, I consider that that is a fragile basis for any justified sense of outrage on her part. Moreover, on any view, it happened after, not before, she disclosed the information. Conclusions I have analysed the facts at some length. I can state my conclusions briefly. The interference with the article 8 rights of A1 and A2 which is proposed by R and X is not a proportionate means of achieving a legitimate aim. I was referred by Mr Browne QC to McClaren v News Group Newspapers Limited [2012] EWHC 2466 (QB). I consider that that decision is distinguishable, on two main grounds. First, the Claimant in that case was married at the material time, and second, he had, in the past, sold a similar story about himself to a newspaper. I consider now the proposed exercise by R and X of the freedom conferred by article 10. I can also do this briefly, because the facts which are relevant to the two competing Convention rights are, in this case, the same. In the light of my conclusion about article 8, I consider that the grant of an order restraining publication of this material for a short period is a proportionate means of achieving a legitimate aim. I should deal with two further points here. First, R argued that the story is already in the public domain. I accept that, depending on the extent and content of any publication, that could mean that it would not be necessary or proportionate, for the purposes of protecting the article 8 rights of A1 and A2, for an injunction to be granted, even for a short time. I have compared the material which is already in the public domain (as summarised in R's witness statements) with the proposed story (also as described in R's evidence). In my judgment, there is a significant gap between what is now public and what would become public if the story were published. It is proportionate, in that situation, to restrain publication of that further material. I should also make clear that, in my judgment, the extent to which there is some material in the public domain is not great enough to mean that damages would be an adequate remedy. Second, the As applied for, and I granted, derogations from the principle of open justice. These too, in my judgment, are necessary and proportionate. They will last for a short period, when they can be reconsidered by the court. Without them, the purpose of the application would be defeated, as without them, the parties could be identified.

original jurisdiction writ petitions number. 144 227 and 228 of 1963. petition under art. 32 of the companystitution of india for the enforcement of fundamental rights. v. viswanatha sastri c. s. prakasa rao and r. gopala- krishnan for the petitioner in w. p. number 144/63 . v. viswanatha sastri g. a. pias t. n. sambasivan and s. mani for the petitioners in w. ps. number. 227 and 228 of 1963 . ranganadham chetty r. viswanathan and a. v. rangam for the respondents in w. p. number 144 of 1963 . ranganadham chetty and a. v. rangam for the respon- dents in w. p. number. 227 and 228 of 1963 . s. shukla for the interveners w. p. number 144 of 1963 . k. daphtary attorney-general n. s. bindra r. h. dhebar and b. r. g. k. achar for the attorney-general in p. number 144 of 1963 . r. l. iyengar r. h. dhebar and b. r. g. k. achar for the advocate-general gujarat in w. p. number 144/63 . k. daphtary attorney-general r. h. dhebar and b. r. k. achar for the advocate-general maharashtra in w. p. number 144/63 . n. sachthey and b. r. g. k. achar for the advocate- general rajasthan in w. p. number 144/63 . n shroff for the advocate-general madhya pradesh in p. number 144/64 . the judgment of the companyrt was delivered by subba rao. j. these three petitions filed under art. 32 of the companystitution raise the question of the companystitutional validity of the land acquisition madras amendment act 1961 madras act 23 of 1961 hereinafter called the amending act. we shall briefly state the facts relevant to the question raised. the petitioner in writ petition number 144 of 1963 p. vajravelu mudaliar is the owner of lands bearing survey number. 4-2 40-7 and 43-1 of peruakudal village and of extents 1.82 1.39 and 3.72 acres respectively. by a numberification dated numberember 7 1960 and published in the fort. st. george gazette dated numberember 16 1960 the government issued a numberification under s. 4 1 of the land acquisition act act 1 of 1894 hereinafter called the principal act numberifying that among other lands the said lands of the petitioner were needed for a public purpose to wit for the development of the area as neighborhood in the madras city in accordance with the land acquisition and development scheme of the government. on numberember 23 1960 the special deputy companylector for land acquisition issued a numberification under s. 4 1 read with s. 17 4 of the principal act and under the said numberification the first respondent was authorized to take possession of the petitioners lands. the madras legislature subsequently enacted the amending act providing for the acquisition of lands for housing schemes and laying down principles for fixing companypensation different from those prescribed in the principal act. the petitioner questions the validity of the amending act inter alia on the ground that it infringes arts. 14 19 and 31 2 of the constitution. the petitioner in writ petitions number. 227 and 228 of 1963 most rev. dr. l. mathias archbishop of madras owns lands bearing survey number. 17-2-b-1 and 127/2b of extent 50.53 acres and 0.62 acre respectively in urur near madras city. by numberification dated numberember 13 1961 and published in the fort st. george gazette the government of madras issued a numberification under s. 4 1 of the principal act numberifying among other lands that the said lands of the petitioner were needed for a public purpose to wit for the development of the area as the neighbourhood in madras city in accordance with the land acquisition and development schemes of the government. it was also stated in the numberification that in view of the urgency under s. 17 4 of the principal act the application of the provisions of s. 5 a of the said act was dispensed with and that compensation in respect of the said acquisition would be paid in accordance with the provisions of the amending act. the said petitioner w. p. number 228 of 1963 also owns lands bearing survey number. 153/1 and 154/2 at thiruvanmiyar village chingleput district of the extent 21.56 and 10.50 acres respectively totalling about 32 acres. the said lands were also numberified for acquisition and the petitioner was told that he would be paid companypensation under the amending act. the said petitioner in these two petitions questions the constitutional validity of the said amending act on the ground inter alia that it offends arts. 14 19 and 31 2 of the companystitution. to the three petitions the special deputy companylector for land acquisition west madras and the government of madras are made parties. in their companynters the respondents pleaded among others that the said act was saved under art. 31-a of the companystitution and therefore its validity companyld number be questioned on the ground that it infringes either art. 14 art. 19 or art. 31 2 of the companystitution and that even if art. 31-a was number attracted the provisions of the amending act would number infringe any of the said three provisions. in these petitions.some interveners are represented by their counsel and this companyrt had also given numberices to the advocates-general of various states. we have heard the arguments advanced on behalf of the petitioners interveners and the state of madras and the companynsel on behalf of the advocates-general of some of the states who supported the state of madras. mr. a. v. viswanatha sastri learned companynsel for the peti- tioners raised before us the following points i as the madras state housing board act 1961 and the madras town- planning act 1920 are special statutes providing for the execution of housing and improvement schemes and town- planning schemes respectively property for the said schemes can be acquired only after following the procedure prescribed thereunder and the government has numberpower to acquire land for the said purpose under the amending act in derogation of the provisions of the former act. ii the acquisition though it purports to be for a housing scheme is really intended for selling the lands acquired and raising revenue for the state and it is therefore a colourable exercise of the states power. iii the amending act offends arts. 14 and 19 of the companystitution. and iv the amending act is also bad because it does number provide for payment of companypensation within the meaning of art. 31 2 of the companystitution. mr. a. ranganadham chetty learned companynsel for the state of madras companytends that i the government in its discretion has the power to acquire land for housing purposes under any one of the three acts namely the housing board act the town planning act and amending act ii by reason of the constitution seventeenth amendment act 1964 which is retrospective in operation the petitioners are precluded from questioning the validity of the amending act on the ground that it infringes art. 14 art. 19 or art. 31 of the constitution iii the amending act does number infringe either art. 14 or art. 19 of the companystitution and iv after the companystitution fourth amendment act 1955 the expression companypensation carries a meaning different from that given to it in mrs. bela banerjees case 1 and thereafter the adequacy of the amount given for acquisition of land ceased to be justiciable. mr. palkhivala appearing for some of the interveners elabo- rated the companytention of mr. a. v. viswanatha sastri based upon the meaning of the expression companypensation in art. 31 2 of the companystitution. we shall companysider his argument in the relevant companytext in the companyrse of our judgment. the first question need number detain us for though mr. viswa- natha sastri raised the point that the government can only acquire the lands for housing schemes in companyformity with the provisions of either the madras town-planning act 1920 or the madras state housing board act 1961 but number under the provisions of the amending act he did number pursue the matter in view of the following two decisions of this companyrt patna improvement trust v. smt. lakshmi devi 1 and nandeshwar prasad v. u. p. government 3 . therefore numberhing more need be said about this. mr. a. ranganadham chetty relied upon the companystitution seventeenth amendment act 1964 and companytended that art. 31-a as amended precluded the petitioners from questioning the validity of the amending act on the ground that it infringed art. 14 art. 19 or art. 31 of the companystitution. by the said amendment in the definition of the expression estate sub-cl. a of cl. 2 was substituted by a new sub-clause defining the said expression. the material part of the amended sub-cl. a of cl. 2 reads the expression estate shall in relation to any local area have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include-- any land held under ryotwari settlement. from the material on record we cannumber definitely hold whether the lands in question are held under ryotwari settlement. but assuming for the purpose of these petitions that the said lands are held under ryotwari settlement the question arises whether the impugned law provides for acquisition by the state of any estate or any rights therein or the extinguishment or modification of any such rights. the scope of this provision fell to be 1 1954 s.c.r. 558. 2 1963 supp. 2 s.c.r. 812. a.i.r. 1964 s.c. 1217. considered by this companyrt in k. k. kochuni v. the state of madras 1 . there it was held that though the impugned act dealt with an estate it was number saved by art. 31-a of the constitution as the act had numberhing to do with agrarian reform but simply companyferred on junior members of the tarawad joint rights which they had number got before in the sthanam properties. mr. ranganadham chetty criticized this decision on the ground that the said view was based only on a part of the statement of objects and reasons and that the omitted part thereof supported a wider companystruction of the provisions so as to include acquisition of a land for slum clearance or other such social purposes. the omitted part of the statement reads thus the proper planning of urban and rural areas require the beneficial utilisation of vacant and waste lands and the clearance of slum areas. it is true that in the said decision the statement of objects and reasons relevant to the question raised therein was extracted but it was made clear that it was referred to only for the limited purpose of ascertaining the companyditions prevalent at the time the bill was introduced in parliament and the purpose for which the amendment was made. it is commonplace that a companyrt cannumber companystrue a provision of the constitution on the basis of the statement of objects and reasons and this companyrt did number depart from the said salutary rule of companystruction. the real basis of that deci- sion is found at p. 900 and it is the definition of estate refers to an existing law relating to land tenures in a particular area indicating thereby that the article is companycerned only with the land tenure described as an estate. the inclusive definition of the rights of such an estate also enumerates the rights vested in the proprietor and his subordinate tenure holders. the last clause in that definition viz. that those rights also include the rights or privileges in respect of land revenue emphasizes the fact that the article is concerned with land-tenure. it is therefore manifest that the said article deals with a tenure called estate and provides for its acquisition or the extinguishment or modification of the rights of the land holder or the various subordinate tenure-holders in respect of their rights in relation to the estate. the companytrary view would enable the state to divest a proprietor 1 1960 3 s.c.r. 887 900. of his estate and vest it in anumberher without reference to any agrarian reform. his judgment therefore in effect held that art. 31-a i a should be companyfined to an agrarian reform and number for acquiring property for the purpose of giving it to anumberher. this companyrt in ranjit singh v. the state of punjab 1 considered the scope of the said decision. the question that arose in that was whether the east punjab holdings companyservation and prevention of fragmentation act 1948 act 50 of 1948 as amended by the east punjab holdings companysolidation and prevention of fragmentation 2nd amendment and validation act 1960 act 27 of. 1960 was protected by art. 31-a against an attack in the ground that the said act infringed the fundamental rights under arts. 13 14 19 and 31 of the companystitution. this companyrt considered the earlier decisions of this companyrt including the decision in kk. kochuni v. state of madras 2 . adverting to kochunis case hidayatullah j. speaking for the companyrt observed but that was a special case and we cannumber apply it to cases where the general scheme of legislation is definitely agrarian reform and under its provisions something ancillary thereto in the interests of rural econumbery has to be undertaken to give full effect to the reforms. apropos the act before it this companyrt observed the scheme of rural development today envisages number only equitable distribution of land so that there is numberundue imbalance in society resulting in a landless class on the one hand and a companycentration of land in the hands of a few on the other but envisages also the raising of econumberic standards and bettering rural health and social companyditions. that judgment therefore accepts the view that art. 31-a was enacted only to implement agrarian reform but has given a companyprehensive meaning to the expression agrarian reform so is to include provisions made for the development of rural econumbery. under art. 31 2 and 2a of the companystitution a state is prohibited from making a law for acquiring land unless it is for a public purpose and unless it fixes the amount of compensation 1 1965 1 s.c.r. 82. 2 1960 3 s.c.r. 887. or specifies the principles for determining the amount of compensation. but art. 31-a lifts the ban to enable the state to implement the pressing agrarian reforms. the said object of the companystitution is implicit in art. 31-a. if the argument of the respondents be accepted it would enable the state to acquired the lands of citizens without reference to any agrarian reform in derogation of their fundamental rights without payment of companypensation and thus deprive art. 31 2 practically of its companytent. if the intention of parliament was to make art. 31 2 a dead-letter it would have clearly expressed its intention. this companyrt cannumber by interpretation enlarge the scope of art. 31-a. on the other hand the article as pointed out by us earlier by necessary implication is companyfined only to agrarian reforms. therefore we held that art. 31-a would apply only to a law made for acquisition by the state of any estate or any rights therein or for extinguishment or modification of such rights if such acquisition extinguishment or modification is companynected with agrarian reform. mr. ranganadham chetty companytended that acquisition for housing under the amending act is for slum clearance and for relieving companygestion of housing accommodation and that acquisition for such a purpose would be in companynection with agrarian reform in the enlarged sense of that expression accepted by this companyrt. even accepting the argument of the learned companynsel that the act was companyceived and enacted only for the purpose of slum clearance which became an urgent problem for the city of madras we cannumber hold that such a slum clearance relates to an agrarian reform in its limited or wider sense. that apart. the amending act in its comprehensive phraseology takes in acquisition for any housing scheme whether for slum clearance or for creating modem suburbs or for any other public purpose. the provisions of the amending act are number companyfined to any agrarian reform and therefore do number attract art. 31-a of the companystitution. if art. 31 -a of the companystitution is out of the way mr. viswanatha sastri learned companynsel for the petitioners contended that the act is bad as it does number provide for compensation i.e. a just equivalent for the land acquired under the amending act and therefore it offends art. 31 2 of the companystitution. this aspect is elaborated by mr. palkhivala who appeared for one of the interveners in the petitions. he narrated the following four situations i when the law provides for adequate companypensation but there is difference of opinion as to the adequacy of it in a given case ii where the law provides for partially inadequate companysideration based on valid principles related to the property at the time of acquisition iii where it fixes arbitrarily the companypensation based on principles unrelated to the property or to the time of acquisition or to both iv where the companypensation fixed is illusory and contended that in the first situation companypensation is paid that in the second it is a moot question whether the question of adequacy of companypensation is justiciable or number and that in the third and fourth situations the said question is clearly justiciable. mr. ranganadham chetty appearing for the state on the other hand argued that the question of adequacy of companysideration however it arose was number justiciable in a companyrt of law. to appreciate the contentions it is necessary to companysider the following questions i what was the scope of the relevant part of art. 31 2 of the companystitution before the companystitution fourth amendment act 1955 ? ii why was that amendment brought about ? iii what was the change the amendment introduced ? and iv what was the effect of the amendment ? article 31 2 before the said amendment read as follows numberproperty shall be taken possession of or acquired for public purposes unless the law provides for compensation for the property taken possession of or either fixes the amount of companypensation or specifies the principles on which and the manner in which the companypensation is to be determined and given. in mrs. bela banerjees 1 case this companyrt was called upon to companysider the question whether companypensation provided for under the west bengal land development and planning act 1948 was in companypliance with the provisions of art. 31 2 of the companystitution. under the said act lands companyld be acquired many years after it came into force but it fixed the market value that prevailed on december 31 1946 as the ceiling on companypensation without reference to the value of the land at the time of acquisition. in that companytext this court companysidered the provisions of art. 31 2 of the constitution and came to the following companyclusion at p. 563-564 while it is true that the legislature is given the discretionary power of laying down the principles which should govern the determination of the amount 1 1954 s.c.r. 558. to be given to the owner for the property appropriated such principles must ensure that what is determined as payable must be compensation that is a just equivalent of what the owner has been deprived of. within the limits of this basic requirement of full indemnification of the expropriated owner the constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable. whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected is a justiciable issue to be adjudicated by the court. by applying the said principles this companyrt held that the provisions of the said act fixing a ceiling on companypensation without reference to the value of the land was arbitrary and therefore was number in companypliance with in law and spirit the requirement of art. 31 2 of the companystitution. this decision lays down three points namely i the compensation under art. 31 2 shall be a just equivalent of what the owner has been deprived of ii the principles which the legislature can prescribe are only principles for ascertaining a just equivalent of what the owner has been deprived of and iii if the companypensation fixed was number a just equivalent of what the owner has been deprived of or if the principles did number take into account all relevant elements or took into account irrelevant elements for arriving at the just equivalent the question in regard thereto is a justiciable issue. this companyrt therefore authoritatively interpreted art. 31 2 of the companystitution and laid down its scope. this view was reiterated by this court in state of madras v. namasivaya mudaliar 1 . there the question was whether ss. 2 and 3 of the madras lignite acquisition of land act xi of 1953 which sought to amend the land acquisition act 1 of 1894 were invalid because they infringed the fundamental rights under art. 31 of the constitution of owners of lands whose property was to be compulsorily acquired. under that act companypensation made payable for companypulsory acquisition of land was the value of the land on april 28 1947 together with the value of any agricultural improvements made thereon after that date and before publication of the numberification under s. 4 1 . the result of that act was to freeze for the purpose of acquisition the prices of land in the area to which it applied and the owners were 1 1964 6 s.c.r. 936. deprived of the benefit of appreciation of land values since april 28 1947 whenever the numberification under s. 4 1 might be issued and also of number-agricultural improvements made in the land after april 28 1947. that act was passed before the companystitution fourth amendment act 1955 was enacted and therefore the question fell to be companysidered on the article as it existed before the amendment. after numbericing the relevant provisions and the case-law on the subject shah j. speaking for the companyrt said fixation of companypensation for companypulsory acquisition of lands numberified many years after that date on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and spirit of art. 31 2 as it stood before it was amended by the companystitution fourth amendment act 1955. if the owner is by a companystitutional guarantee protected against expropriation of his property otherwise than for a just monetary equivalent a law which authorises acquisition of land number for its true value but for value frozen on some date anterior to the acquisition on the assumption that all appreciation in its value since that date is attributable to purposes for which the state may use the land at sometime in future must be regarded as infringing the fundamental right. it may therefore be taken as settled law that under art. 31 2 of the companystitution before the companystitution fourth amendment act 1955 a person whose land was acquired was entitled to companypensation i.e. a just equivalent of the land of which he was deprived. the companystitution fourth amendment act 1955 amended art. 31 2 and the amended article reads numberproperty shall be companypulsorily acquired or requisitioned save for a public purpose and save by authority of law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of compensation or specifies the principles on which and the manner in which the company- pensation is to be determined and given and numbersuch law shall be called in question in any court on the ground that the companypensation provided by that law is number adequate. a scrutiny of the amended article discloses that it accepted the meaning of the expressions companypensation and principles as defined by this companyrt in mrs. bela banerjees case 1 . it may be recalled that this companyrt in the said case defined the scope of the said expressions and then stated whether the principles laid down take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected is a justiciable issue to be adjudicated by the companyrt. under the amended article the law fixing the amount of companypensation or laying down the principles governing the said fixation cannumber be questioned in any companyrt on the ground that the compensation provided by that law was inadequate. if the definition of companypensation and the question of justiciability are kept distinct much of the cloud raised will be dispelled. even after the amendment provision for compensation or laying down of the principles for determining the companypensation is a companydition for the making of a law of acquisition or requisition. legislature -if it intends to make a law for companypulsory acquisition or requisition must provide for companypensation or specify the principles for ascertaining the companypensation. the fact that parliament used the same expressions namely companypensation and principles as were found in art. 31 before the amendment is a clear indication that it accepted the meaning given by this companyrt to those expressions in mrs. bela banerjees case 1 . it follows that a legislature in making a law of acquisition or requisition shall -provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the just equivalent of what the owner has been deprived of. if parliament intended to enable a legislature to make such a law without providing for companypensation so defined it would have used other expressions like price consideration etc. in craies on statute law 6th edn. at p. 167 the relevant principle of companystruction is stated thus there is a well-knumbern principle of companystruction that where the legislature used in an act a legal term which has received judicial interpretation it must be assumed that the term is used in the sense in which it has been judicially interpreted unless a companytrary intention appears. the said two expressions in art. 31 2 before the constitution fourth amendment act have received an authoritative interpretation by the highest companyrt in the land and it must be presume that parliament did number intend to depart from the meaning given by this companyrt to the said expressions. 1 1954 s.c.r. 558. the real difficulty is what is the effect of ouster of jurisdiction of the companyrt to question the law on the ground that the. companypensation provided by the law is number adequate? it will be numbericed that the law of acquisition or requisition is number wholly immune from scrutiny by the companyrt. but what is excluded from the companyrts jurisdiction is that the said law cannumber be questioned on the ground that the compensation provided by that law is number adequate. it will further be numbericed that the clause excluding the jurisdiction of the companyrt also used the word companypensation indicating thereby that what is excluded from the companyrts jurisdiction is the adequacy of the companypensation fixed by the legislature. the argument that the word companypensation means a just equivalent for the property acquired and therefore the companyrt can ascertain whether it is a just equivalent or number makes the amendment of the companystitution nugatory. it will be arguing in a circle. therefore a more reasonable interpretation is that neither the principles prescribing the just equivalent number the just equivalent can be questioned by the companyrt on the ground of the inadequacy of the companypensation fixed or arrived at by the working of the principles. to illustrate a law is made to acquire a house its value at the time of acquisition has to be fixed there are many modes of valuation namely estimate by an engineer value reflected by companyparable sales capitalisation of rent and similar others. the application of different principles may lead to different results. the adoption of one principle may give a higher value and the adoption of anumberher principle may give a lesser value. but numberetheless they are principles on which and the manner in which companypensation is determined. the companyrt cannumber obviously say that the law should have adopted one principle and number the other for it relates only to the question of adequacy. on the other hand if a law lays down principles which are number relevant to the property acquired or to the value of the property at or about the time it is acquired it may be said that they are number principles companytemplated by art. 31 2 of the companystitution. if a law says that though a house is acquired it shall be valued as a land or that though a house site is acquired it shall be valued as an agricultural land or that though it is acquired in 1950 its value in 1930 should be given or though 100 acres are acquired companypensation shall be given only for 50 acres the principles do number pertain to the domain of adequacy but are principles unconnected to the value of the property acquired. in such cases the validity of the princilples can be scrutinized. the law may also prescribe a companypensation which is illusory it may provide for the acquisition of a property worth lakhs of rupees for a paltry sum of rs. 100. the question in that companytext does number relate to the adequacy of the compensation for it is numbercompensation at all. the illustrations given by us are number exhaustive. there may be many others falling on either side of the line. but this much is clear. if the companypensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition it can be said that the legislature companymitted a fraud on power and therefore the law is bad. it is a use of the protection of art. 31 in a manner which the article hardly intended. this leads us to the companysideration of the question of the scope of the doctrine of fraud on power. in gajapati narayan deo v. the state of orissa 1 mukhejee j. as he then was .explained the doctrine thus it may be made clear at the outset that the doctrine of companyourable legislation does number involve any question of bona fides or mala fides on the part of the legislature. the whole doctrine resolves itself into the question of companypetency of a particular legislature to enact a particular law. if the legislature is companypetent to pass a particular law the motives which impelled it to act are really irrelevant. on the other hand if the legislature lacks companypetency the question of i motive does number arise at all. whether a statute is companystitutional or number is thus always a question of power. the learned judge described how the legislature may transgress the limits of its constitutional power thus such transgression may be patent manifest or direct but it may also be disguised companyert or indirect and it is to this latter class of cases that the expression companyourable legislation has been applied in certain judicial pronumberncements. companyrt again explained the said doctrine in gullapalli nageswara rao v. andhra pradesh state road transport companyporation 2 thus me legislature can only make laws within its legislative companypetence. its legislative field may be circumscribed by specific legislative entries or limited by fundamental rights created by the companystitution. the legislature cannumber over-step the field of its companypetency 1 1954 s.c.r. 1 10-11. 2 1959 supp. 1 s.c.r. 319329. directly or indirectly. the companyrt will scrutinize the law to ascertain whether the legislature by device purports to make a law which though in form appears to be within its sphere in effect and substance reaches beyond it. if in fact it has power to make the law its motives in making the law are irrelevant. when a companyrt says that a particular legislation is a colourable one it means that the legislature has transgressed its legislative powers in a companyert or indirect manner it adopts a device to outstep the limits of its power. applying the doctrine to the instant case the legislature cannumber make a law in derogation of art. 31 2 of the companystitution. it can therefore only make a law of acquisition or requisition by providing for companypensation in the manner prescribed in art. 31 2 of the companystitution. if the legislature though ex facie purports to provide for compensation or indicates the principles for ascertaining the same but in effect and substance takes away a property without paying companypensation for it will be exercising power which it does number possess. if the legislature makes a law for acquiring a property by providing for an illusory compensation or by indicating the principles for ascertaining the companypensation which do number relate to the property acquired or to the value of such property at or within a reasonable proximity of the date of acquisition or the principles are so designed and so arbitrary that they do number provide for companypensation at all one can easily hold that the legislature made the law in fraud of its powers. briefly stated the legal position is as follows if the question pertains to the adequacy of companypensation it is number justiciable if the companypensation fixed or the principles evolved for fixing it disclose that the legislature made the law in fraud of powers in the sense we have explained the question is within the jurisdiction of the companyrt. the next question is whether the amending act was made in contravention of art. 31 2 of the companystitution. the amending act prescribes the principles for ascertaining the value of the property acquired. it was passed to amend the land acquisition act 1894 in the state of madras for the purpose of enabling the state to acquire lands for housing schemes. housing scheme is defined to mean any state government scheme the purpose of which is increasing house accommodation and under s. 3 of the amending act s. 23 of the principal act is made applicable to such acquisition with certain modifica- tions. in s. 23 of the principal act in sub-s. 1 for clause first the following clause is substituted first the market value of the land at the date of the publication of the numberification under section 4 subsection 1 or an amount equal to the average market value of the land during the five years immediately preceding such date whichever is less. after clause sixthly the following clause was added seventhly the use to which the land was put at the date of the publication of the numberification under section 4 sub-section 1 . sub-section 2 of s. 23 of the principal act was amended by substituting the words in respect of solatium fifteen per centum by the words five per centum. in s. 24 of the principal act after the clause seventhly the following clause was added eighthly any increase to the value of the land acquired by reason of its suitability or adaptability for any use other than the use to which the land was put at the date of the publication of the numberification under section 4 sub-section 1 . under s. 4 of the amending act the provisions of s. 3 thereof shall apply to every case in which proceedings have been started before the companymencement of the said act and are pending. the result of the amending act is that if the state government acquires a land for a housing purpose the claimant gets only the value of the land at the date of the publication of the numberification under s. 4 1 of the principal act or an amount equal to the average market value of the land during the five years immediately preceding such date whichever is less. he will get a solatium of only 5 per centum of such value instead of 15 per centum under the principal act. he will number get any companypensation by reason of the suitability of the land for any use other than the use for which it was put on the date of publication of the numberification. the second principle is only for a solatium and it is certainly within the powers of the legislature to fix the quantum of solatium in acquiring the land. number can we say that the first principle amounts to fraud on power. in the companytext of companytinuous rise in land prices from year to year depending upon abnumbermal circumstances it cannumber be said that the fixation of average price over 5 years is number a principle for ascertaining the price of the land in or about the date of acquisition. the third principle excludes what is described by companyrts as the potential value of the land acquired. when a land is acquired companypensation is determined by reference to the price which a willing vendor might reasonably expect to obtain from a willing purchaser. the judicial companymittee in sri raja vyricherla narayana gajapatraju bahdur garu v. the revenue divisional officer vizianagaram 1 held in clear terms that in the case of companypulsory acquisition the land is number to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined but also by reference to the uses to which it is reasonably capable of being put in the future. in awarding companypensation if the potential value of the land is excluded it cannumber be said that the companypensation awarded is the just equivalent of what the owner has been deprived of. but such an exclusion only pertains to the method of ascertaining the companypensation. one of the elements that should properly be taken into account in fixing the compensation is omitted it results in the inadequacy of the companypensation but that in itself does number companystitute fraud on power as we have explained earlier. we therefore hold that the amending act does number offend art. 31 2 of the companystitution. mr. viswanatha sastri then companytended that though the lands were being acquired for the ostensible purpose of housing schemes the real purpose was to provide revenue for the state. it is stated that the acquisition is made for and on behalf of the state housing board at rs. 50 or rs. 60 per ground that the said board sells the lands so acquired to private individuals including the original owners thereof if the housing board so pleased at a price of rs. 300/- per ground and that it is a device to get revenue for the state. on behalf of the state companynter-affidavits are filed in the three petitions denying that the lands are being acquired for filling the companyfers of the state and stating that the schemes for acquisition are worked out at numberprofit-numberloss basis. it appears from the companynter- affidavits and the documents filed that there cannumber possibly be any sinister motive behind the proposed acquisition. madras is a growing city. by letter dated october 20 1959 the government of india suggested to the states for taking on hand development schemes. the govern- ment of madras had companysidered the question of development of the neighborhoods of the madras city for relieving the growingcompanygestion and overcrowding in the city and after making the necessary enquiries and investigations by order dated. i.l.r. 1939 mad. 532. sup. ci/65-- february 13 1960 it directed the state housing board to take immediate steps for preparing companyposite layouts for the west madras and vyasarpadi areas after fixing up the limits of the areas in the manner indicated by the board and for the acquisition and development of the areas as neighborhoods in accordance with the land acquisition and development scheme of the government of india. it directed the said board to give priority to the west madras over the vyasarpadi area in the matter of preparation of composite layouts and acquisition. pursuant to the direction schemes were framed and acquisition proceedings were initiated. it is stated in the companynter-affidavit the lands are being acquired with a view to develop them into companyposite housing companyonies making provision therein to persons in various strata of society from slum dwellers upwards and eventually providing for high schools elementary schools dispensaries shopping centres police stations and playgrounds and all other companymunity needs etc it is a companyposite scheme involving heavy expenditure and adjustments of civil demands of the rich and the poor. whatever profit is made in the sales of land will be pumped back for improving the companyony and for providing amenities for the poorer classes of the society. except the bare statement by the petitioners in their affidavits that the lands cheaply acquired are being sold at higher prices the averments of the state that the acquisition is part of a larger scheme of building up of a housing companyony on modern lines providing for the rich and the poor alike have number been denied. it is number necessary to pursue the matter further. the petitioners have failed to establish that their lands are being acquired as a device to improve the revenue of the state. indeed we are satisfied that the lands are being acquired bona fide for developing a housing colony. the last companytention of mr. viswanatha sastri is that the amending act is hit by art. 14 of the companystitution. the law on the subject is well-settled. under art. 14 the state shall number deny to any person equality before the law or the equal protection of the laws within the territory of india. but this does number preclude the legislature from making a reasonable classification for the purpose of legislation. it has been held in a series of decisions of this companyrt that the said classification shall pass two tests namely i the classification must be founded on an intelligible differential which distinguishes persons and things left out of the group and ii the differential must have a rational relation to the object sought to be achieved by the statute in question. to ascertain whether the impugned act satisfies the said two tests three questions have to be posed namely i what is the object of the act ? ii what are the differences between persons whose lands are acquired for the housing schemes and these whose lands are acquired for purposes other than housing schemes or between the lands so acquired? and iii whether those differences have any reasonable relation to the said object. on a companyparative study of the principal act and the amending act we have shown earlier that if a land is acquired for a housing scheme under the amending act the claimant gets a lesser value than he would get for the same land or a similar land if it is acquired for a public purpose like hospital under the principal act. me question is whether this classification between persons whose lands are acquired for housing schemes and persons whose lands are acquired for other public purposes has reasonable relation to the object sought to be achieved. the object of the amending act is to acquire lands for housing schemes. it may be as the learned companynsel companytends the amending act was passed to meet an urgent demand and to find a way out to clear up slums a problem which has been baffling the city authorities for a long number of years because of want of funds. but the act as finally evolved is number companyfined to any such problem. under the amending act lands can be acquired for housing schemes whether the object is to clear slums or to improve housing facilities in the city for rich or poor. it may be assumed that in the madras city the housing problem was rather acute and there was abnumbermal increase in population and companysequent pressure on accommodation and that there was also an urgent need for providing houses for the middle-income groups and also to slum-dwellers. however laudable the objects underlying the amending act may be it was so framed that under the provisions thereof any land big or small waste or fertile owned by rich or poor can be acquired on the ground that it is required for a housing scheme. the housing scheme need number be companyfined to slum clearance the wide phraseology used in the amending act permits acquisition of land for housing the prosperous section of the companymunity. it need number necessarily cater to a larger part of the population in the city it can be companyfined to a chosen few. the land companyld have been acquired for all the said purposes under the principal act after paying the market value of the land. me amending act empowers the state to acquire land for housing schemes at a price lower than that the state has to pay if the same was acquired under the principal act. number what are the differences between persons owning lands in the madras city or between the lands acquired which have a reasonable relation to the said object. it is suggested that the differences between people owning lands rested on the extent quality and the suitability of the lands acquired for the said object. the differences based upon the said criteria have numberrelevance to the object of the amending act. to illustrate the extent of the land depends upon the magnitude of the scheme undertaken by the state. a large extent of land may be acquired for a university or for a network of hospitals under the provisions of the principal act and also for a housing scheme under the amending act. so too if the housing scheme is a limited one the land acquired may number be as big as that required for a big university. if waste land is good for a housing scheme under the amending act it will -equally be suitable for a hospital or a school for which the said land may be acquired under the principal act. number the financial position or the number of persons owning the land has any relevance for in both the cases land can be acquired from rich or poor from one individual or from a number of persons. out of adjacent lands of the same quality and value one may be acquired for a housing scheme under the amending act and the other for a hospital under the principal act out of two adjacent plots belonging to the same individual and of the same quality and value one may be acquired under the principal act and the other under the amending act. from whatever aspect the matter is looked at the alleged differences have numberreasonable relation to the object sought to be achieved. it is said that the object of the amending act in itself may project the differences in the lands sought to be acquired under the two acts. this argument puts the cart before the horse. it is one tying to say that the existing differences between persons and properties have a reasonable relation to the object sought to be achieved and it is totally a different thing to say that the object of the act itself created the differences. assuming that the said proposition is sound we cannumber discover any differences in the people owning lands or ill. the lands on the basis of the object. the object is to acquire lands for housing schemes at a low -price. for achieving that object any land falling in any of the said categories can be acquired under the amending act. so too for a public purpose any such land can be acquired under the principal act. we therefore hold that discrimination is writ large on the amending act and it cannumber be sustained on the principle of reasonable classification. we therefore hold that the amending act clearly infringes art. 14 of the companystitution and is void. in this view it is number necessary to express our opinion on the question whether the amending act infringes art. 19 of the companystitution. in the result it is hereby declared that the amending act is void. we direct the issue of writs of mandamus restraining the respondents from proceeding with the acquisition under the provisions of the amending act.

Leave granted. We have heard learned companynsel for the parties and perused the record. The respondent was tried and companyvicted under Section 376 I.P.C. by the trial companyrt for the alleged offence of rape companymitted on 29th June, 2008 but has been acquitted by the High Court. The victim is deaf and dumb and mentally challenged to some extent. Main evidence on record is of PW-1, Asha Ramratan Bangar Asha Panchu Dhurve, the mother of the victim. She lodged FIR on the next day i.e. 30 th June, 2008 to Signature Not Verified Digitally signed by MAHABIR SINGH Date 2017.10.28 123119 IST the effect that the accused was the landlord of the house in Reason which they were living. The victim was lured away by the accused by offering some sweet meat and was taken to the CRL. APPEAL SLP CRL. NO.2172 OF 2014 market.

CITATION: R. v. Cornelius, 2011 ONCA 551 DATE: 20110810 DOCKET: C49484 COURT OF APPEAL FOR ONTARIO Rosenberg, Juriansz and LaForme JJ.A. BETWEEN Her Majesty the Queen Respondent and Donny Cornelius Appellant Jill R. Presser, for the appellant Lucy Cecchetto, for the respondent Heard: April 6, 2011 On appeal from conviction entered by Justice D. Little of the Superior Court of Justice, sitting with a jury, on November 30, 2007. Rosenberg J.A . : [1] The appellant appeals his conviction for second degree murder and for a number of firearms offences by a court composed of Little J. and a jury.  The appellant submits that the trial judge did not adequately direct the jury in a number of respects concerning after the fact conduct, the evidence in support of the defence, the mental elements for murder and manslaughter and the elements of the firearms offences. [2] For the following reasons, I would dismiss the appeal THE FACTS [3] On December 13, 2005, the deceased, Jeff Davis, was shot to death outside his friend’s townhouse.  The principal issue at trial was whether the appellant or his neighbour Justin Antonucci fired the fatal shots.  Both testified and each claimed that the other brought the gun to the scene of the shooting and fired the fatal shots. [4] Antonucci and Davis worked together at a roofing company.  The altercation that led to the death of the deceased had its origin in a dispute over a $40 drug debt that Antonucci owed to Davis.  Following the company Christmas Party, Antonucci, Davis and others went to the townhouse of Kelly Tardiff, a fellow employee.  The people at the townhouse were drinking and consuming drugs and in the course of the evening, Davis became increasingly belligerent towards Antonucci over the drug debt.  Eventually, he left the room and Antonucci and his girlfriend left the townhouse. [5] When Antonucci arrived back at his apartment building his girlfriend went into his unit.  Antonucci went over to the neighbouring unit, where the appellant lived and was invited in.  Antonucci told the appellant that he had been in a fight over a drug debt.  There was a dispute about Antonucci’s purpose in going to the appellant’s home. [6] There was some dispute about whether Antonucci asked the appellant for money to repay Davis and whether he asked the appellant to accompany him back to Tardiff’s home.  In any event, the appellant and his girlfriend Melissa Henry, Antonucci, and two of their acquaintances Michael Hicken and Tyler Pangborn, returned to the Tardiff home in Hicken’s father’s car.  When they reached the Tardiff home, Hicken and Pangborn remained in the car while the appellant and Antonucci headed towards the home.  According to the appellant, as they approached the home Antonucci pulled out a gun and said that if things get out of hand he had “this”.  The appellant demanded that Antonucci give him the gun.  He did so and the appellant put the gun in his pocket.  Antonucci denied that he ever had a gun. [7] While there were some discrepancies among the various witnesses as to what happened next, it is sufficient for the purposes of this appeal to set out the two competing versions, one favouring the appellant’s theory that Antonucci killed the deceased and the other version that it was the appellant who killed the deceased.  There was some evidence supporting both versions, in addition to the testimony of the appellant and of Antonucci. [8] The appellant and Antonucci approached the Tardiff residence. Antonucci knocked on the door and Davis came out moments later.  After some kind of confrontation with Antonucci, he approached the appellant and asked Antonucci if the appellant was his “heavy”.  According to the appellant, he started to panic as Davis approached.  He pulled out Antonucci’s gun and fired a warning shot into the ground.  Davis kept charging at him and began to punch him.  The appellant attempted to protect himself as Davis punched him.  The appellant dropped the gun as he fell into a snowbank.  He saw Antonucci run up, pick up the gun and shoot Davis three times.  Antonucci testified that he never picked up the gun; rather the appellant fired the warning shot and then fired three more shots into Davis. [9] None of the people who came with the appellant and Antonucci or from the Tardiff home testified to seeing who fired the shots into Davis.  There was one independent witness who did see the shooting.  Tardiff’s next-door neighbour, Heather-Anne Ference, described the confrontation in a way that indicated that the appellant was the shooter of both the warning shot and the three fatal shots.  However, in cross-examination, her evidence became somewhat confused and the appellant submits that her description of the shooter’s clothing more closely resembled the clothing worn by Antonucci. [10] After the shooting, Antonucci and the appellant ran back to the car and Hicken drove them back to the appellant’s apartment.  All four men and the appellant’s girlfriend entered the appellant’s apartment.  According to the appellant, Antonucci told him not to say anything about the shooting.  According to Antonucci, the appellant threatened to harm Antonucci’s daughter and girlfriend if he said anything to the police.  He saw the appellant put the gun in his safe.  The appellant denied this.  After Antonucci and Hicken left the appellant’s apartment, the appellant and Pangborn packed up the contents of the safe to take to his mother’s house on the Oneida reserve.  According to the appellant, the safe only contained some marijuana and $3500.  According to Pangborn, they also packed up a gun, which looked like the gun from the shooting.  Pangborn testified that he had seen a gun at the appellant’s apartment on an earlier occasion.  The appellant explained that he took the items out of his apartment because he assumed the police would be coming as a result of the shooting and he did not think it would look good for them to find the marijuana and cash. [11] Antonucci testified that the following day, the appellant told him to burn his clothes.  The appellant denied this and testified that in fact Antonucci told him to get rid of his clothes.  Upon his arrest, the appellant gave a statement to the police in which he denied being at the scene of the shooting.  At trial, he testified that he lied because he was scared and had agreed with Antonucci not to give evidence against him.  For his part, Antonucci also lied to the police and originally identified an innocent person as the shooter. [12] Gunshot residue was found on the appellant’s and Antonucci’s clothing.  It was not possible to know whether the residue was from holding the gun or being near to it when it was discharged.  The deceased suffered three gunshot wounds: one in the neck, chest and thigh. The gunshot wound to the neck was fatal. THE GROUNDS OF APPEAL [13] The appellant raises the following grounds of appeal: (1) Misdirection with respect to post-offence conduct. (2) Failure to accurately summarize the evidence in support of the defence in the charge to the jury. (3) Misdirection with respect to the mental element for murder. (4) Misdirection with respect to the fault requirement for manslaughter. (5) Misdirection with respect to the weapons offences. (6) Failure to leave the defence of accident. ANALYSIS (1)       Misdirection with respect to post-offence conduct [14] There were significant pieces of post-offence conduct that the Crown relied upon to prove that the appellant had fired the fatal shots.  Depending upon the version of events accepted by the jury, that evidence included the flight from the scene, threats to Antonucci, disposal of the gun and the lies to the police.  The charge to the jury specifically dealing with post-offence conduct was brief: Look at the evidence in this case that happened after the shooting, evidence of what a person did or said after the offence.  What Mr. Cornelius did, things like allegations that he threatened Justin [Antonucci], allegations that he disposed of items and so on, may indicate that it is what a person would do if they were guilty but it may not.  It may be consistent with a person who has committed the offence and inconsistent with the evidence of someone who did not, or there may be an explanation for it and in this case, Cornelius gave an explanation for the trip to the reserve and as I recall, he denied any threats. [15] In reviewing the appellant’s testimony, the trial judge touched upon the gun, noting that the appellant denied taking the gun back to his apartment.  He did not otherwise deal with the post-offence conduct. [16] The appellant submits that the charge to the jury concerning after-the-fact conduct was deficient in failing to explain: · the need to be cautious about drawing incriminatory inferences from such conduct; · the need to decide whether the conduct even occurred; · the need to consider alternate innocent explanations such as panic, fear or embarrassment; · the need to consider whether the conduct was referable to some other offence such as handling the gun or commission of drug offences; · the need to consider whether the conduct was referable only to culpability for the homicide, not murder. [17] While the appellant submits that the level of culpability was an issue in this case, i.e. whether the appellant was guilty of murder or manslaughter, the principal issue was whether the Crown proved that the appellant had fired the three fatal shots.  The appellant admitted firing the warning shot, in self-defence, but testified that it was Antonucci who fired the fatal shots.  The Crown’s case was that it was the appellant that fired all of the shots, including the fatal shots.  The only items left to the jury by the trial judge on the issue of identity, or as the trial judge put it, “may be consistent with a person who has committed the offence”, were the threats to Antonucci and the disposal of the “items”.  None of the other potential pieces of evidence were left to the jury as post-offence conduct.  This is not surprising given that Antonucci also fled the scene and lied to the police. [18] The most recent decision from the Supreme Court of Canada on the directions to be given to the jury in cases where there is evidence of post-offence conduct is R. v. White (2011), 267 C.C.C. (3d) 452.  While there were three sets of reasons, the main issue dividing the members of the court was the application of the law to the particular set of facts.  As I read the decision, there was little dispute as to the legal principles.  The point that principally divided the members of the court was the use to be made of demeanour evidence as potentially giving rise to an inference of consciousness of guilt.  That issue does not arise in this case. [19] The principles relevant to this case were set out by Binnie J., writing for himself and McLachlin and Fish JJ.  While he was in dissent, Binnie J.’s analysis of the legal principles was adopted by Charron J. writing for herself and Deschamps J.  For the purposes of this case, the important points are set out in paragraphs 137 to 140 of the reasons of Binnie J.  Charron J. expressed her agreement with those principles at paragraphs 105 and 107 of her reasons.  I would summarize the applicable principles as follows: 1.         It is not the case that anything done by an accused after the offence is subject to a special warning. 2.         “The general rule is now, as in the past, that it is for the jury to decide, on the basis of the evidence as a whole, whether the post-offence conduct put in evidence against the accused is related to the commission of the crime before them rather than to something else, and if so, how much weight, if any, such evidence should be accorded in the final determination of guilt or innocence. For the trial judge to interfere in that process will in most cases constitute a usurpation of the jury's exclusive fact-finding role”: para. 137. 3.         However, there may be cases where a warning is required because jurors may attach more weight to the post-offence conduct than is warranted.  “This risk exists with respect to some types of post-offence conduct relied upon by the Crown and in those cases it only makes sense for the judges to alert the jurors to what the courts have collectively learned over the years, especially when that learning may for some jurors be counter-intuitive”: para. 138. 4.         However, the bulk of so-called post-offence conduct “will simply flow into the record as an unremarkable part of the narrative”: para. 140. 5.         Like all other circumstantial evidence, evidence of post-offence conduct will be relevant and admissible depending on whether it has some tendency “as a matter of logic, common sense, and human experience... to help resolve the issues in the case”: para. 140. [20] In my view, the two items of evidence left to the jury in this case did not require a special caution.  The threats to Antonucci and removing the items for the safe do not fall within the category of evidence, like the flight evidence considered in White , where there was a risk that the jury would give it more weight than warranted, or as it was expressed by Rothstein J. at para. 23, the risk that the jury would “jump too quickly from evidence of post-offence conduct to an inference of guilt”. [21] I begin with the threats to Antonucci.  The appellant’s position on this issue was simple and straightforward.  He denied making the threats and, to the contrary, claimed that it was Antonucci who advised him to get rid of his clothing.  There was nothing remarkable about this evidence.  So far as the appellant knew, only he and Antonucci were witnesses to the shooting.  If he threatened Antonucci it was for only one purpose, to persuade Antonucci to cover-up for him.  This was the kind of evidence that could be safely left to the jury members to use their own experience and common sense to decide what weight to attach to it. [22] The removal of the items from the safe to hide them at the appellant’s mother’s reserve falls within a similar category.  I begin with the appellant’s version.  The appellant testified that he took the money and the marijuana from the safe because he was concerned that the police would come to his apartment and it would not look good.  It might have been helpful had the trial judge reminded the jury of this explanation, but this case did not turn on the disposal of the marijuana and the money.  The real issue was the disposal of the gun.  And, the probative value of the evidence concerning the gun turned not on any inference of consciousness of guilt, but simply on whether the appellant had the gun in his possession after the shooting.  Again there was no risk that the jury would place undue emphasis on the question of disposal of the gun.  Their attention would be focused on the evidence of Pangborn, Antonucci and the appellant.  If the appellant’s version of the shooting was correct, he would not have had possession of the gun after the killing.  If Antonucci and Pangborn were telling the truth, and the appellant had possession of the gun, this was highly probative evidence supporting an inference that he had shot the deceased. [23] In my view, this was one of those cases, possibly rare, where no special cautionary instructions were required to enable the jury to properly deal with the post-offence conduct.  This evidence could be dealt with like the other circumstantial evidence in the case, leaving it for the jury to draw what inferences they thought proper. [24] I am also satisfied that this is not a case where it was necessary to instruct the jury expressly that this evidence could be relevant only to culpability for an unlawful homicide, not murder.  In the brief passage dealing with the post-offence conduct, the trial judge simply told the jury they could consider the evidence to decide whether it was consistent with a person who has committed “the offence”.  The passage about this evidence almost immediately followed the trial judge’s W.D. instruction where the trial judge reminded the jury that the appellant had testified and denied that he shot and killed the deceased.  The jury would not have had any difficulty understanding that the purpose of this evidence was to identify the killer. [25] I would not give effect to this ground of appeal. (2)       Failure to accurately summarize the evidence in support of the defence in the charge to the jury [26] The appellant submits that the trial judge erred in failing to fully and accurately summarize the evidence favouring the defence in two respects: (1) the evidence of Heather-Anne Ference, the next-door neighbour, and (2) Tyler Pangborn’s evidence about the gun being removed from the safe. [27] The complaint about Ms. Ference’s evidence turns on her description of the clothing worn by the shooter.  The appellant submits that the trial judge erred in failing to instruct the jury that Ms. Ference testified that the shooter was wearing a white shirt under a dark jacket.  According to the appellant, this was a significant omission because several witnesses testified that Antonucci was wearing a white shirt under a grey ski jacket whereas the appellant was wearing a red hooded sweatshirt.  In their submissions, counsel carefully reviewed Ms. Ference’s evidence.  Having considered those submissions and reviewed Ms. Ference’s testimony I am not satisfied that the trial judge erred. [28] Central to the appellant’s submission is the assertion that Ms. Ference described the shooter as wearing a white shirt.  To appreciate the nature of this submission, I need to expand somewhat on Ms. Ference’s evidence as to what occurred that night.  She had gone to bed in her bedroom on the second floor of her house, which was next door to the Tardiff residence.  At some point, her attention was attracted by a noise like a door slamming.  She looked out the window and down onto the scene.  In her description of the events she referred to the three people she saw as A, B and C.  A is obviously the deceased.  She described A coming out of the house and confronting B who was directly in front of him, with C being over to the side.  B backed up towards a snow bank as A moved forward.  By this time she had lost track of C.  She then saw B bring his left hand up and she heard a bang and saw a flash.  A’s hand went up to his face and then there was another shot and A grabbed his stomach.  There was a third shot and A tried to run back to the Tardiff residence but he collapsed.  Ms. Ference immediately called “911”.  She next saw C in a car apparently gesturing at B to come to the car.  B headed towards the car and at one point bent down and picked something up. [29] In examination-in-chief, Ms. Ference described B (the shooter) as having a “pretty-boy haircut” meaning messy on top and short on the sides.  He was wearing a black leather jacket, but not “your typical” jacket, it was more like a denim jacket with no collar and a zipper, with a “light” or “light blue” shirt underneath and some dark pants. Later, she also described the shirt as “the white shirt, or the light blue, like it was a light coloured shirt”. She was unable to give much of a description of C as she really wasn’t paying attention to him. [30] In cross-examination, trial counsel for the appellant used diagrams to try to understand Ms. Ference’s evidence.  It is in the use of these diagrams that the descriptions become a little more confusing.  Counsel put to Ms. Ference an exhibit from the preliminary inquiry in which she also used A, B and C but B at the preliminary was C at the trial and C at the preliminary was B at the trial.  To make the evidence less confusing, counsel had Ms. Ference mark a new exhibit in which the shooter is described as “white shirt”.  However, Ms. Ference maintained her description of the shooter as wearing a leather jacket with a light coloured shirt.  She adopted her preliminary inquiry evidence that the third person was wearing a jacket and a pair of jeans, which she described as darker clothes.  She also described the shooter as having a darker complexion than the third person. [31] The upshot of this evidence is that the shooter had the pretty-boy haircut, was of darker complexion than the third person and was wearing a dark jacket with a light coloured shirt.  The third person was wearing darker clothes, but Ms. Ference did not describe the colour of his shirt.  The jury was in the best position to compare the complexions of the appellant and Antonucci.  However, the photographs that were taken of both men shortly after the shooting show the appellant having a darker complexion than Antonucci, and his haircut matches the description of the shooter; Antonucci’s haircut is different.  The other point that must be made about the photograph is that while the appellant claimed that he was hit in the face by the deceased, there is no sign of injury.  Finally, the shooter used his left hand and the appellant is left-handed. Mr. Antonucci is right-handed. [32] The evidence as to what the appellant and Antonucci were wearing is far from clear.  Descriptions of Antonucci’s shirt vary from a white shirt to a black and white shirt, all black shirt, all white shirt, striped shirt.  The description of the appellant’s clothing was consistent as a red hooded sweatshirt. [33] It may be that Antonucci’s clothing more closely resembled the clothing of the shooter as described by Ms. Ference, but it would not be correct to say that she unequivocally testified that the shooter was wearing a white shirt.  Thus, the trial judge was not required to charge the jury to that effect.  The jury was aware of the competing inferences to be drawn from Ms. Ference’s evidence from counsels’ jury addresses.  The trial judge’s review of Ms. Ference’s evidence was extensive and otherwise accurate, but for one matter.  In the charge to the jury he described the shooter as having a lighter complexion than the third person.  Following an objection from Crown counsel and review of the recording of the evidence, the trial judge corrected this error.  Defence counsel at trial (not Ms. Presser) did not object to the trial judge’s summary of Ms. Ference’s evidence even when the issue concerning her description of the complexion was raised by Crown counsel. [34] The trial judge’s failure to refer to this single piece of evidence about the colour of the shirt of the shooter did not breach his duty to fairly put the evidence in support of the defence. [35] The complaint about the trial judge’s treatment of Mr. Pangborn’s evidence about seeing the appellant put the gun in a bag concerns an apparent admission by Mr. Pangborn that he saw a “black object” rather than a gun put in the bag.  During examination-in-chief, by adopting two statements he made to the police, Mr. Pangborn testified that he had seen the appellant with a handgun about a month before the shooting.  In the statements, Pangborn described the gun in some detail.  He further testified in chief that he saw the appellant pack that same gun in the bag along with the marijuana before they went to the Reserve.  In cross-examination he was referred to the testimony he gave at the preliminary inquiry, where he said that the gun the appellant put in the bag was not the one the appellant had shown him earlier.  While he maintained that his testimony at trial was correct, he conceded that it could have been a different gun.  He explained that he was not very familiar with guns.  Finally, while he stated on several occasions that he saw the appellant put a gun in the bag, he somewhat qualified that statement in this exchange with defence counsel: Q.        Now, you say, sir, that at some point, you see Mr. Cornelius put a weapon into a bag, is that correct? A.        Yes. Q.        And if I were to suggest to you, sir, that that in fact, is not true and that that did not happen, what would you have to say to that? A.        I don’t know. Q.        Well, is it possible that you didn’t see that? A. No, I seen – well, I thought I seen the gun put in there.  Like, I see a black object put into the bag. Q.        Now, it’s either you saw that or you think you saw that, so it’s one or the other. A. Okay, I think I seen the gun go into the bag . [Emphasis added.] [36] The cross-examination continued with a few more questions that simply demonstrated Mr. Pangborn was having difficulty understanding counsel’s questions and, in particular, in understanding how he was to respond to suggestions made by counsel with which he was to agree or disagree.  He did disagree with counsel’s suggestion that he had not seen a gun in the appellant’s possession on a previous occasion. [37] In his summary of Mr. Pangborn’s evidence, the trial judge accurately pointed out that Mr. Pangborn conceded in cross-examination that the gun he saw the appellant put in the bag may have been different from the one he saw on the earlier occasion.  The trial judge did not refer to Mr. Pangborn’s further concession when he referred to a black object being put in the bag.  In my view, the failure to refer to this piece of evidence did not deprive the appellant of a fair trial.  It is not at all clear that Mr. Pangborn resiled from his earlier and later testimony that he saw a gun put in the bag.  In context, this evidence was just not critical to the defence case.  Again no objection was taken by trial counsel to the trial judge’s summary of Mr. Pangborn’s evidence. [38] I would not give effect to this ground of appeal. (3)       Misdirection with respect to the mental element for murder [39] This issue can be dealt with briefly.  On two occasions, in reciting the elements of murder as defined in s. 229(a)(ii) of the Criminal Code , the trial judge told the jury that they had to decide if the appellant meant to kill the deceased or meant to cause him bodily harm and knew that it was likely that it would kill Davis “or [was] reckless as to whether or not he died”.  The correct instruction using the word “and” instead of “or” was given before and after the erroneous instructions.  More importantly, the correct description of the elements of the offence was contained in the decision tree, copies of which were given to the jurors during their deliberations.  The trial judge’s mistake was harmless in the circumstances. (4)       Misdirection with respect to the fault requirement for manslaughter [40] At the request of the defence, the trial judge told the jury that they could reach a verdict of manslaughter by two different routes.  The most obvious route was as an included offence to murder.  But, the defence also wanted manslaughter left to the jury on the theory that the warning shot, which the appellant admittedly fired, was an unlawful act that contributed to the death, even if it was Antonucci who fired the fatal shots.  The defence then argued that the jury could acquit even of manslaughter, on the basis that this unlawful act did not cause the death.  This ground of appeal concerns this alternative route to manslaughter. [41] The appellant submits that in dealing with this alternative route to manslaughter the trial judge failed to adequately define for the jury the fault element of unlawful act manslaughter.  In my view, there is no merit to this ground of appeal.  At trial, there was no dispute that shooting a firearm in the direction of an unarmed man was an unlawful act for the purpose of grounding liability for manslaughter.  The issue on this theory of manslaughter was whether the act of Antonucci in picking up the gun and shooting the deceased three times, broke the chain of causation.  The question of whether the shooting of the gun at the unarmed deceased in a warning shot was an unlawful act was simply never an issue in the case.  Defence counsel, who had requested that this theory of liability be left to the jury, raised no objection to the directions given. [42] Finally, it seems to me that even if the charge was deficient, there was no substantial wrong or miscarriage of justice.  The way that the charge to the jury was structured, the jury would only reach unlawful act manslaughter based on the warning shot if they had concluded that the appellant did not fire the fatal shots.  Having convicted of murder, it is apparent that the jury was satisfied beyond a reasonable doubt that the appellant fired the fatal shots. [43] This is not a case like R. v. Haughton , [1994] 3 S.C.R. 516, where the court was unwilling to reason back from the jury’s verdict convicting of the full offence where an included offence was not left to the jury.  As Sopinka J. said in Haughton : The application of s. 686(1)(b)(iii) of the Criminal Code , R.S.C. 1985, c. C-46, requires the court to consider whether a jury properly instructed could, acting reasonably, have come to a different conclusion absent the error. In applying this test the findings of the jury in the case under appeal may be a factor in determining what the hypothetical reasonable jury would have done, provided those findings are not tainted by the error. In cases in which an included offence is not left with the jury, a conviction by the jury of the more serious offence cannot generally be relied on by reason of the fact that it may very well be a reaction against a complete acquittal. There is an apprehension that the jury convicted because they had no other alternative than acquittal and acquittal was unpalatable. In this case, the jury had an alternative: they could have convicted of manslaughter. It cannot be said that it did not do so by reason of the failure to charge them by reference to the objective standard of liability with respect to manslaughter. In convicting of murder the jury must have found that the appellant had subjective foresight of death. It is impossible to hold that they came to this conclusion because they were unable to conclude the appellant had subjective foresight of bodily harm.  [Emphasis added.] [44] In my view the jury’s verdict was not tainted by the alleged error.  In this case, the jury had two routes to manslaughter; two bases to avoid the unpalatable choice of a complete acquittal.  The complaint here really amounts to a submission that it would have been too easy for the jury to have convicted of manslaughter.  Since the jury convicted of murder, the alleged misdirection respecting the warning-shot route to manslaughter was of no moment. (5)       Misdirection with respect to the weapons offences [45] This final ground of appeal relates to the summary manner in which the trial judge dealt with the weapons offences.  The appellant submits that the trial judge directed verdicts of guilty with respect to the weapons offences.  Like the previous ground of appeal, this ground of appeal is founded on the theory that the appellant did not fire the fatal shots.  The appellant’s submission on these counts rests on the proposition that the appellant did not bring the gun to the altercation, that he took the gun from Antonucci to keep the peace and that he did not fire the fatal shots.  The appellant’s own evidence that he drew the gun and fired on the unarmed victim coupled with the jury’s finding that he fired the three fatal shots, renders any possible error of no consequence. The Defence of Accident [46] In oral argument, counsel for the appellant raised a further ground of appeal; that the trial judge erred in failing to leave the defence of accident.  There are two concerns with this ground of appeal.  First, in my view, there is no air of reality to the defence of accident.  Second, in any event, based on the charge to the jury, if the jury had any doubt that the gun discharged accidentally, they would only have convicted of manslaughter.  Given that the jury rejected both routes to manslaughter, it can safely be said that the jury had no doubt that the appellant intentionally discharged the gun. [47] The defence of accident, raised for the first time on appeal, is based on the theory that even if the jury accepts that the appellant was the shooter of the fatal shots, it is possible that the gun went off accidentally as the appellant fought with the deceased.  That defence counsel did not seek to have this defence put to the jury is not, of course, fatal to this ground of appeal, provided there is an air of reality to the defence: R. v. Mathisen (2008), 239 C.C.C. (3d) 63 (Ont. C.A.) at para. 93.  However, there is no air of reality to this theory; it would require a finding that the gun discharged accidentally three times, into the deceased, during the course of this struggle.  It is inconsistent with all of the accounts given by all the witnesses, especially the independent witness, Heather-Anne Ference. [48] Counsel for the appellant relies upon the version of events given by Mr. Pangborn and Mr. Antonucci to support an accident defence. However, Mr. Pangborn only testified about a struggle before the appellant fired the warning shot.  There is nothing in his evidence that speaks to the manner in which the three shots that hit the deceased occurred. Mr. Antonucci’s evidence also does not assist. He testified to hearing three shots. The first shot he heard may have been the warning shot. In examination in-chief, he testified that the second shot occurred during what he described to be a “scuffle”. But, the third shot went off when the scuffle was over and both men were standing. In cross-examination, he testified that the last two shots may both have occurred when the two men were standing after the scuffle. In fact, defence counsel suggested to Mr. Antonucci that both shots were fired when the two men were standing. Mr Antonucci said he was not sure. [49] In any event, any doubt that the shots were fired accidentally would have translated into a verdict of manslaughter.  The jury was charged that if the appellant did not have the intent for murder he could only be convicted of manslaughter.  If indeed the jury had a reasonable doubt that the appellant discharged the gun three times accidentally, he could not have had the intent for murder. [50] I would not give effect to this ground of appeal. DISPOSITION [51] Accordingly, I would dismiss the appeal from conviction. Signature:      “M. Rosenberg J.A.” “I agree R. G. Juriansz J.A.” “I agree H. S. LaForme J.A.” RELEASED: “MR” AUGUST 10, 2011

Tuesday 20 May 2008 LORD JUSTICE MOSES: I will ask Sir Richard Curtis to give the judgment of the court. SIR RICHARD CURTIS: The three appellants before us this morning appeal by leave of the single judge against sentences passed by Her Honour Judge Goddard at the Central Criminal Court following a trial. The sentences were passed on 11 January 2008. The first appellant is Mamoon Hussain, 21 years of age then and 22 now, born on 19 September 1985. He has three previous convictions for violence: assault occasioning actual bodily harm in 2004 and 2005, with assault and violent disorder accompanying those offences when he received a custodial sentence; threatening behaviour and two assaults which also resulted in a custodial sentence. The second appellant is Delwar Hussain, born on 19 October 1986, then aged 20, now aged 21. He has three previous convictions for violence (all of threatening behaviour) in 2005 and 2006 for which in each case he received community sentences. The last appellant is Sodrul Islam, born on 4 November 1984, 23 years of age. He has one previous conviction for dishonesty as a juvenile but none for violence. The facts of the case are as follows. On 11 April 2006 a group of young people, three men and two women, were making their way home on foot after a pleasant evening out when, on the Clichy Estate, near Shirley Street in East London, they were confronted by eight or nine young Asian men who taunted and abused them. Much of the abuse was racist. This turned into a full-scale attack without reason or pity. The attackers were armed and those attacked, defenceless. One of the Asian group was armed with a dar (a type of machete used in Bangladeshi cooking). With this implement he hit the principal victim, John Payne, whose head was cut open. His skull was fractured, causing fragments of bone to penetrate his brain tissue. Not content with the results of this terrible injury, others of the group attacked Mr Payne, then senseless on the floor, kicking him and striking him. The women in the group were also struck. The main offender then attacked another victim, Danny Curran with the dar. He struck him on the head, causing a severe head wound, but by merciful chance without inflicting the kind of severe, permanent and life-threatening injuries that had been caused to Mr Payne. Fortunately, one of the young women in the group managed to call the police. All three appellants were arrested in nearby streets. Delwar Hussain was found to be drunk. Each appellant was clearly implicated by identification evidence from witnesses and the considerable amount of blood found on him. The jury equally rejected their individual claims that other people were responsible for these attacks and convicted them of the attempted murder of Mr Payne (count 1), wounding with intent on Mr Curran (count 3), and also of violent disorder (count 4). Concurrent sentences of 18 years' imprisonment for attempted murder, 10 years' imprisonment for wounding with intent and four years' imprisonment for the violent disorder offence created by the general violence in which they involved themselves that night were passed by the trial judge. The judge proceeded to sentence on the basis, despite counsel's submissions, by reference to R v Ford [2006] 1 Cr App R(S) 36 at page 204, [2005] EWCA Crim 1358 That case concerned two counts of attempted murder by the appellant shooting thrice at the victims in cold blood. A sentence of 30 years' imprisonment concurrent on each count was imposed. Having regard to the statutory framework created by the Criminal Justice Act 2003 there was a question as to when the appellant would be released and the kind of release that would occur, which is absent from these appeals. We set that matter on one side. In Ford another division of this court considered that 30 years was an appropriate starting point if murder had been committed by any one of the cold-blooded shootings since "the completed offence would have come within the category of a particularly high seriousness" (see Schedule 21, paragraph 5(1) of the 2003 Act). In the instant case we have regard to five of the findings of the judge as follows: (1) None of the appellants was the principal offender who wielded the dar and injured both victims so seriously. (2) The case against each of the appellant was based upon joint enterprise. The judge said, "You joined in realising that the axe would be used and the man with the axe might kill .... whether you agreed with it or not". (3) The attack was not premeditated (sentencing remarks at page 5A). (4) These appellants were not responsible for the words expressing hatred on the grounds of race which preceded and precipitated the violence used by the group. (5) The judge found that it was not appropriate to sentence any of the appellants under the new provisions of indefinite imprisonment (or detention) reserved for dangerous criminals as found under the new Act. We agree with the submissions of counsel that Ford was not the appropriate route to sentence in this case. It cannot be said that this offence, shocking as it is, is of particularly high seriousness. We therefore look at the matter afresh. It is our view, bearing in mind that there is certainty about release dates in each of these cases (which distinguishes this case from Ford), that the appellants will be released at the halfway point (see section 244 of the 2003 Act). We consider that on count 1 the sentence was too high in each case. The correct sentence, in our judgment, is one of 15 years' imprisonment. We reach that result having regard to the five factual findings of the judge to which we have referred and taking into account the factor to which Ford points, that a case of attempted murder requires the sentencing judge to have regard to what would have been the appropriate sentence had the offence been one of murder. Each counsel has attacked the sentence of ten years' imprisonment for the wounding with intent. We agree with the thrust of the submissions. We have not found it helpful to be referred to a selection of sentences passed for offences committed under section 18 of the Offences against the Person Act 1861. Section 18 is a particularly difficult area of sentencing and sentence is very largely driven by the facts of each case. It is within our knowledge that there are many other cases, particularly recently, where higher sentences have been passed than those indicated in the selection we have received from counsel. Having regard to the facts of this case, we consider that the appropriate sentence for the offence of wounding with intent is one of eight years' imprisonment in each case. Accordingly, in each case we quash the sentence of 18 years' imprisonment imposed below on count 1 and substitute for it one of 15 years' imprisonment; and we quash the sentence of 10 years' imprisonment on count 3 and substitute for it one of eight years' imprisonment, those sentences to run concurrently. The sentence of four years' imprisonment on count 4 remains unaltered. The time that the appellants have served on remand will count towards their sentences.

Leave granted. Heard learned companynsel for the parties. The appellant herein, Har Pyari, was a companyheir along with her two sisters to the estate of their father. One of the sisters separated but the other sister Ram Pyari and the appellant companytinued to be together in possession and ownership of their joint holding. It transpired that proceedings under the U.P. Imposition of Ceiling on Land Holdings Act, 1960 were taken to determine the excess land of the right holder. Only Ram Pyari was associated in the proceedings. No numberice was sent to Har Pyari, appellant. The procedural illegality apart, the property of the appellant was taken to be as if belonging to Ram Pyari and excess area to the tune of 3.22 acres was ordered to be taken away by the State. Since the appellant was number in the know of the order as she had never been served the numberice and associated in the proceedings, she only awoke when she came in the clutches of the State when asked to surrender the excess land. Her objection to such companyrse was met with resistance by the State and its functionaries which has led her ultimately to this Court after having exhausted all her remedies in the hierarchy. Her claim was rejected basically on the ground of being time-barred and number on merits. As we have narrated the facts above, it would be a case of grave injustice to the appellant that she be asked to surrender the excess area merely on the ground that she had failed to object to the proceedings at the appropriate time forgetting that numberone served her with any numberice for the purpose and it companyld number be attributed that she had otherwise known.

Judgment of the Court (Fifth Chamber) of 29 June 1988. - C. Deville v Administration des impôts. - Reference for a preliminary ruling: Tribunal de grande instance de Lille - France. - National taxes levied in breach of Community law - Limitation of proceedings for recovery after a judgment of the Court. - Case 240/87. European Court reports 1988 Page 03513 Summary Parties Grounds Decision on costs Operative part Keywords Community law - Direct effect - National taxes incompatible with Community law - Recovery - Introduction of a national procedural rule aimed specifically at hindering recovery - Not permissible Summary A national legislature may not, subsequent to a judgment of the Court from which it follows that certain legislation is incompatible with the Treaty, adopt a procedural rule which specifically reduces the possibilities of bringing proceedings for recovery of taxes which were wrongly levied under that legislation . Parties In Case 240/87 REFERENCE to the Court under Article 177 of the EEC Treaty by the tribunal de grande instance ( Regional Court ), Lille, for a preliminary ruling in the proceedings pending before that court between Christian Deville, residing in Bachy ( France ), and Administration des impôts ( Tax Administration ), in the person of the directeur des services fiscaux ( Chief Tax Inspector ) for the département du Nord, Lille ( France ), on the interpretation of the general principles of Community law governing the repayment of national taxes levied in breach of Community law, THE COURT ( Fifth Chamber ) composed of G . Bosco, President of Chamber, U . Everling, Y . Galmot, R . Joliet and F . Schockweiler, Judges, Advocate General : Sir Gordon Slynn Registrar : H . A . Ruehl, Principal Administrator after considering the observations submitted on behalf of Christian Deville, the plaintiff in the main proceedings, by J . Durand, avocat, in the written procedure and by M . Desurmont, avocat, in the oral procedure, the French Government by R . de Gouttes and G . de Bergues, acting as Agents, in the written procedure and by G . de Bergues, acting as Agent, and P . Nachbauer, expert, in the oral procedure, the Irish Government by A . Plunkett, acting as Agent, in the oral procedure the Commission of the European Communities by J . F . Buhl, acting as Agent, in the written and oral procedure, having regard to the Report for the Hearing and further to the hearing on 19 April 1988, after hearing the Opinion of the Advocate General delivered at the sitting on 31 May 1988, gives the following Judgment Grounds 1 By a judgment of 29 July 1987, which was received at the Court on 3 August 1987, the tribunal de grande instance ( Regional Court ), Lille, referred a question to the Court for a preliminary ruling under Article 177 of the EEC Treaty on the interpretation of the general principles of Community law governing the repayment of national taxes levied in breach of Community law . 2 The question was raised in proceedings between Mr Deville and the Tax Administration concerning reimbursement of the special fixed tax that he had paid in respect of his car in 1982, a tax which the Court subsequently declared to be contrary to Article 95 of the EEC Treaty in its judgment of 9 May 1985 Case 112/84 Humblot v Directeur des services fiscaux (( 1985 )) ECR 1376 . 3 In order to comply with that judgment the French legislature adopted Article 18 of Law No 85-695 of 11 July 1985 laying down various provisions of an economic and financial nature ( Journal officiel de la République française of 12 July 1985, p . 7855 ). That provision abolished the special fixed tax and replaced it with a differential tax based on a vehicle' s power-rating for tax purposes . It also enables taxpayers to obtain a refund of the difference between the amount of special tax paid and that of the new differential tax corresponding to the power-rating for tax purposes of their car . 4 The second paragraph of Article 18-V specified the time-limit for submitting claims after the abovementioned judgment as follows : "Taxpayers who submit a claim after 9 May 1985 may obtain a tax refund determined under the same conditions if the claim is made within the time-limit laid down in Article R 196-1-b of the livre des procédures fiscales ( Tax Procedure Code ), which begins to run on the date on which the special tax was paid ." 5 Article R 196-1 of the Tax Procedure Code is worded as follows : "To be admissible, claims (...) must be submitted to the administration not later than 31 December of the second year following the year, as the case may be, ( a ) (...); ( b ) in which the contested tax was paid; ( c ) in which the event giving rise to the claim occurred ." 6 Mr Deville is the owner of a car of Italian manufacture which has a power-rating for tax purposes exceeding 16 CV . On 10 December 1982 he paid the special fixed tax in respect of that vehicle . On 31 December 1985, that is to say after the judgment which held that the special tax was incompatible with Article 95 of the Treaty, Mr Deville lodged a claim for a refund of the difference between the amount of the special tax paid and the amount of the maximum differential tax levied on cars manufactured in France . 7 The Tax Administration dismissed the claim on the ground that it was out of time because, under the combined provisions of the second paragraph of Article 18-V of the Law of 11 July 1985 and Article R 196-1-b of the Tax Procedure Code, the claim ought to have been submitted by 31 December 1984 at the latest ( that is to say by 31 December of the second year following the year in which the contested tax was paid ). 8 Mr Deville challenged that decision before the tribunal de grande instance, Lille . He contended that his claim was not out of time because it had been submitted with the time-limit laid down in Article R 196-1-c, that is to say not later than 31 December of the second year following the year in which the event giving rise to the claim occurred . That event was the delivery of the judgment of 9 May 1985 ( Humblot, cited above ). Mr Deville further maintained that if his claim was declared to be out of time, the effects ratione temporis of the Humblot judgment, which was applicable even to situations which arose before it was given, would be adversely affected . 9 The tribunal de grande instance, Lille, therefore decided to put the following question to the Court : "Is it in conformity with the general principles of Community law to impose a time-limit, as does the second paragraph of Article 18-V of Law No 85-695 of 11 July 1985, on the effects of the retroactive abolition of the special tax on vehicles with a power-rating for tax purposes exceeding 16 CV which was declared contrary to the provisions of Article 95 of the Treaty of Rome by the judgment of the Court of 9 May 1985 in Case 112/84?" 10 Reference is made to the Report for the Hearing for an account of the written observations submitted by Mr Deville, by the French Government and by the Commission . 11 It should be borne in mind that if a national tax affecting a taxpayer who cannot pass it on to others is levied in breach of the Treaty, the obligation of the Member State in question to reimburse him follows from the direct effect of the Community provision which has been infringed . 12 The Court has consistently held that in the absence of Community rules concerning the refunding of national taxes which have been wrongly levied, it is for the domestic legal system of each Member State to designate the courts having jurisdiction and to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which citizens derive from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature, and may not make it impossible in practice to exercise rights which the national courts have a duty to protect ( judgments of 16 December 1976 in Case 33/76 REWE v Landwirtschaftskammer Saarland (( 1976 )) ECR 1989 and Case 45/76 Comet v Produktschap voor Siergewassen (( 1976 )) ECR 2043; judgment of 27 March 1980 in Case 61/79 Amministrazione delle Finanze dello Stato v Denkavit (( 1980 )) ECR 1205; judgment of 9 November 1983 in Case 199/82 Amministrazione delle Finanze dello Stato v San Giorgio (( 1983 )) ECR 3595 ). 13 It follows from the foregoing that a national legislature may not, subsequent to a judgment of the Court from which it follows that certain legislation is incompatible with the Treaty, adopt a procedural rule which specifically reduces the possibilities of bringing proceedings for recovery of taxes which were wrongly levied under that legislation . 14 In this case, the issue between Mr Deville, the plaintiff in the main proceedings, and the French Government is whether the second paragraph of Article 18-V of the Law of 11 July 1985 reduces the possibilities of bringing proceedings for recovery which would otherwise have been available . 15 Mr Deville claims that in referring to the time-limit laid down in Article R 196-1-b of the Tax Procedure Code (" not later than 31 December of the second year following the year (...) in which the contested tax was paid ") the provision in question prevents him from availing himself of the time-limit laid down in Article R 196-1-c (" not later than 31 December of the second year following the year in which the event giving rise to the claim occurred "). The event giving rise to Mr Deville' s claim was the delivery of the judgment on 5 May 1985 ( Humblot, cited above ). 16 The French Government contended initially that the time-limit for claims laid down in Article R 196-1-b, to which the provision in question refers would have been applicable even in the absence of that provision . That is to say, it argued that a judgment does not constitute an event for the purposes of Article R 196-1-c, and the time-limit laid down in Article R 196-1-b was thus the sole possible time-limit . In reply to a question put by the Court, the French Government acknowledged , however, that in the absence of the provision in question the time-limit laid down in Article R 196-1-c would in fact have been applicable, since the publication of the Law of 11 July 1985 constituted an event for the purposes of Article R 196-1-c . 17 It must be borne in mind that the Court has no jurisdiction to interpret national law . It is for the national court to determine whether the second paragraph of Article 18-V of the Law of 11 July 1985 reduces the possibilities of bringing proceedings for recovery which would otherwise have been available . 18 The reply to the question referred to the Court by the tribunal de grande instance, Lille, must therefore be that a national legislature may not, subsequent to a judgment of the Court from which it follows that certain legislation is incompatible with the Treaty, adopt a procedural rule which specifically reduces the possibilities of bringing proceedings for recovery of taxes which were wrongly levied under that legislation . It is for the national court to determine whether the procedural rule at issue reduces the possibilities of bringing proceedings for recovery which would otherwise have been available . Decision on costs Costs 19 The costs incurred by the French Government, the Irish Government and the Commission of the European Communities, which submitted observations to the Court, are not recoverable . As 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 ( Fifth Chamber ), in answer to the questions submitted to it by the tribunal de grande instance, Lille, by a judgment of 29 July 1987, hereby rules : A national legislature may not, subsequent to a judgment of the Court from which it follows that certain legislation is incompatible with the Treaty, adopt a procedural rule which specifically reduces the possibilities of bringing proceedings for recovery of taxes which were wrongly levied under that legislation . It is for the national court to determine whether the procedural rule at issue reduces the possibilities of bringing proceedings for recovery which would otherwise have been available .

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1351 of 1976. From the Judgment and Order dated 24.11. 1975 of the Andhra Pradesh High Court in A.S. No. 691 of 1972. V.S.N. Chari for the Appellant. Subba Rao and A.D.N. Rao for the Respondents. The Judgment of the Court was delivered by RAMASWAMY, J.This appeal by special leave arises against the Division Bench judgment dated November 24, 1975 in A.S. No. 691 of 1972 of the A.P. High Court fixing the market value Rs. I0 per square yard. The facts lie in a short companypass are stated thereunder. By numberification under section 4 1 of the Land Acquisition Act 1894 in short the Act was published in the State Gazette on November 21, 1963 to acquire 5 acres-589-1/3 sq. yards in T.S. No. 981, Block No. 34 of Waitair Ward, Vishakapatnam for a housing scheme. The Collector awarded at Rs. 1.58 per sq. yard and on reference, the Civil Court enhanced the companypensation to Rs. 10 per sq. yard with solatium at 15 per cent and interest at 4 per cent. The respondent claimed Rs. 12 per sq. yard. On appeal and cross appeals the High Court companyfirmed the award and dismissed the appeal as well as cross objections for enhancement to Rs. 12 per sq. yard. Two companytentions have been raised by Shri Narsimahachari, the learned companynsel for the appellant. Under Ex. B. 6 dated August 3, 1961 under Ex. B-7 dated Sept. 5, 1961 and Ex. B-8, dated Sept. 8, 1961 the respondent purchased one acre-1936 sq. yards in each documents in the same T.S. No. 981 -0.42 p. per sq. yard. He sold on January 24, 1963 in an extent of one acre under Ex. B. 10 Rs.5 per sq. yard. Therefore, the aforesaid sale deeds, Ex. B. 6, B. 7, B. 8 and B. 10 will reflect the prevailing market value of the land in question. The Trial Court and the High Court companymitted grievous error in placing reliance on a decision of the High Court in A.S. No. 191 of 1967 dated November 11, 1970 awarding Rs. 10 per sq. yard in respect of 6,209 sq. yards in T.S. No. 1008, Block No. 39, Waitair Beach Road which was acquired under a numberification dated March 19, 1961 for the purpose of Caltex Oil Refinery. The price fixed therein does number reflect the companyrect market value while the bona fide sale deed of purchase and sale by the respondents relating to the acquired land are available on records and form companyrect basis. The companyrts below companymitted grave error of law in companypletely excluding those sale transactions and relying upon that judgment. We find force in the companytention, though Shri Subba Rao, learned companynsel for the respondent vehemently resisted, it. It is settled law by catena of decisions that the market value postulated in s. 23 1 of the Act designed to award just and fair companypensation for the lands acquired. The word market value would postulate price of the land prevailing on the date of the publication of the numberification under section 4 1 . This Court repeatedly laid the acid test that in determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value. For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price. The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence. In its absence the price paid for a land possessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the numberification would supply the data to assess the market value. It is number necessary to cite all the decisions suffice to state that in a recent judgment in Periya Pareekanni Rubbers Ltd. v. State of Kerala, 1990 Supp. 1 SCR 362 a bench of this Court, to which one of us K.R.S., J., was a member surveyed all the relevant precedents touching the points. In the light of the settled legal position let us companysider whether the High Court and the Civil Court are justified in excluding the sale deeds companypletely and to place reliance on another judgment of the Division Bench of the High Court of A.P. Admittedly, the claimant is a vendee in Ex. B. 6 to B. 8 -0.42 paise. In a span of one year and four months, they sold Rs.5 per sq. yard It is companymon knowledge that proposal for acquisition would be known to everyone in the neighbourhood, in particular, to the owners of the property and it is number uncommon that sale transactions would be brought into existence before the publication of s. 4 1 numberification so as to form the basis to lay higher claim for companypensation. We do assume that Ex. B. 10 is a genuine and bona fide sale transaction. In respect of one acre of the land in the self-same land when sold at Rs.5 per sq. yard, would it fetch in a short period of nine months, double the market value, namely. Rs. 10 per sq. yard. We have numberdoubt that it would number get that price for 5 acres and odd area. It is undoubted that in respect of a numberification of 1961 in which another T.S. number in the locality, namely, T.S. No. 1008, ultimately, the High Court awarded Rs. 10 per sq. yard. Perhaps had there been numberbona fide or genuine sale transaction relating to the selfsame land, the reliance placed on that judgment may be justified but exclusion of bona fide and genuine sale transactions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal. When the claimants themselves sold as a willing seller of an acre of land Rs.5 per sq. yard large extent of five acres and odd under acquisition, if it is offered to be sold as a block, it would number fetch higher rate but surely be negotiated for a lesser rate if number the same market value Rs.5 due to time lag of nine months. No attempt was made by the respondent to explain under what circumstances they came to sell their lands Rs.5 per sq. yard when they expect higher value Rs. 10 per sq. yard. May be the payment of Rs. 10 per sq. yard, be wind fall to the owner of the land in T.S. No. 1008 Taking the totality of the facts and circumstance, we hold that the High Court companymitted grave error to companypletely ignore the sale transactions of the lands under acquisition. In view of the time lag we have numberhesitation to companyclude that the prevailing market value of the land as on the date of the numberification would be Rs.6 per sq. yard. It is next companytended by Shri Narsimahachari that when a large extent of land was acquired for a housing scheme, at least 1/3 of the land should be deducted towards laying the roads, setting up parks, drainage and other amenities. The High Court companymitted manifest error in omitting to deduct 1/3 of the land. Shri Subba Rao, the learned companynsel for the respondent companytended that the High Court had numbered this companytention of the appellant and companysidered that the market value of the land would be Rs. 12 per sq. yard and after giving the deduction of 1/3 it would companye to Rs. 10. The reasoning of the High Court is proper and warrants numberinterference. In support thereof he placed reliance in Spl. Tehsildar, Vishakapatnam v. Rednam Dharma Rao Ors., C.A. No 4187 of 1982, dated July 17, 1990 wherein this Court had upheld the deduction of 1/5 from the market value towards developmental charges. It is settled law that the High Court and the Reference companyrt when made wrong application of a principle or important points effecting valuation has been over looked or misapplied, this Court would under Art. 136 companyrect the same, vide The Spl. Land Acquisition Officer, Bangalore v.T. Adinarayan Setty, 1959 Suppl. 1 S.C.R. 404 Dattatrayaya Shankarbhat Ambalgi and Ors. v. The Collector of Sholapur and Anr., AiR 1970 SC 850-1971 3 S.C.C. 431 The Dollar Co., Madras v. Collector of Madras, 1975 Supp. SCC 403 and Padma Uppal Etc. v. State of Punjab Ors., 1977 1 SCR 329. In Tribeni Devi Ors. v. Collector of Ranchi, 1972 3 C.R. 208 at 2 13, this Court held that in order to develop that area at least the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities. On this basis the value of the land at Rs.2,08,135.70 per acre would, after the deduction of 1/3 companye to Rs. 1,38,757 per acre. In Smt. Kaushalya Devi Bogre Ors. etc. v. The Land Acquisition Officer, Aurangabad, 1984 2 S.C.R. 900 this Court held that deduction of 1/3 was held to be reasonable. In Vijay Kumar Motilal v. State of Maharashtra, 1981 2 SCC 7 19 i/3rd was deducted towards developmental charges in undeveloped area. In Vijaysingh Liladhar v. Special Land Acquisition Officer, 1988 3 SCC 760 the deduction of i/4th by the High Court which was number challenged in this companyrt was upehld. In Spl. Land Acquisition Officer, Bangalore v. T. Adinarayan Setty, supra, deduction of 25 per cent was held to be reasonable. It is to be numbered that in building Regulations, setting apart the lands for development of roads, drainage and other amenties like electricity etc. are companydition precedent to approve lay out for building companyonies. Therefore, based upon the situation of the land and the need for development the deduction shall be made. Where acquired land is in the midst of already developed land with amenities of roads, drainage, electricity etc. then deduction of 1/3 would number be justified. In the rural areas housing schemes relating to weaker sections deduction 1/4 may be justified. On that basis, this companyrt in Dharma Raos case upheld deduction of 1/5 because the owner while obtaining the lay out had already set apart lands for road and drainage. Therefore, deduction of 1/3 would be reasonable.

J U D G M E N T Arising out of SLP Civil No. 2901/2002 G. Balakrishnan, J. Leave granted. The claimants in a motor accident claim are appellants before us. They are the legal heirs of one Rajashekhar Kasture who died in a motor accident. The deceased Rajashekhar Kasture was aged about 24 years at the time of his death. He was employed as a Munim in Avinash and Co. On 20.7.1996, when he was travelling in a lorry to bring sugar for his employer, the lorry met with an accident and he fell down and died on the spot. The claimants preferred claim companytending that he was the only earning member and was earning Rs. 3000/- p.m. The respondent No. 2 namely, the lorry owner companytended that the deceased was working only as a office boy and was having a salary of Rs. 600/- p.m. To support his plea, RW1, the owner of the companypany was also examined. The Tribunal after companysidering the evidence on either side held that the salary of the deceased must have been around Rs. 1200/- p.m. and by deducting 1/3rd for his personal expenses, the monthly dependency of the claimants must have been Rs. 800/- p.m. Taking the annual income as Rs. 9600/-, the total companypensation was fixed at Rs. 1,53,600/- and an award was passed in favour of the claimants. Aggrieved by the same, the second respondent preferred an appeal before the High Court of Karnataka and the High Court reduced the companypensation to Rs. 81,600/- under the heading loss of dependancy. The Judgment of the High Court is challenged before us. We heard learned Counsel on either side. The High Court companysidered the evidence of RW1, the partner of the Avinash and Company with whom the deceased was employed. RW1 deposed that the monthly salary of the deceased was Rs. 600/-. RW1 had chosen to produce some receipts purportedly signed by the deceased but he cleverly withheld the salary register maintained by the companypany for the relevant period. The receipts were number originally produced but later he produced them and the Tribunal rightly declined to take numbere of the same. During the time of cross-examination, he admitted that the persons who were similarly employed were being paid Rs. 1,500/- p.m. It is also difficult to believe that the companypany would employ a person with such a meagre amount of Rs. 600/- p.m. It may also be numbericed that the companypany under the management of RW1 was having 4 to 5 lorries and about 30 workers were employed under them. He must have been keeping some documents in respect of payment of salary to his workers but such documents were number produced. The Tribunal had companysidered the evidence in detail and came to a rational companyclusion regarding the income of the deceased. The learned Single Judge without companysidering the evidence of RW1 simply brushed aside the whole evidence and accepted the statement of RW1 solely on the ground that the employer himself had spoken regarding the salary and it must have been taken as companyrect.

N. KHARE, J. Leave granted. There is an organisation known as Vishwa Bharata Seva Samithi hereinafter referred to as the Samithi . The Samithi is running a Higher Secondary School hereinafter referred to as the Institution in the town of Belgaum, Karanataka. The institution is imparting education upto higher secondary level. The institution is a private government aided school, recognised by the Government of Karnataka. The method of appointment and companydition of services of the teachers and employees working in the institutions are governed by the Karnataka Private Educational Institutions Discipline and Control Act, 1975 hereinafter referred to as the Act and the Rules framed thereunder known as the Karnataka Private Educational Institutions Discipline and Control Rules, 1978 hereinafter referred to as the Rules . In the year 1984, a post of Assistant Teacher in the institution fell vacant. The Management of the institution advertised the said vacancy and invited applications for appointment to the said post. Appellant No. 1, and others, in response to the said advertisement submitted applications and for that purpose a Selection Committee was companystituted in accordance with the provisions of the Act and the Rules framed thereunder. Appellant No. 1 was selected and recommended by the Selection Committee for appointment as Assistant Teacher. The Management, by a resolution dated 24.6.85, resolved to appoint appellant No. 1 on probation for a period of one year. Consequently, appellant No. 1 joined the service at Madhyamika Vidyalaya Mattiwade w.e.f 1.7.85 on a pay scale of Rs. 750/- to Rs. 1,500/-. It is alleged that appellant No. 1 companytinued to teach till June 1994 when he was prevented by the Management of the School from performing his teaching assignment. Similarly, appellant No. 2 after having been selected by the Selection Committee companystituted under the provisions of the rules was appointed as Assistant Teacher in the institution on probation for a period of one year. It is alleged that appellant No. 2 companytinued to work, but subsequently he was also prevented from performing his teaching duties. In such circumstances, the appellants herein, preferred separate appeals before the Tribunal companystituted under the Act. The Tribunal allowed both the appeals and directed for reinstatement of the appellants. Aggrieved, the Management filed two Civil Revision Petitions before the High Court of Karnataka. The case of the Management, inter alia, was that, since appellant No. 1 was absent from 25.11.1991 to 1.6.1992, 1.7.92 to 6.7.92, 27.7.92 to 27.7.92, 3.8.92 to 14.8.92 and thereafter from 15.8.92 onwards remained absent and, as such, the services of the appellant stood automatically terminated and that the appellant was appointed on probation subject to the approval of Director of Public Instructions, Belgaum and there being numberapproval to the appointments, the appellants have ceased to be teacher in the institution. However, the case of the appellants before the High Court was that they were appointed on probation and after the expiry of the probationary period, they automatically became regular teachers and since numberorder of termination having been passed in accordance with the provisions of the Act and Rules framed thereunder, the action of the Management in number permitting the appellants to perform their duties was wholly illegal and arbitrary. It was also their case that there being numberprovision either under the Act or the Rules for obtaining approval for appointment as Assistant Teacher, the appointments of the appellants were in accordance with law. The High Court was of the view that since the Management did number obtain the approval of the companycerned Inspecting Officer in regard to appointments of the appellants as Assistant Teacher, the appellants have ceased to be teacher in the institution. In that view of the matter, the Civil Revision Petitions filed by the Management were allowed and the order of the Tribunal was set aside. It is against the said judgment and order of the High Court, the appellants have preferred these appeals by way of Special Leave Petitions. Learned companynsel appearing for the appellants urged, firstly, that there being numberrequirement either under the Act or Rules for the Management to obtain approval of the Head of the Department in respect of the appointments of the appellants as Assistant Teacher in the institution, the view taken by the High Court is erroneous. Secondly, that the method of appointment and companyditions of service of teachers in private government aided institution being governed by the provisions of the Act and Rules framed thereunder, any requirement of approval of regular appointments of teachers under the number-statutory administrative orders companytained in grant-inaid companye would number make the appointments of the appellants invalid. Thirdly, that the appellants having been appointed on probation, the appellants automatically became companyfirmed teachers of the institution after companypletion of their probationary period and fourthly, that, in any case, there being numberprovision under the Rules for automatic termination of service in the event of the teacher being absent, the alleged automatic termination of service of the appellants is illegal. Whereas, learned companynsel appearing for the respondent urged that the grant-in-aid rules, though may be administrative in nature, it provides for requirement of obtaining approval of the Inspecting Officer in the matter of appointment of teachers in the government aided institutions and in the absence of such approval, the appointment of the appellants was nullity and they were number entitled to companytinue in service. On the argument of learned companynsel for the parties, the first question that arises for companysideration is whether there was any requirement of law for the Management to obtain approval in regard to appointment of teachers in the institution. Section 3 of the Act provides that subject to other provisions of the Act, the State Government, after previous publication of the rules may, by numberification, make rules in respect of matters relating to the companye of companyduct and companyditions of service of employees. Sub-section 3 thereof provides that every private government aided institution shall send intimation of having adopted the model rules or modified its rules companysistent with the rules framed by the State government to the Director of Technical Education or to an Officer number below the rank of a District Deputy Director of Public Instructions. Sub-section 4 of Section 3 further provides that where a private educational institution fails to take action as required, the rules as framed by the State government shall be deemed to have been adopted by such institution and they shall be the rules governing its employees. Section 6 provides for termination of service and procedure for imposing penalties. Section 15 provides that the State Government may by numberification and after previous publication, make rules to carry out the purposes of this Act. In exercise of power companyferred by Sections 3 and 15 of the Act, the Government of Karnataka has framed the rules. Rule 6 provides method of recruitment. It would be appropriate to reproduce rule 6 of the Rules which runs as under Method of recruitment. - 1 Any appointment arising for a period of more than three months in any institution shall be made by selection from among persons who had applied in pursuance of an advertisement in news papers Provided that an employee in one institution may be appointed in another institution under the same or different Management in accordance with rules approved by Government in respect of each category of institution. For the purpose of recruitment under subrule 1 the Board of management shall companystitute - a a selection companymittee for appointment of the teaching and number-teaching posts other than the post of the head of the institution companysisting ofthe President or the Head of the Board of Management or his numberinee the Head of the Department or his numberinee the Head of the Institution an educationist or an expert in the subject to which recruitment is to be made, to be selected by the Board of Management from a panel of names furnished by the Head of the Department. A perusal of Rule 6 would show that there is numberrequirement for Management to take any approval from the Head of the Department who is the Director of Public Instructions, in respect of regular appointment of a teacher selected by the Selection Committee companystituted under sub-rule 2 of Rule 6 of the Rules. Whereas, under sub-rule 5 of Rule 6, if the Management appoints any teacher for a period of 3 months or less, or for part time, such an appointment is required to have the approval by the Head of the Department. It appears that the omission to obtain approval of Head of the Department in case of a regular teacher under the rules is deliberate. Reason being that the Head of the Department himself or his numberinee sits in the Selection Committee and it is because of that reason, the approval of the Head of the Department in case of a regular appointment has been dispensed with under the rules. Whereas, if the appointment is made on a ad hoc basis by the Management for a period of 3 months or less, or for part time, the same is required to have the approval of the Head of the Department apparently for the reason that the Head of the Department or its numberinee is number party to the decision to make ad hoc appointment in the institution. We are, therefore, of the view that the rules do number companytemplate for obtaining approval of the Head of the Department i.e. the Director of Public Instructions where the appointment is to be made on the basis of the recommendation of Selection Committee companystituted under sub-rule 2 of rule 6 of the Rules. Learned companynsel appearing for the respondent urged that even if the rules do number provide for obtaining approval of the Head of the Department, in case of appointment of a regular teacher, the same is required under numberstatutory rule 16 of Grant-in-Aid Code for Secondary Schools. What he argues is that even though the rules companytained in the Code are number-statutory and are merely administrative instructions, yet they supplement the rules and, therefore, any breach of administrative or executive instruction will make the appointment of the appellants invalid. We numbericed earlier, the appointment and companyditions of service of teachers in private government aided institution are governed by the provisions of the Act and the statutory rules. The said provisions are selfcompanytained companye relating to the appointments of teachers in private aided institutions. The field relating to method of appointment of regular teacher in a government aided institution is fully companyered by the provisions of the Act and the rules and we do number find any provisions either in the Act empowering the Government to supplement the rules by executive instructions. It is numberdoubt true that if the Act had empowered the State Government to issue administrative instructions by way of supplementing the rules, the position would be different. In such a case, the Government would have power to fill up the gaps in the rules by issuing administrative instructions if the rules are silent on the subject provided the same is number inconsistent with the statutory rules already framed. In the present case, the Act does number empower the State Government to supplement the rules by issuing administrative instructions or orders. In the absence of such provision in the Act, it is number open to the government to supplement the rules by the executive orders. If we accept the argument of learned companynsel for the respondent, it would be repugnant to Sections 3 and 15 of the Act. The matter can be examined from another angle. Rule 16 of Grant-in- Aid Code for Secondary Schools runs as under General Conditions of aid- Grant-in-aid is permissible only to those institutions which have been recognised by the Department. It is subject to the following companyditions- The Management shall have deposited the stability fund as indicated in rule 9 d of Chapter III. The Management shall credit the prescribed fees companylected, into the Treasury as prescribed in rule 69. The other amounts companylected by way of grants, donations, interest on endowments, deposits, and other items realised by the institutions shall be credited to the accounts of the institution and shall be reflected in annual receipts and expenditure statement of the institution. Failure on the part of the Management or the Head of the Institution to companylect and to credit the fees so companylected to Government funds as directed above, may entail stoppage of grants and withdrawal of recognition. The Management shall maintain the account of the Institution and furnish monthly and other periodical returns to the Department in accordance with the prescribed rules. The Management shall get the accounts of the Institutions audited by an auditor number companynected with the management in any way, from the list of auditors approved by the Education Department. The Management shall keep the accounts of the Institution open to inspection and audit by Inspecting and other officers deputed by the Director or by the Accountant General or by their numberinees. vi a The Management shall appoint teachers and other staff of the Institution in accordance with the rules prescribed in this behalf and shall observe the companyditions of service prescribed therein. The Management shall make available the staff members selected by the Additional Director of Examinations for being utilized for purposes of Public Examinations companyducted by the Department or Board. Their period of absence in all such cases will be treated as on other duty and their salary during that period will be admitted for grant purposes. The Management shall report to and obtain the approval of the inspecting officer companycerned for all appointments and changes made in the staff of the institution. It shall be companypetent for the inspecting officer to prohibit the employment of any person who is number duly qualified or who, for any other reasons to be recorded in writing, is companysidered unfit to be on the staff. Persons who are suffering from companytagious diseases or serious physical defects should number be appointed by the Management as teachers in Schools. In doubtful cases a reference may be made to the inspecting officer companycerned and his instructions obtained. An appeal against the decision of the inspecting officer shall lie with the next superior authority whose decision shall be final. The aforesaid number-statutory rule was substituted in the Code by government order dated 17.6.67 and whereas the statutory Rules governing the method of appointment of teacher came to be published in the gazette on 31.1.78. It is, therefore, manifest that number-statutory Rule 16 was never intended to supplement the statutory Rules and, therefore, number applicable in the case of appointment of teacher in private government aided institutions. Yet, there is another reason why the number-statutory Rule 16 is number applicable in the case of appointment of teachers in the institution. The administrative instructions pertaining to grant-in-aid for secondary schools have been issued with the object of extending and improving institutions, and for that purpose a sum of money is annually allocated by the government for distribution as grant-in-aid to schools subject to observance to the companyditions specified therein. The companyditions embodies in Rule 16 of the grant-in-aid companye provide for the companyditions under which financial assistance would be made available to the Management of the institution by the government. If there is a breach of the companyditions of the grants-in-aid, it is open to the government either to suspend or cancel the financial grant to the institution. But, such breach of companyditions of the grant-in-aid companye would number make the appointment of a teacher in the institutions invalid when the method of appointment of teachers in the institution is fully companyered by the Act and the statutory rules. It is, however, true that for breach of administrative instructions which have numberstatutory force, a public servant or the person guilty of such a breach can be subjected to disciplinary action but the same cannot be pressed into service for action which has the effect of modifying the statutory rules. We are, therefore, of the view, that breach of numberstatutory Rule 16 would number render the appointments of appellant invalid. So far the second question that arises for companysideration is whether the appellants having been appointed on probation they would be deemed to have become regular teachers on expiry of probationary period, we are number inclined to go into that question in view of the fact that even though the appellants were probationers, their services companyld number be ceased to have effect either by number approval by the Head of the Department or by their remaining absent from their respective duties. There is numberprovision either in the Act or the Rules providing for automatic termination of services of a teacher on account of being absent without leave. If any teacher remains absent without any leave, it is open to the Management to terminate the services of such teachers only after companyplying with the provisions of the Act and the rules or principles of natural justice. In the present case, we do number find any provision either in the Act or Rules providing for automatic termination of service of a teacher in the event of a teacher remaining absent without leave. In the absence of such a provision in the Act or Rules, the alleged deemed termination of services of the appellants without giving any opportunity to the appellants was unlawful and deserves to be set aside. Before we part with the case, we would like to observe that we are in agreement with the view taken by the High Court that it is unbelievable that the appellants were number paid their salary for the last 10 years, as at numberpoint of time, the appellants had made any grievance either to the Head of the Department or to the Management in respect of number-payment of salary. If the appellants were number paid salary, they ought to have made representation to the Head of the Department or gone to a companyrt of law for recovery of arrears of salary which they did number do so. Therefore, they are number entitled to arrears of salary for the last ten years. Under such circumstances, we are of the view that the appellants are entitled to arrears of salary only for the last 3 years. In the present case, we also find that the management was guilty of wilful default and number-observation of Rules. Assuming there was requirement of obtaining approval of Head of the Department in regard to appointment of the appellants, which the management is number companytending, it does number appear to reason why management did number take any steps for obtaining approval of the Head of the Department and permitted the appellants to teach in the institution for long period of ten years and suddenly the management treats the services of the appellants having automatically terminated.

LORD JUSTICE THOMAS: The appellant, who appeals by leave of the Full Court in circumstances which we shall have to describe, was convicted of ten counts of making indecent photographs of children in the Crown Court at Reading before Mrs Recorder Arbuthnot and a jury. He was subsequently sentenced to a community order for 3 years and a sexual offences prevention order for 5 years. There are two points that arise in this case: (1) the necessity of compliance of the Criminal Procedure Rules and (2) an understanding of the importance of evidence. The facts may be briefly stated. On 3rd May 2007 the police executed a search warrant and seized two computers. One was a laptop. On it were 1307 indecent images at level 1. They were on files that had been deleted. It was not possible to say when they had been created, but the operating system of the computer showed that that system had been in use between March 2001 and January 2006. The prosecution also were able to show that a partial Internet profile history showed that browsers had visited five sites that might have contained such indecent images of children. Examination of retrieved web pages by a "Wayback Machine" showed that there were images on these websites shortly after dates when those websites were accessed. There was also an email found informing Steve Penner (the appellant's name) that his membership for "Forbidden-dreams", one of the pornographic sites, had expired. A link to "Forbidden dreams" was in the computer's list of favourites. A striking feature of this case is that the appellant declined to answer any questions in interview. He then did not give evidence. That was because the way in which the defence decided to conduct the case was to put the Crown to proof. The Criminal Procedure Rules have been in force in this country for some time. They have abolished what is known as "trial by ambush". Sometimes it appears that people do not appreciate that and the duties that arise at the Plea and Case Management Hearing (PCMH). The Recorder, in what we would commend as an excellent summing-up, identified five issues. First: were the photographs made? If a question had been asked about that at the PCMH, it would have been answered, as it was at the trial, that plainly the photographs were made. The second issue was: were they indecent? Again, if that had been asked at the PCMH, the answer would have been clear: they were. The third issue was: had they been made deliberately and intentionally? About that there could be no doubt. If that issue had been raised at the PCMH as it was the trial, there could have been little doubt about it. The fourth issue, which was the real issue in the case was: who made the photographs. If that issue had been raised at the PCMH, it would have been identified as the issue in dispute. The fifth issue was whether they were made in the United Kingdom. At the PCMH none of those issues were raised but, if they had been and if the counsel had been asked by the judge were the images made in the United Kingdom, plainly the answer, we are told, that would have been given was that there was no issue about that. We have been told by counsel today that it did not occur to him that there was such an issue in this case, until he asked the defence expert a question as to where the images were made. What happened at the trial was, after the Crown had called evidence to the effect which we have set about, a submission of no case to answer was made. Effectively two points were taken. First, there was no evidence that it was the defendant who made them, and secondly, the Crown had failed to prove they were made in the United Kingdom. That is the first time the issue as to where they were made was, we are told, raised. We shall come back to the significance of that in a moment. The Recorder rejected that submission and left the case to the jury on the issues that we have described. The jury convicted the appellant. The question was raised at the end of the summing-up about whether there was any evidence in relation to whether the computer was used inside or outside the United Kingdom and the learned Recorder correctly told them that there was no direct evidence. After the appellant had been convicted there was an application for leave to appeal, which was renewed to the Full Court. The Full Court granted it on this basis: "Mr Lynn, who represents the applicant here as he did below, submitted at the end of the prosecution case that there was no evidence to support first that it was the defendant who made the photographs and secondly that they had been made in the United Kingdom. The applicant is a Canadian national and there is some evidence to suggest that the computer may have been used whilst he was in Canada." Leave to appeal was granted on the basis that this court should have an opportunity of considering that last point in the light of the way the case had been left to the jury. It is, we regret to say, clear that leave to appeal in this case was granted under a misapprehension by this court. How it came about is not for us to say, but it appears to be the result of the way the case was put to them. It is clear from our examination of the evidence in this case that there was no evidence before the jury that this appellant had been to Canada or that the computer may have been used in Canada. The highest that a suggestion could have been made was that there was an application to an account called "post master", which gave an address in Canada. However that application, significantly, was dishonest, in that it represented the applicant to be female, it gave a dishonest date of birth and significantly indicated the that time zone was London Europe and the applicant's income was £21,000 - £35,000. That was the only document before the jury upon which it could possibly be suggested that the applicant had some connection with Canada. There was no evidence whatsoever that the computer had been taken out of this country. We regret to say, therefore, that the renewed application and the grant by this court proceeded on the way in which the case had unfortunately been put to them. The reason why the court would not have granted leave, had it known the true facts, is obvious. First of all, there was clear evidence before the jury that the computer was in the possession of the appellant. The appellant did not give evidence at all to explain or give any account as to how the images might have come onto the computer. As the computer was found in his possession without any explanation, it was plainly open to the jury to infer, in the circumstances of the case, that he had downloaded the images. The second question that then arose was: was there any evidence to show that the images had been downloaded in the United Kingdom. It was an obvious inference, in the absence of any evidence that the computer had been taken out of the United Kingdom, that the images had been made in the United Kingdom. Leave to appeal was therefore granted by this court, it is now apparent, on a wholly false premise, namely there was evidence that the computer may have been used in Canada. Therefore the appeal must be dismissed. There was plain evidence before the jury on which this appellant was rightly convicted. We would, however, wish to return to the further observations we have made about importance of compliance of the Criminal Procedure Rules. It is suggested, and we accept of course what counsel tells us, that the point as to where the images were made did not occur to him until he was in the middle of cross-examination. That is unfortunate because obviously it is right that the issues in this case should have been identified at the PCMH. If there was an issue as to whether the computer had been taken out of the United Kingdom and the pornography had been downloaded outside the United Kingdom, that would have been a real issue in the case. That should have been identified to the judge. In this case it would have had an important consequence. The relevant provisions of the legislation would have enabled the Crown to show that, even though they may have been downloaded outside the United Kingdom, if it was an offence in the country where the photographs were downloaded, that would not have made any difference. The appellant could have been convicted on that basis even if the images were downloaded outside the United Kingdom. It is not necessary to set out the statutory provisions at length contained in s.7 of the Sex Offenders Act 1997 and s.72 of the Sexual Offences Act 2003, but the presumptions in the Act would have helped the Crown's task in showing that the legislation was the same. So this case is an ample demonstration of why it is essential that counsel at the PCMH stage carefully examine and identify the issues. As counsel in this case failed to do so, when the point, as he tells us, occurred to him in the course of cross-examination, it was then his duty to have identified it to the judge, before going any further with his cross-examination. He should not have left the matter for half time. He should have told the judge that there was a new issue and asked the judge how this matter should be dealt with. That would have enabled counsel for the Crown to take the opportunity of looking at the law and the presumptions and provisions of the Sex Offenders Act to which we have referred. It is no longer possible to have cases conducted in the way in which this case was conducted by counsel for the appellant, where points occur to someone and then an attempt is made to ambush the prosecution by a submission of no case to answer. The Divisional Court made clear in the Chorley Justices case [2006] EWHC 1795 (Admin) that trial by ambush was no longer permissible. It is a regrettable fact that this court has again had to make that position clear. It is important to do so in this case, because if counsel had identified the issue, even if it occurred to him late (in a proper manner and not by means of submission at half time) then the Crown would have had an opportunity, if there had been any evidence in this case, to correct and bring before the trial court proper evidence. It is no longer permissible for the ambush of the type that it might be suggested happened in this case, to be performed in the future. We add those merely by way of observations. The appeal fails simply because, had the true position been put before this court, leave to appeal would never have been granted. LORD JUSTICE THOMAS: What is the funding position on this appeal? MR LYNN: The defendant did not have the benefit of a representation order until-- LORD JUSTICE THOMAS: The Crown may wish to apply for costs of course. MR LYNN: I did not complete the sentence. He did not have the benefit of a representation order until he was granted leave. LORD JUSTICE THOMAS: What were the financial provisions? I do not know if the Crown will apply for costs but we shall certainly consider an application to the Crown. Is he in employment? MR LYNN: He is. LORD JUSTICE THOMAS: What are the means on the form? MR LYNN: I do not believe a means form was submitted. LORD JUSTICE THOMAS: Then obviously we shall have to consider whether he should be made to pay the costs of the appeal and the costs of the Crown. Have you got costs? MR MALLISON: I have not. MR JUSTICE OPENSHAW: Does he not have to submit a means? LORD JUSTICE THOMAS: I thought he had to but these regulations sometimes change. MR MALLISON: I do not have a figure to hand and it will depend on the costing of, on this side of the court, the hours done. Obviously the starting point is the fact that, as I speak, the position is that the appellant has the benefit of legal aid because someone-- LORD JUSTICE THOMAS: He is in remunerative employment. There is no reason in this case, having brought in the circumstances in which it has, that he should not pay every penny of the costs of the appeal of both sides, subject to his income. There is no reason why the hard working tax payers of this country should pay a penny towards what has happened here today. MR MALLISON: I need to make a phone call. LORD JUSTICE THOMAS: Can you take instructions on his income now. MR LYNN: I will indeed. LORD JUSTICE THOMAS: We will put this back while we hear the next appeal. If inquires can be made, you can make the enquiry and if we find out what the position is on the representation order, what means he has declared, it shall be convenient to deal with this now if we can. (Short Adjournment) LORD JUSTICE THOMAS: We understand it may be difficult for us to do this now because there is no statement of means that has been asked. Could we just enquire what is your client's earnings? MR LYNN: Well, what happened is that he lost his job as a result of this conviction. He and his wife started a consultancy company. He withdraws from the company £600 a month as his own remuneration. Out of that, their rent is £1150 per month. LORD JUSTICE THOMAS: He gets £600. MR LYNN: But £700 of that they pay from the company because they run the company from their home. I should add that he has two children, aged 4 and 1, by his wife, and he has a child by another lady, who he is paying 12 per cent of his earnings by way of child support. LORD JUSTICE THOMAS: Yes. What is the bottom line? MR LYNN: The bottom line is that he is a man that I guess on the face it has around about, roughly speaking, has £200 or £300 a month disposable income. LORD JUSTICE THOMAS: What are the Crown's costs? MISS MALLISON: The figure which includes VAT is £1233.75. (The Bench Conferred) LORD JUSTICE THOMAS: I think what we ought to do, which I think it will be academic to do anything other than this, is to order that he pays the Crown's costs in the sum of £1200, at a rate of £100 a month. That may be-- MISS MALLISON: It did not include their costs. So, £1200 at the rate of? LORD JUSTICE THOMAS: £100 a month. That is a year. Well within time. What he better do, but I imagine that, because of the restrictions on recovering under a defence costs recovery order, that he better file a statement of means, but I suspect there will be nothing further to pay. I am not saying that. If there is sufficient means, we would want the matter referred back to us. This does not concern the Crown, purely with regards the defence. But I imagine on the figures you have given us, if he can serve a statement of means but I suspect that the recovery of the defence costs will be academic. MR LYNN: I will ensure that is done. Can I ask for two weeks? LORD JUSTICE THOMAS: He needs to state his capital as well. It looks as if he does not have very much. There are large exemptions. So it is unlikely, I suspect, that there is no point in us making an order now you have given us those figures. I suspect there is nothing further that can happen. But we cannot do it now, but if it does transpire that he is above the limits, it should be referred back to us to decide what to do. It does not look as if it will be. Thank you both very much indeed.

Case C-479/04 Laserdisken ApS v Kulturministeriet (Reference for a preliminary ruling from the Østre Landsret) (Directive 2001/29/EC – Harmonisation of certain aspects of copyright and related rights in the information society – Article 4 – Distribution rights – Rule of exhaustion – Legal basis – International agreements – Competition policy – Principle of proportionality – Freedom of expression – Principle of equal treatment – Articles 151 EC and 153 EC) Summary of the Judgment 1. Approximation of laws – Copyright and related rights – Directive 2001/29 – Harmonisation of certain aspects of copyright and related rights in the information society – Distribution rights (European Parliament and Council Directive 2001/29, Art. 4(2)) 2. Acts of the institutions – Choice of legal basis – Criteria – Measure concerning harmonisation of certain aspects of copyright and related rights in the information society (Arts 47(2) EC, 55 EC and 95 EC; European Parliament and Council Directive 2001/29) 3. Approximation of laws – Copyright and related rights – Directive 2001/29 – Harmonisation of certain aspects of copyright and related rights in the information society – Distribution rights (European Parliament and Council Directive 2001/29, Art. 4(2)) 1. Article 4(2) of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society is to be interpreted as precluding national rules providing for exhaustion of the distribution right in respect of the original or copies of a work placed on the market outside the European Community by the rightholder or with his consent. It follows from the clear wording of Article 4(2) of Directive 2001/29, in conjunction with the 28th recital in the preamble to that directive, that that provision does not leave it open to the Member States to provide for a rule of exhaustion other than the Community-wide exhaustion rule. That finding is supported by Article 5 of that directive, which allows Member States to provide for exceptions or limitations to the reproduction right, the right of communication to the public of works, the right of making available to the public other subject-matter and the distribution right. Nothing in that article indicates that the exceptions or limitations authorised might relate to the rule of exhaustion laid down in Article 4(2) of Directive 2001/29 and, therefore, allow Member States to derogate from that rule. (see paras 24-25, 27, operative part 2) 2. In the context of the organisation of the powers of the Community, the choice of the legal basis for a measure must rest on objective factors which are amenable to judicial review. Those factors include in particular the aim and content of the measure. Articles 47(2) EC, 55 EC and 95 EC, on the basis of which Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society was adopted, allow for the taking of measures necessary for the smooth functioning of the internal market as regards freedom of establishment and the freedom to provide services through harmonisation of national laws pertaining to the content and exercise of copyright and related rights. Directive 2001/29 clearly pursues the objectives covered by the abovementioned provisions of the Treaty. (see paras 30-32) 3. Article 4(2) of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society, which provides that the distribution right shall not be exhausted within the Community in respect of the original or copies of the work except where the first sale or other transfer of ownership in the Community of that object is made by the rightholder or with his consent, does not infringe the international agreements concluded by the Community in matters of copyright and related rights or the rules of the Treaty concerning the establishment of a competition policy, or the principles of proportionality and equal treatment, or freedom of expression, or Articles 151 EC and 153 EC. First, with respect to the international agreements concluded by the Community on copyright and related rights, neither Article 6(2) of the World Intellectual Property Organisation (WIPO) Copyright Treaty nor Articles 8(2) and 12(2) of the WIPO Performances and Phonograms Treaty impose an obligation on the Community, as a contracting party, to provide for a specific rule concerning the exhaustion of that right. Secondly, regarding the Treaty rules relating to the establishment of a competition policy, it follows from the first recital in the preamble to Directive 2001/29 that the harmonisation achieved by that directive is also intended to ensure undistorted competition in the internal market, in accordance with Article 3(1)(g) EC. Thirdly, in the light of the objectives pursued by the Community institutions, it appears that the choice made in Article 4(2) in favour of the rule of exhaustion in the Community is not a disproportionate measure capable of affecting the validity of that provision. Fourthly, since the copyright holder is in a position to exercise his control over the first placing on the market of the object covered by the distribution right, freedom of expression clearly cannot be relied upon to have the rule of exhaustion invalidated. Moreover, the alleged restriction on the freedom to receive information is justified in the light of the need to protect intellectual property rights, including copyright, which form part of the right to property. Fifthly, as regards the principle of equal treatment, there is no doubt that a producer and a licence holder established in a non-member country are not in an identical or comparable situation to that of a producer and a licence holder established in the Community. Lastly, regarding Articles 151 EC and 153 EC, it follows from a number of recitals in the preamble to that directive and from the scheme of exceptions and limitations provided for in Article 5 that the cultural aspects specific to the Member States, and the right to education, which the Community legislature must take into account in its action, have been fully taken into consideration by the Community institutions in the drafting and adoption of Directive 2001/29. (see paras 40, 49, 58, 63, 65, 69, 80) JUDGMENT OF THE COURT (Grand Chamber) 12 September 2006 (*) (Directive 2001/29/EC – Harmonisation of certain aspects of copyright and related rights in the information society – Article 4 – Distribution rights – Rule of exhaustion – Legal basis – International agreements – Competition policy – Principle of proportionality – Freedom of expression – Principle of equal treatment – Articles 151 EC and 153 EC) In Case C-479/04, REFERENCE for a preliminary ruling under Article 234 EC from the Østre Landsret (Denmark), made by decision of 16 November 2004, received at the Court on 19 November 2004, in the proceedings Laserdisken ApS v Kulturministeriet, THE COURT (Grand Chamber), composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas and J. Malenovský, Presidents of Chambers, J.‑P. Puissochet, R. Schintgen, N. Colneric, S. von Bahr, G. Arestis (Rapporteur), J. Klučka, U. Lõhmus and A. Ó Caoimh, Judges, Advocate General: E. Sharpston, Registrar: K. Sztranc, Administrator, having regard to the written procedure and further to the hearing on 14 February 2006, after considering the observations submitted on behalf of: – Laserdisken ApS, by H.K. Pedersen, as partner, – the Polish Government, by T. Nowakowski, acting as Agent, – the European Parliament, by K. Bradley and L.G. Knudsen, acting as Agents, – the Council of the European Union, by H. Vilstrup, F. Florindo Gijón and R. Liudvinaviciute, acting as Agents, – the Commission of the European Communities, by W. Wils and N.B. Rasmussen, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 4 May 2006, gives the following Judgment 1 This reference for a preliminary ruling concerns the interpretation and validity of Article 4(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10) (‘the Directive’ or ‘Directive 2001/29’). 2 The reference was made in the context of proceedings between Laserdisken ApS (‘Laserdisken’) and the Kulturministeriet (Ministry of Culture) concerning the applicability of section 19 of the Danish Law on copyright (Ophavsretslov), as amended by Law No 1051 (Lov nr. 1051, om ændring af ophavsretsloven) (Law No 1051 amending the Law on copyright) of 17 December 2002, to the import and sale in Denmark of DVDs lawfully marketed outside the European Economic Area (EEA). Legal context 3 Directive 2001/29 was adopted on the basis of Articles 47(2) EC, 55 EC and 95 EC. Article 1 thereof, entitled ‘Scope’, provides in paragraph 1 that ‘[t]his Directive concerns the legal protection of copyright and related rights in the framework of the internal market, with particular emphasis on the information society’. 4 Under the title ‘Rights and exceptions’, Chapter II of the Directive contains Articles 2 to 5. Article 2 concerns the right of reproduction, Article 3 the right of communication to the public of works and the right of making available to the public other subject-matter, Article 4 the right of distribution, whilst Article 5 concerns exceptions and limitations to the rules laid down in the preceding three articles. 5 Article 4 of the Directive reads as follows: ‘1. Member States shall provide for authors, in respect of the original of their works or of copies thereof, the exclusive right to authorise or prohibit any form of distribution to the public by sale or otherwise. 2. The distribution right shall not be exhausted within the Community in respect of the original or copies of the work, except where the first sale or other transfer of ownership in the Community of that object is made by the rightholder or with his consent.’ 6 Article 5(2) of the Directive provides that Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in certain cases. Article 5(3) provides that Member States may also provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the cases listed in that paragraph. 7 According to Article 5(4) of the Directive, ‘[w]here the Member States may provide for an exception or limitation to the right of reproduction pursuant to paragraphs 2 and 3, they may provide similarly for an exception or limitation to the right of distribution as referred to in Article 4 to the extent justified by the purpose of the authorised act of reproduction’. 8 Prior to transposition of Directive 2001/29, section 19 of the Danish Law on copyright provided that ‘[w]hen a copy of a work is, with the copyright holder’s consent, sold or in some other manner transferred to another party, the copy may be distributed further’. 9 Following amendment of that law by Law No 1051 of 17 December 2002, intended to transpose Directive 2001/29, section 19(1) has since read as follows: ‘When a copy of a work is, with the copyright holder’s consent, sold or in some other manner transferred to another party within the European Economic Area, the copy may be distributed further. As regards further distribution in the form of lending or rentals, the provision in the first sentence shall also apply to sales or other forms of transfer to other parties outside the European Economic Area.’ 10 Pursuant to Article 65(2) of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) (‘the EEA Agreement’), specific provisions and arrangements concerning intellectual, industrial and commercial property are to be found in Protocol 28 and Annex XVII to that agreement. By Decision of the EEA Joint Committee No 110/2004 of 9 July 2004 amending Annex XVII (Intellectual property) to the EEA Agreement (OJ 2004 L 376, p. 45), Directive 2001/29 was incorporated into that agreement. The main proceedings and the questions referred for a preliminary ruling 11 Laserdisken is a commercial company which sells inter alia copies of cinematographic works to individual purchasers through its sales outlets in Denmark. 12 Until the end of 2002, those copies were mostly imported by the company from other Member States of the European Union but also from non-member countries. The products included special editions, such as original American editions, or editions filmed using special techniques. Another major part of the product range consisted of cinematographic works which were not or would not be available in Europe. 13 Having registered a significant drop in its operations following the abovementioned legislative amendment, on 19 February 2003 Laserdisken brought legal proceedings against the Kulturministeriet before the Østre Landsret (Eastern Regional Court), claiming that section 19 of the Law on copyright, as amended in the context of the transposition of Article 4(2) of Directive 2001/29, did not apply. According to Laserdisken, the new provisions of section 19 have a significant effect on its imports and sales of DVDs lawfully marketed outside the EEA. 14 In support of that claim, Laserdisken pleaded invalidity of Directive 2001/29, on the ground that Articles 47(2) EC, 55 EC and 95 EC are not the appropriate legal basis for adoption thereof. 15 Laserdisken also argued that Article 4(2) of that directive infringes the international agreements which bind the Community in matters of copyright and related rights, the rules of the EC Treaty concerning the establishment of a competition policy, the principle of proportionality in connection with combating piracy and, more generally, completing the internal market, freedom of expression, the principle of equal treatment and the provisions of the Treaty concerning the Member States’ cultural policy and educational policy, namely Articles 151 EC and 153 EC. 16 Since the abovementioned pleas in law were contested in their entirety by the Kulturministeriet, the Østre Landsret decided to stay the proceedings and to refer the following two questions to the Court for a preliminary ruling: ‘1. Is Article 4(2) of Directive [2001/29] invalid? 2. Does Article 4(2) of Directive [2001/29] preclude a Member State from retaining international exhaustion in its legislation?’ The questions The second question 17 By its second question, which it is appropriate to consider first, the national court asks whether Article 4(2) of Directive 2001/29 precludes national rules which provide that the distribution right in respect of the original or copies of a work is exhausted where the first sale or other transfer of ownership is made by the holder of that right or with his consent outside the Community. 18 Laserdisken and the Polish Government claim that Article 4(2) of Directive 2001/29 does not preclude a Member State from retaining such a rule of exhaustion in its legislation. The Commission of the European Communities maintains the opposite view. 19 Article 4(1) of Directive 2001/29 enshrines the exclusive right for authors, in respect of the original of their works or of copies thereof, to authorise or prohibit any form of distribution to the public by sale or otherwise. 20 Article 4(2) contains the rule pertaining to exhaustion of that right. According to that provision, the distribution right is not to be exhausted in respect of the original or copies of the work, except where the first sale or other transfer of ownership in the Community of that object is made by the rightholder or with his consent. 21 It follows that for the right in question to be exhausted, two conditions must be fulfilled: first, the original of a work or copies thereof must have been placed on the market by the rightholder or with his consent and, second, they must have been placed on the market in the Community. 22 Laserdisken and the Polish Government argue, essentially, that Article 4(2) of the Directive leaves it open to the Member States to introduce or maintain in their respective national laws a rule of exhaustion in respect of works placed on the market not only in the Community but also in non-member countries. 23 Such an interpretation cannot be accepted. According to the twenty-eighth recital in the preamble to Directive 2001/29, copyright protection under that directive includes the exclusive right to control distribution of the work incorporated in a tangible article. The first sale in the Community of the original of a work or copies thereof by the rightholder or with his consent exhausts the right to control resale of that object in the Community. According to the same recital, that right should not be exhausted in respect of the original of the work or of copies thereof sold by the rightholder or with his consent outside the Community. 24 It follows from the clear wording of Article 4(2) of Directive 2001/29, in conjunction with the twenty-eighth recital in the preamble to that directive, that that provision does not leave it open to the Member States to provide for a rule of exhaustion other than the Community-wide exhaustion rule. 25 That finding is supported by Article 5 of Directive 2001/29, which allows Member States to provide for exceptions or limitations to the reproduction right, the right of communication to the public of works, the right of making available to the public other subject-matter and the distribution right. Nothing in that article indicates that the exceptions or limitations authorised might relate to the rule of exhaustion laid down in Article 4(2) of Directive 2001/29 and, therefore, allow Member States to derogate from that rule. 26 This, moreover, is the only interpretation which is fully consistent with the purpose of Directive 2001/29 which, according to the first recital in the preamble thereto, is to ensure the functioning of the internal market. A situation in which some Member States will be able to provide for international exhaustion of distribution rights whilst others will provide only for Community-wide exhaustion of those rights will inevitably give rise to barriers to the free movement of goods and the freedom to provide services. 27 In the light of the foregoing, the answer to the second question must be that Article 4(2) of Directive 2001/29 is to be interpreted as precluding national rules providing for exhaustion of the distribution right in respect of the original or copies of a work placed on the market outside the Community by the rightholder or with his consent. The first question 28 Laserdisken and the Polish Government propose that the answer to the question be that Directive 2001/29, and in particular Article 4(2) thereof, are contrary to Community law. The European Parliament, the Council of the European Union and the Commission, on the other hand, contend that none of the grounds of invalidity put forward may be upheld. The legal basis for Directive 2001/29 29 Laserdisken claims that Directive 2001/29 was adopted incorrectly on the basis of Articles 47(2) EC, 55 EC and 95 EC, because they cannot be used as a basis for the Community-wide exhaustion rule laid down in Article 4(2) of that directive. 30 According to settled case-law, in the context of the organisation of the powers of the Community the choice of the legal basis for a measure must rest on objective factors which are amenable to judicial review. Those factors include in particular the aim and content of the measure (Joined Cases C‑453/03, C‑11/04, C‑12/04 and C‑194/04 ABNA and Others [2005] ECR I-10423, paragraph 54 and case-law cited). 31 The Court notes that Articles 47(2) EC, 55 EC and 95 EC, on the basis of which Directive 2001/29 was adopted, allow for the taking of measures necessary for the smooth functioning of the internal market as regards freedom of establishment and the freedom to provide services through harmonisation of national laws pertaining to the content and exercise of copyright and related rights. 32 Directive 2001/29 clearly pursues the objectives covered by the abovementioned provisions of the Treaty. 33 According to the first recital in the preamble to that directive, the Treaty provides for the establishment of an internal market and the institution of a system ensuring that competition in the internal market is not distorted, and harmonisation of the laws of the Member States on copyright and related rights contributes to the achievement of these objectives. 34 On that point, the third recital in the preamble to Directive 2001/29 states that the proposed harmonisation will help to implement the four freedoms of the internal market. The sixth recital in the preamble to the same directive states, however, that without harmonisation at Community level, legislative activities at national level might result in significant differences in protection and thereby in restrictions on the free movement of services and products incorporating, or based on, intellectual property. 35 It follows from the foregoing that the objections raised by Laserdisken in the present case relating to the legal basis of the Directive are unfounded. Article 4(2) of Directive 2001/29 – Infringement of international agreements concluded by the Community on copyright and related rights 36 The national court does not state which agreements binding the Community might be infringed by the rule of Community-wide exhaustion of distribution rights laid down in Article 4(2) of Directive 2001/29. 37 In its observations, Laserdisken states, although without providing further explanations, that the distribution right and the exhaustion rule laid down in Article 4(2) of Directive 2001/29 are contrary to Articles 1(c) and 2(a) of the Convention on the Organisation for Economic Co-operation and Development (OECD), signed in Paris on 14 December 1960. Those provisions state respectively that ‘[t]he aims of the [OECD] shall be to promote policies designed … to contribute to the expansion of world trade on a multilateral, non-discriminatory basis’ and that, in pursuit of those aims inter alia, ‘the [Member States] agree that they will … promote the efficient use of their economic resources’. 38 The Court finds that not only is that argument vague, but also that the provisions referred to by Laserdisken, even if they do bind the Community, are not intended to regulate the issue of exhaustion of distribution rights. 39 Moreover, the fifteenth recital in the preamble to Directive 2001/29 states that the Directive implements the international obligations resulting from the adoption, in Geneva on 20 December 1996, under the auspices of the World Intellectual Property Organisation (‘WIPO’), of the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, which treaties were approved on behalf of the Community by Council Decision 2000/278/EC of 16 March 2000 (OJ 2000 L 89, p. 6). 40 Regarding the right of distribution, neither Article 6(2) of the WIPO Copyright Treaty nor Articles 8(2) and 12(2) of the WIPO Performances and Phonograms Treaty impose an obligation on the Community, as a contracting party, to provide for a specific rule concerning the exhaustion of that right. 41 It follows from the purpose of those treaties, as formulated inter alia in the first recitals in the preambles thereto, that they tend towards a harmonisation of the rules pertaining to copyright and related rights. 42 More specifically, regarding the right of distribution, the WIPO Copyright Treaty fulfils its harmonisation objective in providing for the exclusive right of authors to authorise the making available to the public of the originals of their works and copies thereof through sale or other transfer of ownership. The Treaty does not, however, affect the contracting parties’ power to determine the conditions governing how exhaustion of that exclusive right may apply after the first sale. It thus allows the Community to pursue further harmonisation of national laws also in relation to the rule of exhaustion. The abovementioned provisions of the WIPO Copyright Treaty and those of Directive 2001/29 are therefore complementary, in the light of the harmonisation objective pursued. 43 It follows from all the above considerations that the submission that Article 4(2) of Directive 2001/29 infringes the international agreements concluded by the Community in the field of copyright and related rights cannot be upheld. – The Treaty rules relating to the establishment of a competition policy 44 Laserdisken claims that the exhaustion rule laid down in Article 4(2) of Directive 2001/29 reinforces suppliers’ control of the distribution channels, thereby adversely affecting free competition. The core of the argument put forward by the applicant in the main proceedings is that competition is generally nullified by that exhaustion rule combined with the regional encoding system for DVDs. Certain works placed on the market outside the Community are not accessible within the Community, due to that rule. 45 The Polish Government adds that that exhaustion rule prevents the promotion of greater competitiveness and gives holders of copyright and related rights a level of protection of their interests going beyond the purpose of such rights. 46 By all of their assertions, the applicant in the main proceedings and the Polish Government argue, essentially, that the exhaustion rule laid down in Article 4(2) of Directive 2001/29 prevents free competition at the global level. 47 It should be borne in mind that, according to Article 3(1)(g) EC, the activities of the Community are to include, as provided for in the Treaty and in accordance with the timetable set out therein, a system ensuring that competition in the internal market is not distorted. In that context, Title VI of the Treaty contains a Chapter 1, which includes Articles 81 EC to 89 EC laying down rules on competition. 48 In the present case, according to the first recital in the preamble to Directive 2001/29, harmonisation of the laws of the Member States on copyright and related rights contributes to the establishment of the internal market and to the institution of a system ensuring that competition in that market is not distorted. 49 It follows that the harmonisation achieved by that directive is also intended to ensure undistorted competition in the internal market, in accordance with Article 3(1)(g) EC. 50 According to the argument put forward by Laserdisken and the Polish Government, the Community legislature is obliged, in adopting Directive 2001/29, to take account of a principle of free competition at the global level, an obligation which does not follow from either Article 3(1)(g) EC or the other provisions of the Treaty. 51 It follows from the foregoing that the ground of invalidity based on infringement of the Treaty rules relating to the establishment of a competition policy must be rejected. – Infringement of the principle of proportionality 52 According to Laserdisken and the Polish Government, the exhaustion rule laid down in Article 4(2) of Directive 2001/29 is not necessary for attaining the objective of an internal market without barriers and imposes on the citizens of the European Union burdens which go beyond what is necessary. That provision is, moreover, ineffective in preventing the distribution of works placed in circulation in the Community without the consent of holders of copyright and related rights. 53 According to settled case-law, the principle of proportionality, which is one of the general principles of Community law, requires that measures implemented through Community provisions be appropriate for attaining the objective pursued and must not go beyond what is necessary to achieve it (Case C‑491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11453, paragraph 122). 54 The applicant in the main proceedings criticises, essentially, the choice made by the Community institutions in favour of the rule of exhaustion of the right of distribution in the Community. 55 It is, accordingly, appropriate to consider whether the adoption of that rule constitutes a measure which is disproportionate in relation to the objectives pursued by those institutions. 56 It should be borne in mind that differences in the national laws governing exhaustion of the right of distribution are likely to affect directly the smooth functioning of the internal market. Accordingly, the objective of harmonisation in this area is to remove impediments to free movement. 57 Moreover, according to the ninth recital in the preamble to Directive 2001/29, the protection of copyright and related rights helps to ensure the maintenance and development of creativity in the interests of inter alia authors, performers, producers and consumers. The tenth recital in the preamble to the same directive states that legal protection of intellectual property rights is necessary in order to guarantee an appropriate reward for the use of works and to provide the opportunity for satisfactory returns on investment. In the same vein, the eleventh recital states that a rigorous, effective system of protection is a way of ensuring that European cultural creativity and production receive the necessary resources and of safeguarding the independence and dignity of artistic creators and performers. 58 In the light of the abovementioned objectives, it appears that the choice made by the Community legislature in Article 4(2) of Directive 2001/29 in favour of the rule of exhaustion in the Community is not a disproportionate measure capable of affecting the validity of that provision. 59 It follows from all the foregoing considerations that the argument alleging infringement of the principle of proportionality is unfounded. – Breach of freedom of expression 60 According to Laserdisken, Article 4(2) of Directive 2001/29 has the effect of depriving citizens of the Union of their right to receive information, in breach of Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’). Laserdisken also pleads disregard of the freedom of copyright holders to communicate their ideas. 61 As a preliminary point, it should be recalled that, according to settled case-law, fundamental rights form an integral part of the general principles of law the observance of which the Court ensures, and that, for that purpose, the Court draws inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by international treaties for the protection of human rights on which the Member States have collaborated or to which they are signatories. The ECHR has special significance in that respect (Case C‑112/00 Schmidberger [2003] ECR I-5659, paragraph 71 and case-law cited). 62 Freedom of expression, enshrined in Article 10 of the ECHR, is a fundamental right the observance of which is ensured by the Community courts (Case C‑260/89 ERT [1991] ECR I-2925, paragraph 44). The same is true of the right to property, which is guaranteed by Article 1 of the Additional Protocol to the ECHR (see, to that effect, Case C‑347/03 Regione autonoma Friuli-Venezia Giulia and ERSA [2005] ECR I‑3785, paragraph 119, and Joined Cases C‑154/04 and C‑155/04 Alliance for Natural Health and Others [2005] ECR I‑6451, paragraph 126). 63 First, the argument that there has been a breach of the freedom of expression guaranteed by Article 10 of the ECHR because copyright holders are prevented from communicating their ideas must be rejected. According to Article 4(2) of Directive 2001/29, the right of distribution is exhausted provided that the copyright holder has given his consent to the first sale or other transfer of ownership. That holder is, therefore, in a position to exercise his control over the first placing on the market of the object covered by that right. In that context, freedom of expression clearly cannot be relied upon to have the rule of exhaustion invalidated. 64 Secondly, regarding the freedom to receive information, even if the exhaustion rule laid down in Article 4(2) of Directive 2001/29 may be capable of restricting that freedom, it nevertheless follows from Article 10(2) of the ECHR that the freedoms guaranteed by Article 10(1) may be subject to certain limitations justified by objectives in the public interest, in so far as those derogations are in accordance with the law, motivated by one or more of the legitimate aims under that provision and necessary in a democratic society, that is to say justified by a pressing social need and, in particular, proportionate to the legitimate aim pursued (see, to that effect, Case C‑71/02 Karner [2004] ECR I‑3025, paragraph 50). 65 In the present case, the alleged restriction on the freedom to receive information is justified in the light of the need to protect intellectual property rights, including copyright, which form part of the right to property. 66 It follows that the argument that there has been a breach of freedom of expression must be rejected. – Infringement of the principle of equal treatment 67 Laserdisken claims that the rule of exhaustion laid down in Article 4(2) of Directive 2001/29 is capable of infringing the principle of equal treatment. It states, by way of example, that a producer and a licence holder established in a non-member country are not in the same situation as a producer and a licence holder established in the Community. 68 It is settled case-law that the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (ABNA and Others, paragraph 63 and case-law cited). 69 Even if the argument of the applicant in the main proceedings may be profitably put forward in the present context, it does not establish that the application of Article 4(2) of the Directive amounts to treating two comparable situations differently. There is no doubt that a producer and a licence holder established in a non-member country are not in an identical or comparable situation to that of a producer and a licence holder established in the Community. In actual fact, Laserdisken is essentially asserting that situations which are manifestly not comparable must be treated in the same way. 70 It follows that the argument that there has been infringement of the principle of equal treatment must be rejected. – Infringement of Articles 151 EC and 153 EC 71 According to Article 151(1) EC, the Community is to contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore. 72 Article 153(1) EC provides inter alia that, in order to promote the interests of consumers and to ensure a high level of consumer protection, the Community is to contribute to promoting their right to information and education. 73 Laserdisken, supported by the Polish Government, claims that, in adopting Article 4(2) of Directive 2001/29, the Community disregarded the abovementioned provisions. 74 The Court finds, in the first place, that those provisions are referred to either expressly or in essence by a number of recitals in the preamble to that directive. 75 As is apparent from the ninth and eleventh recitals in the preamble to Directive 2001/29, any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation and a rigorous, effective system for their protection is one of the main ways of ensuring that European cultural creativity and production receive the necessary resources and of safeguarding the independence and dignity of artistic creators and performers. 76 According to the twelfth recital in the preamble to Directive 2001/29, adequate protection of copyright works and subject-matter of related rights is also of great importance from a cultural standpoint, and Article 151 EC requires the Community to take cultural aspects into account in its action. 77 Lastly, under the fourteenth recital in the preamble to Directive 2001/29, the Directive should seek to promote learning and culture by protecting works and other subject-matter while permitting exceptions or limitations in the public interest for the purpose of education and teaching. 78 In the second place, Article 5 of Directive 2001/29 provides for a system of exceptions and limitations to the various rights laid down in Articles 2 to 4 in order to enable Member States to exercise their powers inter alia in the fields of education and teaching. 79 There are, moreover, strict boundaries placed on that system by Article 5(5), which provides that the exceptions and limitations provided for are to be applied only in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder. 80 It follows from the foregoing that the cultural aspects specific to the Member States, which are referred to in essence by the applicant in the main proceedings, and the right to education, which the Community legislature must take into account in its action, have been fully taken into consideration by the Community institutions in the drafting and adoption of Directive 2001/29. 81 It follows that the arguments alleging infringement of Articles 151 EC and 153 EC must be rejected. 82 Accordingly, the answer to the national court must be that consideration of the first question does not reveal any information such as to affect the validity of Article 4(2) of Directive 2001/29. Costs 83 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. Consideration of the first question does not reveal any information such as to affect the validity of Article 4(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. 2. Article 4(2) of Directive 2001/29 is to be interpreted as precluding national rules providing for exhaustion of the distribution right in respect of the original or copies of a work placed on the market outside the European Community by the rightholder or with his consent. [Signatures] * Language of the case: Danish.

Mr Justice Floyd : This is a passing off action about vacuum cleaners. The principal allegation in the action is that the defendant ("Qualtex") threatened to place on the market a product which, if marketed, would, by its appearance and get up, deceive purchasers into thinking it was one of the claimant's ("Numatic") well known Henry vacuum cleaners. It is regrettable that the case should have reached trial, because the parties are fighting about a product which is not on the market and which will never now reach the market even if Qualtex are successful. Normally that should put an end to expensive intellectual property litigation, but the parties have been unable to settle due, I would imagine, to what are now the very significant costs, the responsibility for which will turn on the result of the action. Background to the action Numatic manufacture successful ranges of vacuum cleaners for commercial and domestic use. Most people have seen examples of one. The best known is called the Henry. It is a tub type construction. It has a domed black lid which some people recognise as a bowler hat. Below the bowler hat it is red and there is a printed smiling face. The nose is the hole where the hose emerges from the side of the tub, and gives the appearance of an elephant's trunk when the hose is connected. A typical Henry looks like this: Henry is part of a range of cleaners made by Numatic. Other names given to their models are Hetty, Charles and George, which have different colours, but Henry is the best known. Excluding the pink Hetty (which, exceptionally, sold some 160,000 units in 2009) non red/black colourways represent about 50,000 units or 15% of sales in the UK. Numatic have invested significant resources in giving Henry an anthropomorphic character and appearance. The Henry range has also, as the evidence showed, established an excellent reputation for reliability. Numatic also make a range of commercial cleaners some of which are similar in design to Henry, such as the NRV 200 depicted below. The NRV 200 has a flange or skirt around the bottom of the base, and is taller than the domestic Henry. The commercial cleaners do not have names – they have the word Numatic on them instead – but they still have the smiley face. Others in the commercial range, because of their use of a metal construction, have a rather different appearance. Numatic's principal witness was Mr Jonathan Evans. He was rather a careful witness, preferring not to agree to any statement unless its contents were exactly reflected in the document to which he was being referred. But I have no reason to suppose he was not giving his evidence truthfully. Qualtex have been engaged in the vacuum cleaner aftermarket for many years. Their business has been very successful. Their main witness was Mr Philip Hulme, the son of George Hulme who founded the business as George Hulme (Stockport) Limited. Mr Philip Hulme was a somewhat argumentative witness, preferring on a number of occasions to stress his company's defences to the claim rather than answering the questions put to him. This caused me to lack confidence in some aspects of his evidence, particularly where questions of chronology, or where explanations for taking particular steps were concerned. At some point prior to the end of January 2008 Qualtex formed the intention to have manufactured and to sell a replica of the Henry cleaner. Qualtex concluded that, provided that they chose a design in which all relevant intellectual property rights (such as all the various forms of national and community, registered and unregistered design rights) had expired, they should be free to do so, provided that they did not use any Numatic trade mark such as the name Henry. In this they are absolutely right. There is no point in having design rights with expiry dates if traders are not free to market replica products thereafter. The only qualification to this is that they must not market a product in such a way as to lead to passing off. Accordingly on 31st January 2008 Qualtex instructed solicitors, Robinsons, to write to Numatic telling them that they intended to launch such a product, but that it would not use the Henry name or have a Henry "face" or anything confusingly similar to either. At this stage Robinsons did not identify for whom they acted, but nothing turns on this, because they identified themselves in their next letter, in response to a request from Patent and Trade Mark Attorneys, FJ Cleveland, instructed by Numatic, for these details and for details of the proposed product. Robinsons' letter of 21st February stated that the product would be a replica of the 1997 version of Henry, and repeated its request that Numatic state whether any rights in or relating to Henry would be infringed. On 25th February 2008 FJ Cleveland wrote asking whether the replica product would reproduce any of the Henry colourways. It also asked for clarification of what brand name or other insignia would be used, as this would be relevant to an action in passing off. Robinsons responded on 28th February asking that Numatic should respond on the basis (a) that Qualtex uses the same or similar colourways and (b) that it does not. So far as insignia were concerned, the letter asked that Numatic should respond on the basis that entirely different brand name/insignia were to be used. As the earlier letter had foreshadowed, on 19th March 2008 FJ Cleveland wrote asserting that Numatic was the owner of a valuable goodwill in the appearance of the Henry including its shape and get-up which it could protect by an action in passing off. They made the position plain in the following way: "The appearance of the Henry is, quite simply, iconic. It is probably the most distinctive and recognisable vacuum cleaner on the market. Such distinctiveness and recognisability resides in a number of features, including the "bowler hat" shape on the cylindrical base, the "smiley face" graphics and the red and black colourways. Our client instructs us that the basic shape and appearance has not changed over the years and that, whilst the majority of the sales have been in the red/black colourway, it has been sold in various other colourways"" The letter made it clear that Numatic were not prepared to answer on the basis of any hypothetical insignia or branding and repeated a request made earlier for a mock up or prototype. Numatic therefore asked for undertakings not to market the product. Robinsons' response of 27th March 2008 took issue with the assertion that rights subsisted in the shape independently of the Henry name, the smiley face and the red/black colourway, which features Qualtex did not intend to use. It also stated that whichever brand name Qualtex chose to use for its proposed product (which had yet to be finalised), it would not be, in any way, confusingly similar to Numatic's "HENRY" brand. The letter also contained the following important paragraphs: "Our client absolutely refutes the allegations that it is proposing to pass off its products as those of your client or that it has made unambiguous and immediate threats to do so. Indeed, whilst, but the reasons explained above (lack of distinctiveness, misrepresentation or damage) we consider it unnecessary for a client to do so, our client is currently also considering what active steps it might take to positively distinguish its product from your client and/or the Henry product. We and our client will be happy to consider any reasonable and sensible proposals you or your client may wish to make in this regard. You will of course be aware that in passing off cases unlike registered trademark cases, the Court can -- indeed must -- take all relevant circumstances into account such as the presence of distinguishing factors. … Other than the basic shape of its product (which we have told you is a replica of the 1997 Henry design) our client has not yet finalised the brand name or insignia for its proposed product; it does not currently have prototype samples available. That is why we have asked your client to assume, for the purposes of this correspondence, that our client will be using an entirely different brand name and insignia to that used by your client. The onus is firmly on our clients to ensure that it does so; if it fails to do so your client would remain entirely unprejudiced by having responded to our client's invitation on the basis of said assumption. Accordingly, the undertakings enclosed with your 19th of March letter are inappropriate and our client does not agree to give these. At this stage, given that there are material aspects of our client's proposed product yet to be finalised -- e.g. its brand name, colourways and other indicia. In light of this it would be entirely premature of your client to issue proceedings on a quia timet basis as threatened in your letter." Numatic's response in its letter dated 17 April 2008 was to instruct its solicitors, Arnold & Porter to take up the correspondence. They took issue with Qualtex's position in relation to passing off and pressed for further details as to the branding, markings, colourways and presence of a "bowler hat" top. They proposed (in place of the previous undertakings) that Qualtex provide them with a sample and accompanying sales literature and undertake to give 21 days notice of intention to market or sell the replica. The letter made a special point of refusing to become involved in assisting Qualtex to "in the design of its "replica" product". The exchange of opening salvos comes to an end at this point. The precise get-up of the Qualtex replica was still uncertain, and the parties were at odds as to whether the similarity of shape and the "bowler hat" were on their own likely to give rise to passing off. Qualtex were promising "active steps … to positively distinguish" its products, but had declined to inform Numatic of what these were. Some 11 months later, on March 9th 2009, Mr George Hulme, of Qualtex sent an email to Jonathan Evans of Numatic on the eve of an important industry exhibition at the NEC in Birmingham. It was in the following terms: "Re: Creating a competitor" To avoid any misunderstanding, the presence of an alternative NRV on the Qualtex stand at the "Cleaning Show" is entirely due to the constant and unreasonable stance of Mr Duncan in treating Qualtex personnel as second-class citizens. By refusing direct supply or insulting one's intelligence by a Machiavellian contrivance of terms to achieve the same thing. Whilst at the same time allowing Qualtex competitor's unfettered access to direct supply. Do not concern yourselves with any "passing off" lingering hopes of maintaining monopoly as the varying branding will take the avoidance of this seriously and effectively." "Creating a competitor" was a reference to a grievance Qualtex apparently felt as to the terms on which Numatic were prepared to supply Qualtex with Henry vacuum cleaners. Whilst the tone of the email might be criticised as aggressive, there is no doubt that the letter was claiming that Qualtex was going to apply serious and effective branding to the "alternative NRV" product, at least when it came to be sold, sufficient to prevent any possibility of passing off. No details of the branding were supplied. It was therefore not possible for Numatic to judge whether the branding Qualtex had in mind would live up to this description. The Cleaning Show took place at the NEC in Birmingham on 11th March 2009. A prototype of the Qualtex replica product was displayed on the Qualtex stand. Representatives of Numatic visited the stand and were able to inspect the product and take photographs. The Qualtex replica product was placed on top of a washing machine at a prominent place on the stand, but without any explanatory literature or signage. The product was nevertheless obviously on a Qualtex stand and surrounded by other Qualtex products. It had no brand name applied to it, however. Whilst a different colour had been chosen for the base, the bowler-hatted lid was in shiny black, just as in the Henry. The Qualtex replica product looks like this, alongside a typical domestic Henry: It will be seen that it differs from the typical Henry in that it has a circumferential flange or skirt around the base of the tub. That is a feature of the Numatic NRV 200, and also of the Numatic domestic cleaners Charles and George. Below the Qualtex prototype is pictured alongside the NRV200. Between April 2008, when the solicitors' correspondence came to an end, and the Cleaning Show, Qualtex had decided that they would make a replica of the NRV200 machine, rather than the basic Henry product. A note made by Philip Hulme on 23rd April 2008 records this decision, together with a decision that the name of the range would be "Quick Clean". This decision was not communicated to Numatic. By August 2008 Qualtex had received a hand made sample. The replica was to be slightly taller (perhaps by about 15 mm) than the original. In December 2008 Qualtex received photographs of the machine in a variety of different colours for the base and with either black or silver lids. By 1st February 2009 Qualtex's employee Mohsen Hamed was pressing the Chinese agent for the sample machine "to put on the show as this is our good chance to sell in advance". The agent was to push hard for "good looking samples to put in the show". A sample was received on 27th February 2009. By 4th March 2009 Qualtex had sent detailed comments on the sample back to China dealing with features of the mechanical design, but not making any significant change to the outer appearance of the replica. Following the Cleaning Show, Qualtex reported to their Chinese suppliers that the sample machine was "well received and we found many buyers who wish to "own brand" the product. We have decided that we will provide the various own brand labels and stick on transfers in the UK as it will be easier to do. This means we will ask you to provide just one sticker label loose in the carton. The wording for the sticker now is Quick Clean Equipment and on the carton – Quick Clean Equipment (Artwork to follow)" It is clear that Qualtex had indeed found buyers for the machine at the Cleaning Show, although they did not take any orders. Qualtex were intending to allow large commercial purchasers to have their own names printed onto the labels to place on the machines. These labels would be produced in England. The underlying idea was to prevent theft of the cleaners by employees. This facility was also one offered to some of Numatic's customers – an example with the name "Nationwide" on it was produced at trial lacking any other name or the smiley face. If the machines were to be branded Quick Clean, on the other hand, the labels were to be provided loose by the manufacturers and included in the carton. On 4th April Mohsen Hamed wrote to the Chinese supplier asking whether the new sample had been sent. He said that it was urgent as Qualtex had orders for more than 5000 machines already and they did not want it to "go cold". Mr Hamed was not called, but Mr Hulme explained this communication as referring only to an estimate of potential market size in Australia. Although Qualtex did not have signed orders, I believe that by this date they had significant expressions of interest from customers, both in this country and abroad, generated mainly at the Show on the basis of the prototype machine shown at the Show. So, for example, on 15th April Mr Hamed wrote to the Chinese suppliers to say that Qualtex had customers interested in full containers of the "Numatic machine". Mr Hulme contended that Mr Hamed was not being accurate about this, but I consider it more likely that Qualtex did indeed have very significant customer interest in a machine to the design of the prototype shown at the Show in April 2009. Numatic's solicitors did not write to Qualtex immediately after the exhibition. Instead they started to commission a market research survey (of which more later) designed to establish that the replica product (without branding) would lead members of the public to think it was a Henry. Finally, on 29th April 2009 they wrote to say that they were in the process of obtaining detailed witness statements from the interviewees. They asked for undertakings that Qualtex would not deal in (1) "any vacuum cleaner … that has a top in the style of a bowler hat (whether with or without a brim and of any colour or colours)", (2) any product which is "identical or substantially similar to, the appearance of any or all of Numatics' Bowler Hat Cleaners", (3) "any product that is identical to or substantially similar to the replica in appearance", acknowledging that alterations to the dimensions, changing the colour or adding additional branding will not avoid a breach of the undertaking. Interim relief was threatened. On 7th May 2009 new solicitors acting on behalf of Qualtex, SAS Daniels LLP, wrote a long letter in response. They indicated that the product was intended "primarily but not entirely exclusively" for the commercial market and "will incorporate the features of the round top but it incorporates a number of improved features such as the increased size of the tank capacity to allow use of both small and large disposable bags". So far as branding was concerned they said: "Although the manner in which our clients will brand market the machine is a matter for them, we can inform you that in fact that vacuum cleaner will not be aimed at the general public but that existing and new commercial and wholesale customers, many of whom may elect to apply their own Company's logo and branding to the vacuum cleaner." Proceedings were commenced by claim form dated 19th May 2009 accompanied by an application for an interim injunction. The application for an interim injunction was compromised on terms embodied in the order of Sales J dated 16th July 2009. Qualtex undertook not to sell vacuum cleaners "having the appearance or substantially the appearance of" the photograph of the replica taken at the Cleaning Show. There was a carve-out in relation to 100 vacuum cleaners which could be sold to Qualtex UK trading as Kenco Spares in Dublin, provided that any such vacuum cleaners were not re-imported. Equally it was not to be a breach for Qualtex to sell the vacuum cleaner depicted in Annex B of the Defence which had been served on 24th June 2009. The Defence had been served on 24th June 2009. Paragraph 34(ii) of the Defence offered and gave an undertaking that Qualtex would not offer or sell the prototype shown at the Cleaning show. The pleading explained at paragraph 31 that, since the Cleaning Show, Qualtex had done further work on the design and branding of the prototype, resulting in the cleaner depicted in Annex B. This was the machine which Qualtex intended to market and sell. The Annex B cleaner (pictured below) had a bumper band and tool caddy support permanently fitted to the top. The top and bottom were cobalt blue. It was branded with the words "Quick Clean Equipment" which appear on Qualtex's other commercial products. The word "Commercial" also appears on it. Numatic do not contend that the sale of this machine would be passing off. Qualtex have now developed the concept further and are intending to bring out a domestic version of the Annex B machine. Again Numatic take no objection to it. Even after the letter before action in April, Qualtex were still working towards producing a replica machine. Matters were held up a little in May when Qualtex requested commercial certification – previously the motor had only been certified for domestic use. I accept Mr Hulme's explanation that this was due to a misunderstanding by the suppliers, rather than a reflection of an intention on the part of Qualtex to sell a purely domestic machine. By 18th May Qualtex had what is described as "the final print" of the boxes for the Numatic. There were two sheets of these. The first, in blue, showed the original prototype machine. The machine in the photograph on the box was unbranded and was to all intents and purposes the same as the prototype exhibited at the show, but the box carried the Quick Clean Equipment brand. The box stated that the machine was equally suitable for domestic or commercial cleaning situations. The second box print was in green, and neither the box nor the machine (which had a black top and green base) were branded. Mr Hulme said that this was the 110V machine, but, even if that box was ultimately to be used for a 110V machine, there is no sign in any document which I was shown of a 110V machine, nor is there any reason why it should come in a differently branded box. It seems to me to be likely that it was a version of the machine which could be sold without any form of branding – for example to those customers who wished to place their own name on the machine. 100 machines to the prototype design, and in the packaging referred to as the "final print" were manufactured in China and shipped to the UK. Mr Hulme's evidence was that these were for field testing. They were ultimately shipped to Ireland in September 2009, where they were sold pursuant to the exception in the court's order. If this was a field test at all, it was a very informal one, as Numatic themselves were able to purchase a machine for use at the trial from the Irish distributor. There was no label on the machine and the stickers with the brand name were loose in the box. I think that these 100 machines are further evidence that Qualtex had a settled intention to market the replica machine to the design of the prototype. The exception for these machines was negotiated on the basis that their production "could be too far along to be stopped". It is clear that subsequent production of machines to the design of the prototype was halted, but only after the commencement of proceedings. I accept of course that at some point Qualtex decided to incorporate the bumper band and tool caddy, and that there were discussions between Mr Hulme and his father about this possibility. However the first reference to these design changes in any document is at the very end of May 2009, although it was discussed earlier between Mr Hulme and his father. On balance I believe that the change to the design cannot have been implemented in any concrete sense until after the action commenced. It was certainly not communicated to Numatic before proceedings were commenced, and Numatic had no reason to doubt that, as SAS Daniels' letter of 7th May had said, the machine would incorporate the features of the round top. This would not have been the case with the modified machine. The issues The issues which arise for decision are the following: i) What, if anything, was Qualtex threatening to do at the date of the commencement of proceedings? ii) Whether any threat which existed continued following service of the defence; iii) Whether anything which Qualtex threatened to do amounted to passing off. The Law There is no dispute that about the elements which need to be established in order to make good a claim in passing off. In the Jif Lemon case, Reckitt & Colman Products Limited v Borden Limited [1990] 1 WLR 491 at 499 D-H, Lord Oliver said: "The law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. Thirdly he must demonstrate that he suffers, or in a quia timet action that he is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff." A claimant who brings a quia timet action, expressly mentioned by Lord Oliver in that passage, is necessarily obliged to prove the elements of its case (other than its reputation) on a somewhat theoretical basis. In some cases it may be obvious that the threatened acts of the defendant will amount to a misrepresentation and will harm the claimant's goodwill and reputation. In others it may be more difficult. The court's task is not aided by the fact that there will be no opportunity for real instances of confusion to take place. In Neutrogena v. Golden, Jacob J (as he was then) explained the Court's approach at 482: The proper approach of the court to the question was not in dispute. The judge must consider the evidence adduced and use his own common sense and his own opinion as to the likelihood of deception. It is an overall "jury" assessment involving a combination of all these factors, see "GE" Trade Mark [1973] RPC 297 at page 321. Ultimately the question is one for the court, not for the witnesses. It follows that if the judge's own opinion is that the case is marginal, one where he cannot be sure whether there is a likelihood of sufficient deception, the case will fail in the absence of enough evidence of the likelihood of deception. But if that opinion of the judge is supplemented by such evidence then it will succeed. And even if one's own opinion is that deception is unlikely though possible, convincing evidence of deception will carry the day. The Jif lemon case (Reckitt & Colman Products Ltd v. Borden Inc [1990] RPC 341) is a recent example where overwhelming evidence of deception had that effect. It was certainly my experience in practice that my own view as to the likelihood of deception was not always reliable. As I grew more experienced I said more and more "it depends on the evidence." Where the damage relied upon is the diversion of sales from the claimant to the defendant, the evidence must establish that the misrepresentation leads the purchaser to the erroneous conclusion about the source of the goods. It is not enough if the purchaser is merely caused to wonder: see per Jacob LJ in Phones 4U [2006] EWCA (Civ) 244; [2007] RPC 5 at [16]-[17]. It is recognised that it is more difficult to acquire a sufficient reputation and goodwill in the shape or get-up of a product. Whilst the principal function of a brand name is to denote origin, the shape and get up of a product are not normally chosen for such a purpose. A member of the public seeing a product which looks identical to another (a red cricket ball is an example) does not necessarily, or even normally, conclude that they come from the same source. The claimant must prove that the shape of its goods has come to denote a particular source to the relevant public: see Hodgkinson & Corby v Wards Mobility [1994] 1 WLR 1564 per Jacob J at 1573-4. In that case Jacob J asked whether: "the plaintiffs have proved that the shape of their cushion is the "crucial point of reference" for those who want specifically a ROHO cushion… And have they proved that persons wishing to buy a Roho cushion are likely to be misled into buying a Flo'Tair..?" A number of authorities make it clear that great care needs to be taken with survey evidence obtained from members of the public in passing off actions: see e.g. Scott v NicePak [1989] FSR 100. In particular, if the object of the exercise is to establish consumer reaction to seeing a product for the first time, it can be misleading to suggest to the interviewee, by the form of the question, that the product is one which they could already have seen on the market: see per Lewison J in UK Channel Management Ltd v E! Entertainment Television Inc. [2007] EWHC 2339 at [9] to [12] and per Geoffrey Hobbs QC (sitting as a deputy judge of the Chancery Division) in Whirlpool Corp v Kenwood Ltd [2009] RPC 2 at [39]. In the latter case the question asked was simply "what can you tell me about this product". The deputy judge said this: "The answers elicited by these questions are likely to be inconclusive for a number of reasons. Interviewees were invited to talk 'about this product' from a perspective of their own choosing. References to shape and appearance from a trade mark point of view would be random occurrences. There was a risk that the first question would be taken to imply that 'this product' was one which the interviewee was able from experience to 'tell me about', thus nudging interviewees into thinking and speaking of it as a product that was known rather than unknown to them. Interviewees were not asked to indicate whether they were to any degree familiar with either the shape and appearance of [the defendant's product] or the shape and appearance of [the claimant's product]. No relevant trends or patterns could be identified in the answers provided by the different respondents without that information." I agree that answers from surveys of this kind are likely to be inconclusive. Moreover, as Lewison J pointed out in UK Channel Management Ltd v E! Entertainment Television Inc. [2007] EWHC 2339 at [9] to [12], one must beware of witness gathering exercises which are founded on surveys of this kind, because evidence gathered in this way is likely to be tainted. Threat The present action is brought, in effect, as a quia timet action. Although the Qualtex prototype had been exhibited at The Cleaning Show, there is no real suggestion that what was done at the show was likely to amount to passing off. It was quite plain to all concerned that the prototype was a Qualtex product, and those who attended the Show would have known it was nothing to do with Numatic. So the action is one where Numatic must show that they were justified in commencing proceedings because Qualtex were threatening to do acts which would amount to passing off. Numatic recognise that their task is more difficult if the notional purchaser were a member of the cleaning trade: so they concentrate their case on potential sales to the public. Qualtex recognise that, although this was not their primary target market, some sales would inevitably be made to the public. Qualtex's case is that the machine as presented at the Cleaning Show was not only unbranded (as it was), but was also unfinished. They contend that the prototype machine was shown at the Show in order to gauge customer reaction, and that its overall appearance was to be the subject of further change in the light of their own and customers' further ideas. Mr Hulme said that it was as part of this natural process of development that he got the idea of the further changes to the prototype's appearance from seeing a Maytag machine at the show. He obtained a sample Maytag machine in April, and thereafter proposed and implemented the design changes. I cannot accept this characterisation of what occurred. It is, I consider, established on the evidence that at the date of the Show, and thereafter until proceedings were commenced on 19th May, Qualtex were threatening and intending to launch a machine onto the market with substantially the appearance of the prototype. It was, after all, intended to be a replica of the NRV 200 Numatic machine. Qualtex had for long recognised, as Mr Hulme accepted, that there was a large market for a lookalike Henry: the prototype was a product which fitted that description and would appeal to that market. Exhibiting the prototype at the Cleaning Show was not merely an attempt to gauge customer reaction: it was a clear statement of Qualtex's intention to market a replica NRV 200. The Show generated a large demand for the product which Qualtex were keen to satisfy. The change to the Annex B design was not part of the natural development and improvement of the project: it was a radical change to it. The changes resulted, as Qualtex must have appreciated that they would, in a long delay to the production of the modified product. Thereafter it was frequently described in the documents as the "new" machine. The addition of the tool caddy and bumper required changes to the mould of the lid. Whilst I do not doubt Mr Hulme's evidence that he had these ideas in the way he described, the decision to implement them came after the commencement of these proceedings, and not as part of a natural development of the product on show at the NEC. This conclusion is really the only one consistent with the correspondence, the contemporary record and the evidence of what occurred. Did the threat continue? Numatic complain that the undertaking offered in the Defence was confined specifically to the prototype machine. It was not phrased in the way that such undertakings are normally phrased to prevent colourable variations as well. And it was not offered to the Court. They contend that there was still a threat that Qualtex would market a machine with minor and immaterial variations. The gist of the Defence was that there had been no threat to pass off, and that in future Qualtex would sell the Annex B machine and not the prototype. In my judgment there was no longer a threat to sell the prototype or any colourable variation of it after the Defence was served. Qualtex's overall position was that they had done nothing wrong, and that Numatic had jumped the gun by commencing proceedings. Hence no undertaking to the court, which could be regarded as an admission of liability, was offered. But it would be wholly inconsistent with the defence for Qualtex to revert to the prototype or something similar. This finding may have an impact on whether it is necessary to grant an injunction if Numatic are successful in relation to the prototype shown at the Show. It may also potentially have an impact on who is to pay the costs of these proceedings. But I should make it clear that I am deciding neither of those points at this stage: they are best left to argument in the light of my judgment. Passing Off Reputation There is no real dispute that Numatic have a protectable goodwill and reputation in the combination of features of the Henry vacuum cleaner: that is to say the name Henry coupled with the black bowler hat top, a brightly coloured base, the smiley face and the nose. One could readily reach the conclusion without much in the way of evidence that someone who marketed a replica product with all those features would, absent some exceptional additional circumstance, be guilty of passing off. Mr Hulme confirmed this point of view. He said, in effect, that his own investigations showed that the smiley face had a high degree of origin recognition. The first plastic-moulded Henry to be sold with the features of get up relied on was marketed in 1981/2. The bowler hat aspect may have been inspired by a figure of the Homepride flour man which was present in the workshop around the time. It was sold extensively for commercial cleaning: but a significant portion of the public will have come across it at work. About 12 years ago Numatic began receiving requests from large retail outlets to stock the Henry, as members of the public wanted such a cleaner for domestic use, having seen or used the product in the workplace. Now about half are sold in the commercial market and half in the retail market, but there is no clear division between the two markets. Mr Evans gave estimates that the Henry currently enjoys 50% of the total professional market for this type of product, and 3-5% of the much larger domestic market. There is no doubt that Numatic have been successful in educating the public to recognise the Henry vacuum cleaner range as having the appearance of a small, rather rotund and cheeky chappie, with its smiling face, bowler hat and name. For example a newspaper article exhibited by Mr Evans says "The Henrys look like small, squat, smiley-faced, bowler hatted blimp on casters". This was deliberate. Mr Evans explained that the shape was decided on in order to say "Look at me: I'm a bowler–hatted gent!". The anthropomorphic character has been made use of extensively in advertisements, including Littlewoods' advertisements shown on ITV television during prime time. Whilst the red base has the longest history, the public are now used to seeing different coloured bases, all with the black bowler hat top, some with the flange and some without. The real question in the present case is not whether the use by Numatic of the get–up of the Henry has generated a sufficient reputation and goodwill to support a passing off action. The question is rather whether, given that reputation, the sale of the replica (which lacks the smiley face and name, but retains the shape and bowler hat) will make a damaging misrepresentation. Misrepresentation and damage I have decided that the machine which Qualtex were threatening to sell at the date of the commencement of proceedings was a machine to the design of the replica prototype, a photograph of which I have included above. The machine was primarily designed for the commercial market, but it was priced in the range of ordinary domestic vacuum cleaners. The evidence showed that there was no clear division between the commercial and domestic markets. The owner of a large house, a pub-owner, builder or restaurateur would all be in the market for a commercial vacuum cleaner. Mr Hulme accepted that some machines would find their way into retailers. Retailers would not be concerned to restrict sales provided the machine was suitable for the contemplated end use. There is little in the way of evidence as to how this machine would have arrived on the market and the channels through which it would have been sold. Numatic contend that it would have been displayed in shops and showrooms, out of its box. I think it reasonable to suppose that it would have been on sale in this way, at least in some retailers. I proceed on the basis that a member of the public purchasing the machine would at least in the normal course see the box at some stage before completing the purchase. Judging by the way in which the Annex B machine has been sold, it is also likely that it would have appeared on internet sales sites. Some examples of these were in evidence. Numatic submit that the machine would have appeared without any form of branding on the machine itself. They say that this is supported by the fact that the branding stickers were supplied loose in the box, and would not necessarily be applied for display purposes. The purchase of a Qualtex machine to the prototype design made by the claimants in Ireland had the labels loose in the box. I think it is likely that the machines would not have had branding applied to the machine before sale, but would have had the Quick Clean branding on the box. The machine which appeared on websites would have also done so without any branding being shown on the photographs. If a name were to be mentioned in the accompanying text it would be Quick Clean. Numatic supported their case with a survey conducted under the supervision of Mr Malivoire of GfK NOP. Between 1st and 5th April 2009 GfK NOP interviewed 535 respondents aged over 18 across the country. Each interviewer was provided with a photograph of the Qualtex product, as photographed at the Cleaning Show, but with background materials removed. After some classification questions the interviewers were instructed to give the following preamble to the main questions: "I am going to ask you some questions about this product, some of which may seem a little repetitive" The questions were: (1) What can you tell me about this product? (2) Have you got one? (3) Can you tell me what it is called? (4) If you needed a new one, would you think of buying one of these vacuum cleaners? (5) Why do you say that? Mr Kelly, a market research expert called on behalf of Qualtex criticised these questions. He said that those with the most obvious weaknesses were Q2 and Q3. Nevertheless he considered that Q1, together with the immediately preceding preamble was misleading in referring to "this product", thereby encouraging the respondent to think that they might well know something about this product or be in some way familiar with it. In his witness statement he said this: "This is a circumstance with which we market researchers are familiar and which we seek to avoid. The reason we seek to avoid this is that it again forces the respondent to create their own context to the question, and makes it likely they will speculate. Most respondents will wish to make what they perceive to be helpful comments rather than say nothing. Moreover, the respondent is likely to give a different answer from the one they would have given had they not been forced to create their own context, but been put properly in the picture by the interviewer. Thus, for example if the respondent is led to believe that the product is one they may have seen or which they may know something about, they are likely to jump to the conclusion that it is in fact a product they have seen and know something about." I think this is a genuine defect from which almost all the questions in the survey suffered. What the respondents were likely to be thinking in response to the question is "what product does this most remind me of?". The results of the survey have to be considered with this in mind. Mr Malivoire's analysis of the results was that of the 535 respondents interviewed, some 57.5% mentioned Henry at some point or gave an answer which obviously related to the Henry. His further analysis concluded that 48% clearly indicated that they believed the image was that of a Henry or to be from the same range as Henry. Because of the detailed and more extensive criticism of Q2 and subsequent questions, I asked that a separate analysis be performed of the answers to Q1 alone. Numatic submitted that 89 respondents were people about whom there could be little argument that they thought the product in the picture was a Henry, and a further 23 could be added if one took a rather more generous approach to this category. A further 88 respondents are people who gave an answer such as "it looks like a Henry". Qualtex submitted that 83 respondents said it was a Henry, 88 respondents said it is like a Henry or looks like a Henry. Viewed in this light, it is fair to say that these survey results are less emphatic than they might otherwise be thought to be. It has to be recalled that there is really no dispute in this action that the prototype looks like a Henry. It is therefore with the first category - those who think it is a Henry - with which one is primarily concerned. Moreover, the first survey question could not, even if completely unobjectionable, conclude the principal issue which I have to decide which is whether any member of the public would have bought the Qualtex replica believing it to be a Henry. Mr Baldwin QC, who appeared for Qualtex, had numerous other criticisms of the survey as well. For example he pointed out that the stimulus in the form of the photograph of the machine gave no indication of size. Interviewers had disregarded instructions about prompting and probing. I have taken these criticisms into account, but even after doing so I think the survey provides enough evidence for me be confident that the shape and bowler hat form prompt a strong recognition of the Henry. Whether that recognition is sufficiently strong to conclude that purchasers will be misled is a separate question, and one on which I prefer to rely on the oral evidence of the witnesses called. From the 535 respondents, Numatic served witness statements supported by a Civil Evidence Act Notice from some 25. Some were prepared to give oral evidence and were cross examined at the trial. The witnesses who were called all agreed that they would take care over the purchase of a vacuum cleaner to make sure they were getting what they wanted. Most if not all agreed that an NRV 200 with a yellow top, blue base and yellow/black square logo (Trial Bundle J1 page 3) would not be mistaken for a Henry. Most would notice the absence of branding on the Qualtex replica, and expect branding to be present when they made a purchase. When it came to the crucial question of whether they would buy the Qualtex replica in the mistaken belief it was a Henry, their evidence can be summarised as follows: Ms Lovett said that she would not have bought it because it did not have the smiley face. Mr Keane said that he would know it was not a Henry because of the colour: but it could well be a Numatic industrial. He would certainly look to check that he was getting what he was paying for. Ms Lockwood said that if there were no branding she would assume it was a Henry. Dr Rooney said that if he saw the replica in a shop he would have thought it was a Henry. Although he said he would confirm the make and model before leaving the shop, I was not persuaded that this meant that he would have asked the right question to determine that the product was not a genuine Henry. Mrs Moemken's questionnaire answers suggested that she would probably buy the prototype thinking it was a Henry. In cross-examination she said that she would hope that she would notice the absence of the smiley face and the name, and that she thought she would not get it to the cash register thinking it was a Henry. Her answers were typical of a number of witnesses who were reluctant to admit that they would make a mistake after being reminded of the care which they would normally take on making such a purchase. On the whole I felt that Mrs Moemken thought there was a risk that she could have bought it thinking it was a Henry. Mr Marchant said he would probably ask a salesperson who made the product whether it was a new product in the Henry range. Mr Chessor said that he would have noticed the absence of the face and name, but said that "Henry might have taken the smiley face off". It was put to him that he would have looked at the product information to see what the product really was, which he agreed. But this of course does not mean that he would establish that it was not made by manufacturers of Henry. Mr Dorricott said that he had identified the product in the photograph because it looked like a Henry. However (as a Henry owner) he would be looking to replace it with what he knew and he said that "I do not know that" - meaning the prototype - "from Adam to Eve". Mrs Kelly said that if she was in the shop she would notice that the product did not have the smiley face or the name, and that this would make her question that it was not a real Henry: as a cautious purchaser she would make sure she got a Numatic Henry. Miss Terry was shown some photographs of other tub vacuum cleaners which she considered "totally different". She said she "probably would" check to see whether the Qualtex product was actually made by the people who made Henry. She would notice it did not have the name and smiley face. Oddly, when questioned about her responses to the interview she said that she had thought it was a Henry in the interview because of the smiley face. Mr Bloch, who appeared for Numatic, attacked this evidence as having been obtained by a series of leading questions. By way of illustration he put to Mr Kelly a questionnaire made up of some of the leading questions asked of the interviewees in cross-examination and asked for a critique of that. Not surprisingly, Mr Kelly condemned it. Nevertheless, the cross-examination of the interviewees did enable me to form an assessment of the robustness of their views expressed in answer to the survey, when it came to a real purchasing situation. If I were to disregard the cross-examination, Numatic would have no real support for their contention that real purchasers would be deceived. The reaction of the interviewees to the yellow/blue NRV 200 cleaner at J1/3 has to be considered in the light of the fact that it does not have the black lid which is an important feature of the get-up taken by Qualtex. By the time one gets to the J1/3 cleaner one has taken away the name, the smiley face and the bowler hat. What it does show is that the features of shape alone are probably not sufficient to cause confusion provided that there is some really striking get-up to take out of the norm of what would be expected for a Henry. This, of course, is not the case in relation to the Qualtex replica. In the end I felt that the evidence of the members of the public provided support for the view that there would be origin confusion if the Qualtex replica was sold in the way in which Qualtex threatened, even taking into account the way in which their evidence had first been obtained. The overall impression given by the evidence was that the replica prototype did convey quite a strong message that it was a genuine Henry, and that there was a real likelihood that at least some members of the public would buy it thinking it was a Henry. I have to say that this evidence confirms my own impression, for reasons which I explain below. First of all, I am satisfied that this is not a case like the cushion case (Hodgkinson & Corby v Wards Mobility) where it is simply the shape of a functional article which is relied on. As both sides recognise, the Henry vacuum cleaner is seen by the public as having the appearance of a small person. To that extent, the shape has a secondary meaning. Secondly, I do not find it at all implausible to suppose that members of the public will still recognise the product even if one or more of the elements which give it that character are removed, provided enough remains to convey the same message. The public are perfectly capable of recognising a Henry without the smiley face, although I accept that their degree of confidence may be rather less than if the smiley face and name were there. It is true that, in creating this recognition, Numatic have used a combination of the overall shape, the shiny bowler hat, the name and the smiley face. As I have said, the presence of all these features undoubtedly conveys the message that the product is a genuine Henry. But this does not mean that it necessarily follows that the absence of one or more of these features is sufficient to distinguish a replica product from the original. The answers in relation to JI/3 show that if there is no smiley face, no name and no black bowler hat confusion may be avoided. But the position need not be the same with the Qualtex replica, which retains in addition the shiny black bowler hat, which was established to be a well recognised feature of the get-up. I do not accept that the omission of the face and the name was sufficient to avoid passing off: in my judgment not all sensible purchasers would be put on enquiry by their absence. The public have been educated to recognise the overall shape combined with the black bowler hat as indicia of a genuine Henry. Once consumers think they recognise a product they do not necessarily conduct an analysis of all the reasons which have led them to that belief. They first have to pause sufficiently to notice the absence of the face and name. Like some of the witnesses, they may think that they have been taken off to give the Henry a more serious professional look. It will be recalled that Qualtex indicated that they would use branding sufficient to avoid confusion, both in the correspondence and in the email sent on the eve of the Show. In the end this turned out to be the name "Quick Clean Equipment". I do not think that this branding would be adequate to avert the risk of confusion for a number of reasons. Firstly, a significant proportion of members of the public have not heard of Numatic and do not know that is Numatic who manufacture the Henry. Mr George Hulme said so in terms in a letter written to Numatic around the time of the Show. It follows that a different brand name will not alert members of the public to the fact that the product is not a genuine Henry. Secondly, the Quick Clean name is not one to which any reputation or goodwill attaches, as Mr Philip Hulme accepted: so it conveys no message itself about a different origin. Thirdly the name Quick Clean is a highly descriptive one. Fourthly, as I have indicated above, the product is likely to be displayed in some retailers without branding. All this falls far short of the "serious and effective steps" to avoid passing off promised by Mr Hulme, or the "active steps … to positively distinguish" foreshadowed by the correspondence. Although I accept that a moderate amount of care will be exercised by purchasers in the course of buying a vacuum cleaner, there will clearly be a spectrum of carefulness of purchaser ranging from the meticulous to the hurried and distressed. Insofar as that required any evidence, it was supplied by witnesses from the trade. This again makes the case significantly different from the cushions case, Hodgkinson & Corby v Wards Mobility, where the evidence showed that professionals would be involved in purchasing. Moreover, it is not clear that careful enquiry will necessarily ensure that the purchaser does not get the wrong product. The witnesses agreed with the proposition that one would check that what one was getting was what one was paying for, but it was not always properly explored with them what questions they would be led to ask. Thus they might ask who the manufacturer was. But the public are not in general aware of the identity of the manufacturer of the Henry, and will equally never have heard of Quick Clean Equipment. They would have to ask whether it was made by the same people as made the Henry before any passing off confusion could be avoided. I am not persuaded that all members of the public who otherwise took the prototype to be a Henry, would ask that question. Numatic also relied on two other ways in which the sale of the prototype might cause damage. One was based on the suggestion that someone seeing a broken down Qualtex replica might attribute its failure to the makers of Henry, with consequent injury to goodwill. The other is that Henry spare parts might be ordered for the replica. I see no need to place reliance on either of these, although they provide a makeweight for the conclusion I have reached. The own-branded Qualtex replica would be indistinguishable from a genuine own branded NRV 200, so it is likely that some damage would occur in this way as well. In the result the quia timet passing off action succeeds. I will hear counsel on the appropriate orders in the light of this judgment.

This is an appeal by Clarke Kiernan, a firm of solicitors in Tonbridge, against the decision of the Legal Services Commission to disallow a fee for a sentencing hearing following committal for sentence. The solicitors were instructed to represent 2 defendants, Shaun Sturmer and Lee Lewis, who were each charged with affray. They were both committed for sentence to Maidstone Crown Court where they were sentenced on 25th April 2008. Sturmer and Lewis had each been granted a separate representation order by the Central Kent Magistrates' Court and I note that the case numbers recorded on the representation orders are different. However when the matter was dealt with in the Crown Court both defendants were listed under the same case number. The solicitors claimed a fee of £250 for each defendant. In relation to Sturmer they claimed £42.60 for travelling expenses and in relation to Lewis they claimed £63.45 for travelling expenses. However the Commission allowed only one fee; although it allowed both sets of travelling expenses. In its letter dated 12th July 2008 the Commission explained: As there is only one case number there can be only one payment, it is irrelevant that they are two separate cases. This is in accordance with the Litigator Graduated Fee Scheme Guidance at section 2.3.29. Please note the travel for both cases have been paid. When the solicitors requested a review of that decision the Commission explained in its letter dated 18th August 2008: The LF1 claim which you submitted confirmed that the 2 co-defendants have the same case number, S20080083. In the Litigator Graduated Fee Scheme, each case number may be billed as a separate claim, and graduated fees are subject to a multiple defendant uplift. The amount of defendant uplift can be found in Schedule 2, Part 3, page 39 of the Criminal Defence Service (Funding) (Amendment) Order 2007. However the defendant uplift does not apply to fixed fee cases, such as committals for sentence. Litigators' fees are now prescribed by Schedule 2 to the Criminal Defence Service (Funding) Order 2007 (as substituted by SI 2007/3552). Part 1 of the Schedule sets out some general provisions of definition and scope, part 2 provides for graduated fees for guilty pleas, cracked trials and trials, and part 3 provides for fixed fees. Under the heading "Fees for appeals and committals for sentence hearings" paragraph 12 (which falls within part 3) provides: The fee payable to a litigator instructed in – ….. (c) a sentencing hearing following a committal for sentence to the Crown Court is that set out in the table following paragraph 14. For a "committal for sentence" the table provides a "fee payable (£ per proceedings)" of £212.77, which with value added tax at 17.5% would give a gross figure of £250. It is not in issue that the solicitors' entitlement to fees for representing these 2 defendants arises only under paragraph 12. The only issue on the appeal is whether, in the circumstances of this case, paragraph 12 and the table following paragraph 14 entitle the solicitors to 2 fees or only one. The solicitors' grounds of appeal emphasised the definition of "case" in paragraph 1 of schedule 2, viz.: "proceedings in the Crown Court against any one assisted person – ….. (b) arising out of … a single committal for sentence". However Mr Edwards, who represented the solicitors at the hearing of the appeal, appeared to concede that the emphasis may have been misdirected as "case" in fact plays no part in either paragraph 12 or the table. Mr Edwards submitted that on a committal for sentence each defendant should be viewed independently. Where two defendants were tried or dealt with together in the magistrates' court, one may be committed for sentence and the other not. Obviously if both are committed the sentencing judge would have to consider each defendant separately. There would be little common work. While I accept that and while I accept that it may be perceived to be unfair that a solicitor representing 2 defendants is paid the same fee as a solicitor representing one, this appeal can turn only on the wording of the regulations. For the same reason, while I have considered paragraph 2.3.29 of the Litigator Graduated Fee Scheme Guidance published by the Commission, it has not affected (or assisted) my interpretation of the regulations. The table following paragraph 14 entitles a litigator to a fee of £212.77 net "per proceedings". "Proceedings" is not defined in the Funding Order. However it is clear that "proceedings" may involve more than one defendant, in distinction to the definition of "case": see for example the definition of "related proceedings" in article 2 and provisions such as paragraph 17 of schedule 2 to which I refer below. It seems to me that the combined effect of paragraph 12 and the table following paragraph 14 is that where a solicitor is "instructed in … a sentencing hearing following a committal for sentence to the Crown Court" [para 12] the "fee payable" [para 12 and the table] is "£212.77 per proceedings" [the table]. "Proceedings" can involve more than one defendant and if there is only one "proceedings" only one fee will be payable however many defendants are represented by the solicitor. That would appear to be consistent with the scheme of schedule 2 which generally allows one fee where a litigator represents more than one defendant but allows an uplift for representing additional defendants. However no uplift is prescribed in relation to the hearings listed in paragraph 12. Had it been intended that there should be an uplift for representing more than one defendant on a sentencing hearing following committal for sentence, provision could easily have been made for that; perhaps along similar lines to paragraph 17 which provides for uplifts "where a litigator represents more than one assisted person in [sent or transferred] proceedings" which are discontinued. The interpretation that I have suggested would also seem to be consistent with the use in the table of the word "proceedings". Had it been intended that a separate fee would be payable for each defendant committed for sentence, the table could have provided for a fee payable per "case" (with the limited definition of that word provided by paragraph 1 of schedule 2). As it would appear that these 2 defendants were dealt with at the Crown Court together at one hearing with the same case number, the solicitor instructed on the sentencing hearing is entitled to only one fee for those "proceedings". Accordingly the appeal is dismissed. Mr Edwards told me that my decision may affect a large number of cases. On that basis and as this is solely a question of interpretation of the Funding Order I would be willing

Case C-473/04 Plumex v Young Sports NV (Reference for a preliminary ruling from the Hof van Cassatie) (Judicial cooperation – Regulation (EC) No 1348/2000 – Articles 4 to 11 and 14 – Service of judicial documents – Service through agencies – Service by post – Relationship between the methods of transmission and service – Precedence – Time-limit for an appeal) Summary of the Judgment Judicial cooperation in civil matters – Service of judicial and extrajudicial documents – Regulation No 1348/2000 (Council Regulation No 1348/2000, Arts 4 to 11 and 14) Council Regulation No 1348/2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters must be interpreted as meaning that it does not establish any hierarchy between the method of transmission and service through agencies under Articles 4 to 11 thereof and the method of service by post under Article 14 thereof and that, consequently, it is possible to serve a judicial document by one or other or both of those methods. First, neither the recitals in the preamble to the regulation nor its provisions state that a method of transmission and service, used in accordance with the rules of the regulation, would rank below the method of service through agencies. Secondly, in the light of the spirit and purpose of the regulation, which is intended to ensure that judicial documents are served effectively, while respecting the legitimate interests of the persons on whom they are served, and in view of the fact that all the methods of service provided for by the regulation can ensure, as a rule, that those interests are respected, it must be conceivable to use one or other, or indeed two or more at once of those methods of service which appear the most suitable or appropriate in light of the circumstances of the case. Consequently, where service is being effected both through agencies and by post, in order to determine vis-à-vis the person on whom service is effected the point from which time starts to run for the purposes of a procedural time-limit linked to effecting service, reference must be made to the date of the first service validly effected. In order not to render meaningless the provisions of the regulation governing those methods of service, all the legal effects which follow when one of those methods is validly effected must be taken into account irrespective of subsequent successful service by another method. Moreover, the regulation is intended to expedite the transmission of judicial documents for service and, therefore, the conduct of judicial proceedings. If, for the purposes of computing a procedural time-limit, the first service of the document in question is taken into consideration, the person on whom that document is served is required to defend judicial proceedings earlier, which can enable the competent court to give a ruling within shorter time-limits. (see paras 20-21, 28-32, operative part) JUDGMENT OF THE COURT (Third Chamber) 9 February 2006 (*) (Judicial cooperation – Regulation (EC) No 1348/2000 – Articles 4 to 11 and 14 – Service of judicial documents – Service through agencies – Service by post – Relationship between the methods of transmission and service – Precedence – Time-limit for an appeal) In Case C-473/04, REFERENCE for a preliminary ruling under Articles 68 EC and 234 EC from the Hof van Cassatie (Belgium), made by decision of 22 October 2004, received at the Court on 9 November 2004, in the proceedings Plumex v Young Sports NV, THE COURT (Third Chamber), composed of A. Rosas, President of the Chamber, J. Malenovský (Rapporteur), A. La Pergola, S. von Bahr and A. Borg Barthet, Judges, Advocate General: A. Tizzano, Registrar: R. Grass, having regard to the written procedure, after considering the observations submitted on behalf of: – the Austrian Government, by C. Pesendorfer, acting as Agent, – the Finnish Government, by T. Pynnä, acting as Agent, – the Swedish Government, by A. Falk, acting as Agent, – the United Kingdom Government, by E. O’Neill, acting as Agent, – the Commission of the European Communities, by A.‑M. Rouchaud-Joët and R. Troosters, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 17 November 2005, gives the following Judgment 1 This reference for a preliminary ruling concerns the interpretation of Articles 4 to 11 and 14 of Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (OJ 2000 L 160, p. 37, ‘the Regulation’). 2 The reference was made in the course of an appeal brought by Plumex against the Hof van Beroep te Gent’s dismissal for being out of time of an appeal against a judgment at first instance ruling on a dispute between Plumex and Young Sports NV. Relevant provisions Community legislation 3 In the words of the second recital in the preamble to the Regulation, the proper functioning of the internal market entails the need to improve and expedite the transmission of judicial and extrajudicial documents in civil or commercial matters for service between the Member States. 4 The Regulation thus has the objective of improving efficiency and speed in judicial procedures by establishing the principle of direct transmission of judicial and extrajudicial documents. 5 Article 1(1) provides that the Regulation is to apply in civil and commercial matters where a judicial or extrajudicial document has to be transmitted from one Member State to another for service there. 6 Chapter II of the Regulation contains provisions which provide for various means of transmission and service of judicial documents. It is divided into two sections. 7 Section 1 of that chapter, comprised of Articles 4 to 11, relates to the first method of transmission and service (‘service through agencies’), under which a judicial document to be served is first to be transmitted directly and as soon as possible between the agencies designated by the Member States, referred to as ‘transmitting agencies’ and ‘receiving agencies’. Next, the receiving agency is itself to serve that document or have it served, either in accordance with the law of the Member State addressed or in the particular manner requested by the transmitting agency, unless such a method is incompatible with the law of that Member State. 8 Article 7 of the regulation provides that all steps required for service of the document are to be effected as soon as possible. 9 Section 2 of Chapter II of the Regulation provides for ‘[o]ther means of transmission and service of judicial documents’, namely transmission by consular or diplomatic channels (Article 12), service by diplomatic or consular agents (Article 13), service by post (Article 14) and direct service (Article 15). 10 As regards service by post in particular, Article 14 of the Regulation provides: ‘1. Each Member State shall be free to effect service of judicial documents directly by post to persons residing in another Member State. 2. Any Member State may specify, in accordance with Article 23(1), the conditions under which it will accept service of judicial documents by post.’ 11 According to the information communicated by the Member States in accordance with Article 23 of the Regulation (OJ 2001 C 151, p. 4), as amended, inter alia, by its first update (OJ 2001 C 202, p. 10), the Portuguese Republic has accepted service by post, provided it is made by registered letter with advice of delivery and is accompanied by a translation. National legislation 12 Under Article 1051 of the Belgian Judicial Code the time-limit for lodging an appeal is one month from service of the judgment. 13 Under the same provision, read in conjunction with Article 55 of the Judicial Code, the time-limit for an appeal is extended by 30 days if one of the parties on which the judgment is served does not reside or have a registered address or an address for service in Belgium, where that party resides in a European country other than the United Kingdom or the countries bordering on Belgium. 14 Article 40(1) of the Judicial Code provides that, as regards persons who do not have a known residence or registered address or address for service in Belgium, the copy of the document is to be sent by the process server by letter registered with the postal service to their residence or their registered address abroad and service is deemed to have been effected when the document is handed to the postal service in return for a certificate of posting, in accordance with the formal requirements under that article. The main proceedings and the questions referred for a preliminary ruling 15 Plumex, a company incorporated under Portuguese law with a registered office in Portugal, was served at its address in Portugal with a judgment from a Belgian court of first instance delivered in a case between Plumex and Young Sports NV. Service was effected both through agencies and by post. 16 On 17 December 2001, Plumex lodged an appeal against that judgment before the Hof van Beroep. That court dismissed the appeal for being out of time, holding that the time-limit for an appeal provided for in Article 1051 of the Belgian Judicial Code had expired on 11 December 2001 since the period had begun to run on the day on which the first service was validly effected, in this case the service by post. 17 Plumex brought an appeal against that decision before the Hof van Cassatie, claiming that the Regulation had to be interpreted as meaning that service through agencies constituted the primary method of service taking precedence over service by post. Accordingly, the time-limit for an appeal must be calculated from the date of the ‘primary’ service – which took place after the service by post – since the latter was only ‘secondary’ service. 18 In those circumstances, the Hof van Cassatie decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) Is the service contemplated by Articles 4 to 11 the primary method of service and service directly by post contemplated by Article 14 a secondary method of service, whereby the former method takes precedence over the latter when both are effected in accordance with the legal requirements? (2) In the case of service being effected twice, once in accordance with Articles 4 to 11, and once directly by post in accordance with Article 14, does the time-limit for an appeal begin to run against the person on whom service was effected on the date of the service effected in accordance with Articles 4 to 11 and not on the date of service in accordance with Article 14?’ On the questions referred for a preliminary ruling The first question 19 By its first question, the national court asks, essentially, whether any hierarchy exists between service through agencies and service by post, whereby the first method takes precedence over the second where both have been validly effected. 20 It must be observed at the outset that there is nothing in the wording of the Regulation to indicate that it introduced a hierarchy between those methods of service. Neither the recitals in its preamble nor its provisions state that a method of transmission and service, used in accordance with the rules of the Regulation, would rank below the method of service through agencies. 21 Moreover, it follows from the spirit and purpose of the Regulation that it is intended to ensure that judicial documents are served effectively, while respecting the legitimate interests of the persons on whom they are served. Although all the methods of service provided for by the Regulation can ensure, as a rule, that those interests are respected, it must be conceivable, in view of that purpose, to use one or other, or indeed two or more at once of those methods of service which appear the most suitable or appropriate in light of the circumstances of the case. 22 In view of the foregoing, the answer to the first question must be that the Regulation does not establish any hierarchy between service through agencies and service by post and, consequently, it is possible to serve a judicial document by one or other or both of those methods. The second question 23 By its second question, the national court asks, essentially, to the date of which service must reference be made to determine vis-à-vis the person on whom service is effected the point from which time starts to run for the purposes of a procedural time-limit linked to effecting service where service is being effected both through agencies and by post. 24 In the observations which they submitted to the Court, the Austrian Government and the Commission of the European Communities state that they are uncertain as to whether the Court has jurisdiction to answer that question, since it concerns only the interpretation of national law. Where a Member State makes it possible to serve a judgment in various ways, the time-limit for an appeal starts to run under Belgian law, as a rule, from the first service which was valid. That date is determined in accordance with the law of the Member State addressed and, in any event, in accordance with national law, 25 In that respect, it should be recalled that, according to settled case-law, it is solely for the national courts before which actions are brought, and which must bear the responsibility for the subsequent judicial decision, to determine in the light of the special features of each case both the need for a preliminary ruling in order to enable them to deliver judgment and the relevance of the questions which they submit to the Court. Consequently, where the questions referred involve the interpretation of Community law, the Court is, in principle, obliged to give a ruling (see, inter alia, Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 38, and Case C-18/01 Korhonenand Others [2003] ECR I-5321, paragraph 19). 26 The second question relates to the relationship between the various methods of service provided for by the Regulation and it therefore involves the interpretation of Community law. 27 Accordingly, the Court is obliged to give a ruling. 28 As to the substance, first of all it follows from the answer to the first question that no hierarchy exists between service through agencies and service by post. 29 Secondly, in order not to render meaningless the provisions of the Regulation governing those methods of service, all the legal effects which follow when one of those methods is validly effected must be taken into account irrespective of subsequent successful service by another method. 30 Finally, it must be observed that, in accordance with the second recital in the preamble thereof, the Regulation is intended to expedite the transmission of judicial documents for service and, therefore, the conduct of judicial proceedings. If, for the purposes of computing a procedural time-limit, the first service of the document in question is taken into consideration, the person on whom that document is served – to whom such a time-limit applies – is required to defend judicial proceedings earlier, which can enable the competent court to give a ruling within shorter time-limits. 31 It follows from all those considerations that, where service is effected more than once in accordance with the Regulation, account must be taken of the service effected first. There is nothing in the Regulation to preclude the application of such an approach to the relationship between service through agencies and service by post. Accordingly, where service is effected by both those methods, in order to determine vis-à-vis the person on whom service is effected the point from which time starts to run for the purposes of a procedural time-limit linked to effecting service, reference must be made to the date of service by post, where that occurred first. 32 That conclusion does not adversely affect in any way the interests of the person on whom a judicial document is served since the first service validly effected enables him in fact to become acquainted with the document and to have a sufficient period of time in which to defend the proceedings. The fact that he is subsequently served with the same judicial document by a different method does not alter the fact that the first service has already complied with those requirements. 33 The answer to the second question must therefore be that, where service is being effected both through agencies and by post, in order to determine vis-à-vis the person on whom service is effected the point from which time starts to run for the purposes of a procedural time-limit linked to effecting service, reference must be made to the date of the first service validly effected. Costs 34 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 (Third Chamber) hereby rules: 1. Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters must be interpreted as meaning that it does not establish any hierarchy between the method of transmission and service under Articles 4 to 11 thereof and that under Article 14 thereof and, consequently, it is possible to serve a judicial document by one or other or both of those methods. 2. Regulation No 1348/2000 must be interpreted as meaning that, where transmission and service are effected by both the method under Articles 4 to 11 thereof and the method under Article 14 thereof, in order to determine vis-à-vis the person on whom service is effected the point from which time starts to run for the purposes of a procedural time-limit linked to effecting service, reference must be made to the date of the first service validly effected. [Signatures] * Language of the case: Dutch.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 921 of 1968. Appeal by special leave from the judgment and order dated January 8, 1968 of the Kerala High Court in Writ Appeal No. 79 of 1967. V. Gupte and A.S. Nambiar, for the appellant. Sarjoo Prasad and M.R.K. Pillai for respondent No. 1. M. Kuruvilla, Sardar Bahadur, Vishnu Bhadur Saharya Yougindra Khushalani, for respondent No. 2. The judgment of the Court was delivered by Bachawat, J. The appellant challenges the scheme nationalisation of road transport services in respect of 9 routes in the districts of Ernakulam and Kottayam. Chapter IVA the Motor Vehicles Act, 1939 deals with nationalisation of road transport services. Section 68C provides for the preparation and publication of a draft scheme of nationalization of road transport services in general or any particular class of such service in relation to any area or route or portion thereof whether to the exclusion, companyplete or partial, of other persons or otherwise. Section 68D provides for the filing of objections of persons affected by the scheme, for the companysideration of the objections by the government, for modification or approval of the scheme by the government and for publication of the approved or modified scheme. Section 68E provides that a scheme finally settled under sec. 68D may at any time be cancelled or modified by the State transport undertaking. The procedure laid down in secs. 68C and 68D shaH, so far as it can be made applicable, be followed in every case where the scheme is proposed to be modified as. if the modification proposed were a separate scheme. For the purpose of giving effect to the approved scheme in respect of a numberified area or a numberified route sec. 68F 2 iii authorises the Regional Transport Authority to modify the terms of an existing permit so as to curtail the area or route companyered by the permit in so far as such permit relates to the numberified area or numberified route. Section 68 authorises the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV A and in particular to provide the form in which any scheme or approved scheme may be published under secs. 68C and 68D. In exercise of its powers under sec. 68 I the State Government framed the Kerala Motor Vehicles State Transport Undertaking Rules, 1960. Rule 3 provides that every proposed scheme shall be in form I when it is in companyplete exclusion of existing road transport service, in form when the scheme is in partial exclusion of existing road transport service, in form III when the scheme is in supplementation of existing road transport service and in form IV when the scheme is to modify an existing scheme. On December 15, 1965 the Kerala State Transport Corporation published a draft scheme in form II for nationalization of 9 specified routes in the districts of Ernakulam and Kottayam in partial exclusion of the existing passenger transport services companycerned, giving the particulars of the stage carriage permits to be excluded. On October 17, 1966 after hearing the objectors the State Government approved the scheme. On October 24, 1966 the government published the approved scheme. On December 7, 1966 the appellant filed a writ petition in the Kerala High Court to quash the scheme. P. Gopalan Nambiyar J. dismissed the petition. A Divisional Bench of the High Court affirmed his order. The present appeal has been filed after obtaining special leave. The appellants companytention is that the impugned scheme is a companyplete exclusion scheme and should have been in form I and as it is in form Ii it is in companytravention of Rule 3 read with sec. 68C and is therefore invalid. Let us examine this companytention. The scheme is in respect of 9 specified routes. The scheme excludes all private operators holding stage carriage. permits for those routes. Take the route Kottayam-Ernakulam. All the private operators holding stage carriage permits for that route are excluded. It is therefore argued that the scheme is one of companyplete exclusion. But it appears that there are 33 existing routes partially overlapping the numberified routes. The 33 existing routes and the numberified routes have many companymon road sectors. The scheme does numbert interfere with the services on the 33 routes. In spite of the scheme the public can get services on the companymon road sectors from the operators running on the 33 routes. Take the numberified Kottayam- Ernakulam route. There is an existing Kottayam-Muttupetty route. A portion of the Kottayam-Muttupetty route overlaps the Kottayam-Ernakulam route. The impugned scheme does number exclude the services of the operators of the Kottayam-Muttupetty route on the road sector companymon to the Kottayam-Ernakulam and Kottayam-Muttupetty routes. On these facts, it is impossible to. say that the impugned scheme is one of companyplete exclusion. Section 68C envisages schemes of road transport services in relation to any area or route or portion thereof whether to the exclusion, companyplete, or partial of other persons or otherwise. Rule 3 of the Kerala Motor Vehicles State Transport Undertaking Rules, 1960 speaks of schemes of road transport service in companyplete or partial exclusion of existing road transport services. From the language of sec. 68C and Rule 3 it appears that a companyplete exclusion scheme in relation to. any area or route would be a scheme which companypletely excludes the existing road services of private operators on the, area or route in question. The route includes the highway over which it runs. If other existing services are allowed to companytinue over a part of the highway relating to the numberified route the scheme. is number one of companyplete exclusion. A stage carriage permit is granted under secs. 46 to 48 for a specified area. The words roads included in the proposed route or area in sec. 47 1 f implies that a route includes the road or the physical track. Section 68F 2 iii implies that a portion of the route of an existing permit may relate to a numberified route. This happens when the two routes have a companymon road sector Section 68F 2 iii authorises the exclusion of the companymon portion of the road from the existing permit for giving effect to. the scheme for the numberified route. For the purposes of Chapters. IV and IVA there is numberpractical distinction between the route or the numberional line from one terminus to another for which the permit is granted and the road over which the transport services are run and operated. As pointed out in Nilkanth Prasad Ors. v. State of Bihar 1 the distinction between route as the numberional line and road as the physical track disappears in the working of Chap. IVA. The route is also an area. see Kondala Rao v. Andhra Pradesh S.T.C. Corporation 2 C.P.C. Motor Service v. State of Mysore 3 . The impugned scheme does number exclude the road transport services of the 33 existing routes over many sections of the highways relating to the numberified routes. It follows that the scheme is number in companyplete exclusion of existing road transport services in respect of the numberified routes and is number required to be in form I. There is numberinfirmity in the scheme because it was in form II. The impugned scheme is in partial exclusion of operators from Kottayam-Ernakulam and Kottayam-Eratupettah routes and 7 other routes. It is companymon case that there were earlier schemes relating to the Kottayam-Ernakulam and Kottayam-Eratupettah routes. In so far as the impugned schemes excludes private operators from those routes, it has the effect of modifying the earlier schemes. The appellants companytention is that the impugned scheme is invalid as the modification of the earlier schemes were made without companyplying with the provisions of sec. 68E. In our opinion, this companytention is baseless. The new scheme has been proposed and approved after following the procedure laid down in secs. 68C and 68D. In so far as the new scheme modities the earlier schemes, the modifications companyld be made under sec. 68E. As the procedure laid down in sees. 68C and 68D were followed the companyditions of sec. 68E were satisfied. 68E does number require that the new scheme should expressly say that it cancels or modifies the earlier schemes. On the promulgation of the new scheme the earlier schemes stand modified by implication pro tanto. A scheme to modify an existing scheme simpliciter is required by Rule 3 of the Kerala Motor Vehicles State Transport Under- 1 1962 Suppl. 1 S.C.R. 728 at 737. A.I.R. 1961 S.C. 82 at 93. 3 1962 Supp. I.S.C.R. 717 A.I.R. 1966 S.C. 1661. taking Rules, 1960 to be in Form IV. The impugned scheme was in Form H as it was in partial exclusion of the existing road transport service. Such a scheme companyld number be in form IV. The partial exclusion scheme was rightly proposed in form Ii and when approved it had the effect of modifying the earlier schemes. Counsel suggested that the approval of the scheme by the State Government on October 17, 1966 was defective as the Government was merely of the opinion that the proposed scheme was necessary to provide efficient, adequate and company ordinated road transport services and it did number form the opinion that the scheme was necessary to provide economical road transport service. The point was number taken in the companyrts below and we therefore indicated in the companyrse. of the arguments that the appellant will number be permitted to raise. this point at this late stage. Several other objections were taken in the companyrts below but they are number pressed in this Court.

MR JUSTICE McCOMBE: I have before me a claim for judicial review brought by Farhiya Adow against the London Borough of Newham. The claim is brought by leave granted by Mr Rabinder Singh QC, sitting as a Deputy Judge of the High Court, on 23 December 2009. The claim that was brought by Mrs Adow in her claim form was for two heads of relief: first, an order quashing the decision of the defendant of 29 April 2009 and/or 15 May 2009 refusing medical priority for the claimant's re-housing application; and, secondly, a declaration that the defendant is not entitled to delegate medical assessments under their allocation policy to Dr Keen or to any other third party. In short, the background to the claim was that Mrs Adow's family circumstances had been over the years subject to some change. She had acquired a partner and children. The one-bedroom accommodation in which she was housed was, I think it is accepted, not adequate for her purposes. It was said on her behalf that the cramped conditions and the damp condition of them was giving rise to health problems to one of her children and to her mother who resided with her. The claimant Mrs Adow asked for priority therefore to be given to her re-housing needs for those reasons and for that purpose to have a medical assessment of her family members' position carried out. The claim for that re-assessment was supported by evidence from a consultant paediatrician in respect of the child and of the general medical practitioner in respect of Mrs Adow's mother and by an environmental health officer, each of whom testified to the unsatisfactory nature of the accommodation on health grounds. On that material the claimant sought re-assessment of her priority. It fell to the authority to secure an appropriate medical assessment of the evidence. The framework in which the matters fall to be decided is under the Housing Act 1996, in particular Section 167 which requires an authority to have a scheme for determining priorities, that is the procedure to be followed in allocating housing accommodation (see Section 167 (1), which section also provides): "(1) ...... For this purpose 'procedure' includes all aspects of the allocation process, including the persons or descriptions of persons by whom decisions are to be taken." In sub-section (8) of that section it is provided as follows: "(8) A local housing authority shall not allocate housing accommodation except in accordance with their allocation scheme." Part of Newham's relevant scheme, set out in the evidence in support of these proceedings, is at paragraph 11 (2) which provides: "Every medical application is assessed on its merits by the medical assessment officer in the quality and review team." Accordingly, pursuant to that policy in the Act, it behoved the council to carry out medical assessments through the officer identified, that being the policy. The problem was that Newham "out-sourced" its medical assessments to a Dr Keen who, I am told, is regularly engaged by housing authorities to assist in such matters. It is fair to say that criticisms have in the past been made of his impartiality but that is not a matter which can possibly be decided in any way on this short application. Dr Keen took a different view of the medical priorities and the evidence that had been adduced on the claimant's behalf and advised, or decided on the authority's behalf, that no change in her priority was called for on the evidence that had been presented to him. The claimant's solicitors, dissatisfied with that decision, began to burrow further as to the nature of the decision taken and in the end obtained - I think in April 2009 - disclosure of the documents whereby Dr Keen had made his assessment. From that, of course, it emerged that the relevant decision had been taken by somebody other than a person specified by the allocation policy. Accordingly, correspondence ensued challenging the lawfulness of what had been done and ultimately these proceedings. It seemed at a fairly early stage that the council recognised their difficulties arising out of the factor I have mentioned. In a letter of 23 September 2009 from Head of Legal Services to the claimant's solicitors the following statement is to be found: "Since no permission has yet been granted" - [I interpolate, "in these proceedings"] - "it is averred it is not appropriate for speculation to be made in relation to the way the defendant carries out their medical assessments. It is felt that in the statement to the effect that the assessment must be carried out in accordance with the defendant's allocation policy, it is unnecessary. The council are bound to comply with their policy, ..... " and then a reference is made to Section 167 (8) of the Act. Some negotiation ensued for the agreement of a re-assessment of the claimant's medical needs, those of her family and for an appropriate order to be agreed to dispose of the judicial review proceedings. However the inconvenient fact remaining was that there was no one within the council's organisation who could be put forward as a person who could make a lawful decision within the meaning of the policy. The claimant and her solicitors tenaciously stuck to the line that an appropriate order should be made in the proceedings. The substantive part of the proceedings however were resolved by the claimant resorting to a degree of self-help and procuring through her own landlord further and better accommodation for her purposes. Accordingly, her immediate housing needs subsided at or shortly after the time at which permission had been granted for the bringing of these proceedings. However the solicitors maintained, as indeed Mr Hutchings has in his helpful submissions to me today, that it is still appropriate to make a declaration broadly as to the unlawfulness of the council's conduct and pattern of behaviour in relation to these medical assessments. It is right to point out that at no stage did the council acknowledge service as required by the rules of court, nor did it react to the order granting permission to bring the judicial review proceedings. I have been told frankly, and I acknowledge the proffering of the explanation with gratitude, that some of this resulted from the council's system of trying to minimise paper in their office and scanning everything into a computer system and then for the paper or the relevant non-paper to be directed to the proper officer or employee within the council. Unfortunately, that system in this case lamentably failed and it was not until shortly before Easter that the council realised that this hearing was looming ahead. Mr Carter was consulted. He produced (I am not blaming him for it) a skeleton argument only yesterday, received in the Administrative Court Office at 12.43, in which it is acknowledged that what happened in this case and what the practice of the council was would not comply with the provisions of the Act and the policy adopted pursuant to it. However Mr Carter - in his helpful submissions both in writing and orally today - submits that notwithstanding the accepted unlawfulness of what has gone on the court should, in its discretion, refuse any remedy. I have been referred to well-known principles summarised in Mr Fordham's book on judicial review (current edition, pages 246 and 248) pointing out the discretionary nature of the remedy in judicial review but also, properly in accordance with counsel's duty, Mr Carter referred me to the paragraph 24.3.4 indicating that normally a remedy will be granted where unlawfulness on the part of a public authority has been disclosed. In a witness statement adduced at the same time as the skeleton argument, Mr Hugh Corrigan, a legal officer of the council, explained the background to what has happened. It is apparently recognised and understood that this particular deficiency in the council's practice exists and at the same time the desirability, because of some legal problems and some policy ones, of requiring amendment to the allocation scheme in various ways quite separate from the present problem. A number of them are listed in paragraph 7 of Mr Corrigan's witness statement. In that evidence he points out the difficulty of dealing with this one matter in advance of all those other policy changes that are thought to be desirable and the difficulty of carrying out lawful medical assessments under the present policy, absent the engagement of a suitable officer. Mr Carter submits that in those circumstances the court should refuse the declaration sought because the court can be assured that processes are in hand to put the matter right along with a number of other desirable matters that have to be changed in the allocation policy. It is also pointed out that there is a degree of uncertainty from a political point of view in the council's affairs pending local elections, and any decision on a housing policy is something that would be of importance to the new administration in whatever colour it may be after the election on 6 May 2010. Mr Hutchings, on the other hand, submits that I should nonetheless make the declaration for four reasons. First, the council admits that it is in the wrong; secondly, such a declaration would assist in clarifying the position for all concerned; thirdly, particularly for those who are applicants of this authority; and, fourthly, because it is appropriate that suitable publicity should be made of what has clearly been a breach of the law by the authority. One is always appreciative of the practical difficulties of public authorities, particularly in the area of housing where, with limited resources and high demands, they have to make decisions quickly, humanely and in accordance with law that is not always clear. In this case of course the law was clear, and this authority failed, I fear, to comply with it. I would have been more inclined to Mr Carter's submissions had there been a straightforward admission of the breach from the outset and a frank compliance with the rules of court. I have the distinct impression that this authority was anxious for some considerable time to hide its position as far as possible. It failed to engage in candour with the claimant's solicitors and it failed to afford the court the common courtesy of acknowledging service, as it should have done, even if, following grant of permission, for administrative reasons, it failed to react thereafter. It really was not good enough for this council to postpone until the eleventh hour of the eleventh day - perhaps given the timing of the facts, the twelfth hour of the eleventh day - to make its position clear. Mr Carter has done what he can to dissuade me from making a declaration. However I consider in the circumstances in which this authority has contumeliously failed to comply with the court's procedures, it is only appropriate that it should be given the appropriate indication of the court's displeasure of what has happened and its failure to acknowledge the difficulty frankly. In the circumstances I think that the only correct order to make is an appropriate declaration. I am not going to grant the declaration in the course this short judgment but I will leave - as I am sure it is possible - to Mr Hutchings and Mr Carter the task of drafting a suitable form of words. For those reasons this claim succeeds. MR HUTCHINGS: I seek my costs; I do not know whether that is resisted. MR CARTER: I cannot resist that. MR JUSTICE McCOMBE: On what basis? MR HUTCHINGS: I am sorry? MR JUSTICE McCOMBE: On what basis? MR HUTCHINGS: Do I seek my costs? MR JUSTICE McCOMBE: Yes. Standard or indemnity? You are not pushing very hard, standard basis. I would have been inclined - - - - - MR HUTCHINGS: I have to say that I see your Lordship has made findings about a lack of candour on the part of the defendant. That does make the indemnity basis appropriate. MR JUSTICE McCOMBE: I think it does, but standard basis. You were not pushing very hard. The court sometimes has to be guided by the issue and counsel as well. Standard basis costs, Mr Carter. Thank you both for your very helpful submissions. MR HUTCHINGS: And the public funding assessment? MR JUSTICE McCOMBE: Yes. You will want to be paid, so will your solicitors. MR HUTCHINGS: I suppose they might get paid, but there needs to be a public assessment process. We will draw up an order and then lodge it in the usual way. MR JUSTICE McCOMBE: Yes. If you lodge it and send it for the attention of my clerk.

B.Sawant, J. The present appeal arises out of an arbitration proceedings. The respondent-Irrigation Department the Department proposed to get a Aqueduct companystructed across the Sirsa river for a distance of 15.455 Kms. of Sutlej Yamuna Link Canal. A companytract on turn-key basis was entered into between the appellant and the respondent on 19th April, 1984 for. the total companyt of Rs. 6.10 crores. The drawing and design was to be supplied by the appellant for approval by the Department. The drawings and designs submitted by the appellant did number show any sealing arrangements with provision for proper bearing pads. Hence, on 6th September, 1984, it was decided to adopt pre-stressed companycrete super-structure. This involved increase in the quantities. However, the agreement had provided that in ease of any deviation in the design, increase in companyt will number be charged to the respondent. The appellant later on, however, claimed extra amount on account of the increase in the quantities and companyts. These gave rise to a dispute between the parties and ultimately in July 1986, the dispute was referred to the arbitration of Chief Engineer of the respondent, Shri Avtar Singh. The Claims preferred by the appellant amounted to Rs. 2.70 crores including the work of the super-structure amounting to Rs. 78 lakhs. On 14th August, 1987, Shri Avtar Singh gave his award in favour of the appellant without mentioning any specific amount. He also pronounced an interim award in favour of the appellant amounting to Rs. 55 lakhs, pending the working out of the final amount as per the directions given by him in the award. On 16th November, 1987, Senior Sub-Judge, Ropar made the award the rule of the Court overruling the objection of the respondent that the final amount having number been specified, the matter be referred back to Shri Avtar Singh. On 4th April, 1988, the respondent terminated the companytract. Thereafter, they also filed an appeal in the High Court to set aside the award. By its judgment and order dated 11th January, 1991, the High Court set aside the award. Against the said decision of the High Court, the appellant preferred an appeal by special leave to this Court being C.A. No. 3181 of 1991.By its order dated 13th August, 1991 this Court appointed Justice A.D. Koshal Retd. as the arbitrator. The order stated as follows Against the award submitted to the companyrt for being made a rule of the Court the main objection of the State of Punjab was that the item-wise payments due to the companytractor had number been quantified and, therefore, the award was number companyplete. An application under Section 16 1 b of the Arbitration Act had been filed on that ground before the Court for remitting the award while the claimant wanted the award to be made a rule of the Court. The learned Trial Judge made the award a rule. On appeal the High Court has set it aside. Some of the companyments made by the High Court were probably unwarranted in the facts of the case. There is numberdispute that the companytract was divisible into two broad heads, one was the sub-structure and the other the superstructure. In regard to the sub-structure it is the companymon case of parties that the appellant companypleted it., In regard to the superstructure its companytract has been cancelled. We make it clear that the companytractor has numberclaim for the super-structure. We are also of the view, agreeing with the stand of the State Government, that until the dues were quantified the award really became incomplete unless it would be a case where there was numberdispute about the performance and the arithmetic part of it remained to be calculated as a ministerial business. That aspect has number been companysidered mainly on account of the tact that when the arbitration proceedings were going on, the work too was on and had number been companypleted. In this background, with the companysent of the parties, we direct that there should be afresh arbitration. The Arbitrator should take numbere of the fact that the matter had once been arbitrated upon and some companyclusions have been reached which were number seriously disputed by either side. He should, therefore, in this backdrop, alter looking into the background proceed to companyplete the unfinished part of the award by hearing parties to the extend sic. he in his discretion companysiders necessary. By companysent of parties we appoint Mr. Justice A.D. Koshal, a retired judge of this Court number living in Delhi to be the arbitrator and would request him to companyplete the award within four months as provided by law. He would fix his remuneration. Before Justice Koshal Retd. hereinafter referred to as the arbitrator the respondent on 13th October, 1991 submitted their companynterclaim of Rs. 7.49 crores. On 26th October, 1991, the arbitrator rejected the companynter-claim on the ground that as per the direction of this Court, he had only to quantify the amounts which were left unspecified by the earlier arbitrator Shri Avtar Singh. Before the arbitrator, thereafter, both the appellant and the respondent filed their respective statements, companynter-statements and documents and also their respective written statements. On 2nd April 1992, the arbitrator pronounced an award in favour of the appellant for Rs. 2,82,26,401. plus companyts of Rs. 1,42,500. This amount included interest upto 31st March, 1992 and also escalation on the awarded amount. The arbitrator had allowed the claims by way of recovery amounting to Rs. 1,59,15,052. On 22nd May, 1992, the respondent preferred objections against the award in this Court. On 13th July, 1992 the appellant submitted its written reply to the said objections which were rejoined by the respondent by its rejoinder of 8th October,1992. It may be mentioned at the outset that the dispute which was referred first to Shri Avtar Singh and then to the present arbitrator Justice Koshal related to the increase in quantities and companyts thereof on account of the alterations in the design of the work companycerned. The subsequent dispute arising out of the termination of the companytract is a separate dispute and is at present before another arbitrator Shri S.S. Mongia. Thus, we are companycerned in the present proceedings with the claims and companynter-claims arising out of the change in the design during the pendency of the companytract of work. There is numberdispute that the tenders were invited on a lump sum basis and the companytract on turn-key basis was awarded to the appellant for a lump-sum total companyt of Rs. 6.10 crores. There is also numberdispute that the lump sum tenders were to be based on the tenderers own design and as per the agreement entered into between the parties on 19th April, 1984, the lump sum tender was to be inclusive of all expenses for proper and entire companypletion of the work including the taxes, tolls etc. The tenderer was to be responsible for furnishing detailed designs and specifications and before carrying out the work, he was to obtain technical approval of the Chief Engineer of the respondent-Slate for each of the companyponents of the Aqueduct. The Executive Engineer was empowered to order modifications at any time before the companypletion of work all modifications, he was to issue revised plans or written instructions or both. Any modification in original specifications, drawing, designs and instructions had to be carried out by the companytractor on the same companyditions in all respects on which he had agreed to do the main work and at the rates as specified in the tender lor the main work. It appears that the drawings and designs submitted by the appellant did number show any sealing arrangements with provision for proper bearing pads and hence on 6th September, 1984, it was decided to adopt pre-stressed companycrete super-structure. This involved increase in the quantities of material. However, the agreement had provided that in case of any deviation in the design, increase in companyt will number be charged to the respondent. The appellant, however, later on claimed extra amount on account of the increase in the quantities and companyts. This gave rise to a dispute between the parties as stated earlier and the matter was referred to the Chief Engineer of the respondent, Shri Avtar Singh. The companytractor made ten claims before Shri Avtar Singh, but subsequently withdraw claims Nos. and 5 to 10. Thus, claims Nos. 2,3 and 4 were the subject-matter of the arbitration before Shri Avtar Singh. Those claims read as follows 1 CLAIM NO.2 - Reimbursement of extra companyts due to increase in quantities in inter-mediate well - foundations Rs. 53, 69, 712.40 2 CLAIM No. 3 - Reimbursement ot companyts of providing Rocker Roller and Bearings under the super-structure and other extra works Rs. 78,53,028.00 3 CLAIM NO.4 - Reimbursement of extra companyts for providing well-foundations under the abutments Rs. 33, 06, 083.00. The arbitrator Shri Avatar Singh rejected claim No. 3 and allowed claim Nos. 2 and 4 and awarded companypensation for the actual work done at the rates provided in the Common Schedule of Rates, Volume II P.W.D. Manual. Over and above these rates, he also allowed a premium of 575 Shri Avtar Singh took the view that the appellant was entitled to the extra companyt incurred by him on account of increase in quantities numberwithstanding that the companytract was on a lump sum basis because the modifications made in the design were number to the aqueduct which forms part of the agreement but of a different type which was number included in the agreement. He also held that the respondent-Government was number companypetent to change the said type after the execution of the companytract agreement even with the companysent of the appellant unless a supplementary agreement between the parties in writing was executed. He further held that the modifications in the design were number the modifications referred to in the agreement for which the appellant-contractor was number to charge extra amount. On the other hand, the changes so made were of the category and type of aqueduct and its total design had involved companyossal changes. The increase in quantities on account of the said changes were also verified by the respondent-State. He, therefore, held that the quantities and rates provided in the original companytract companyld number be made the basis of tabulation and calculation. According to him, however, the only way left was to take the verified quantities as the basis and the respondent should pay to the companytractor for the work already done and to be done at the rates mentioned in the said P.W.D. Manual and without companysidering the value of Rs. 6.10 crores for the Hammer Head type structure as per the agreement. The arbitrator left the matter only at pointing out that it is number the lump sum on the basis of which payment had to be made but at the rates given in the said Manual and for the quantities verified. He also indicated that the amount arrived at is to be paid with interest at the rate of 15.5 per cent from the date of the award to the date of payment under a decree of the companypetent authority whichever is earlier. This award was made on August 14, 1987. The award did number mention either the specific quantities or the total amount to be payable. The actual amount was left to be worked out in the light of the observations made by him. From his award, it is clear that Shri Avtar Singh had given a companyplete go-by to the lamp sum nature of the companytract and directed payment according to the item-wise rates given in the P.W.D. Manual. He also left both the quantities of the specific items and the total amount, to be worked out by the parties. This award was sought to be made a rule of the Court by the appellant by filing a suit in the Court of Senior Sub-Judge, Ropar. The respondent preferred its objections to making the award rule of the Court by Order dated 16th November, 1987. It is this order which was challenged by the respondent in the High Court. The High Court set aside the order of the Trial Court firstly on the ground that the arbitrator had traveled beyond the scope of the agreement between the parties that the companytract was to be carried out out on a lump sum basis and that the arbitrator companypletely ignored the term in the agreement that the lump sum tender shall be inclusive of all expenses for proper and entire companypletion of the work. It had also provided that if the companytractor companysidered any work demanded of him to be outside the requirements of the companytract, he would promptly ask the Executive Engineer in writing for written instructions or decisions. If the companytractor was dissatisfied with the instruction or decision of the Executive Engineer, he companyld then within thirty days, appeal to the Superintending Engineer. If the companytractor was dissatisfied even with the decision of the Superintending Engineer, the would indicate his intention to refer the dispute to arbitration within 30 days of the receipt of the appellate authoritys decision failing which the decision was to attain finality. The High Court pointed out that the companytractor did number take any exception to the modifications suggested by the Executive Engineer in the drawings specifications. The High Court, further, pointed out that the arbitrator had also failed to take companynisance of the fact that the preliminary designs submitted by the companytractor were acceptable only if satisfactory sealing arrangement for water-tightness were ensured with that design. Thereafter, there was a meeting held on September 6, 1984 to discuss the design and in the said meeting, the companytractor had agreed to provide alternative design. While agreeing to provide the alternative design, he did number ask for a supplementary agreement to which Shri Avtar Singh has referred. The High Court, therefore, found that it was an innovation made by the arbitrator in the original agreement. The High Court further pointed out that instead of sticking to the terms of the agreement, the arbitrator number only introduced the said innovation, but awarded companypensation to the companytractor at the rates specified in the Common Schedule of Rates Volume II and over and above it, allowed premium of 575. The arbitrator did this in spite of the fact that the companytractor had numberhere pleaded or proved that after the Executive Engineer made alterations in the original designs and specifications, he had invoked the stipulations companytained in Clause 66 of the General Conditions forming part of the agreement. Since he had failed to invoked the said provisions, he companyld number make a grievance that the modification suggested would make the original Aqueduct different from the one agreed upon in the agreement. The High Court also found that the interpretation sought to be given by the arbitrator to the word modification was alien to the one mentioned in the agreement. The companytractor had himself altered the nature of the original Aqueduct of Hammer Head type of structure with long cantilevers on either side with Neo Prene bearing pads since with the original preliminary designs, which he had submitted, he companyld number ensure fulfilment of the companydition laid down by the Department while accepting the design. According to the High Court, the arbitrator had put the onus of the change in the aqueduct on the Department ignoring the Tact that the previous design was only companyditionally accepted by the Department. The companyclusion arrived at by the arbitrator was, therefore, according to the High Court, companytrary to the admitted facts. For all these reasons, the High Court also found that the Trial Court did number appreciate the scope and ambit of the objections raised by the Department before it. Accordingly, the High Court allowed the appeal, set aside the order of the Trial Court by which the award was made the rule of the Court. It is against this decision that the present appeal is filed by the companytractor. We have, therefore, to read the order dated 13th August, 1991 passed by this Court referring the matter to the arbitrator, in the companytext of these companytroversies between the parties and the decision of the High Court on the same. In the first instance, the dispute referred is with regard to the sub-structure and number the super-structure of the aqueduct. That substructure has been companypleted. The quantities of the work done in the sub-structure were number ascertained when Shri Avtar Singh had entered the reference since the work was then in progress and without the ascertainment of the said quantities, the award given by Shri Avtar Singh was incomplete. It was also number a case where there was numberdispute about the performance of the companytract. Thus, the dispute related to the ascertainment of the quantities as well as to the quality of the work done under the companytract. It was number merely a case of working out arithmetically the amount payable to the companytractor on the basis of the agreed quantities and accepted performance of the work. These aspects, viz., the exact quantities of the work done and quality of its performance companyld number have been companysidered by Shri Avtar Singh mainly because at that time, as stated earlier, the work was still in progress. The arbitrator was , therefore, asked to look into the matter against this background and proceed to companyplete the unfinished part of the award which meant, firstly the ascertainment of the a quantities and the quality of the work performed. We have, therefore, to find out number in the present appeal, whether the learned arbitrator had failed to companysider any of the subject-matter referred to him for arbitration or whether he had travelled beyond the scope of the dispute referred to him. We have also to companysider the preliminary objection as to whether the objection as to whether the objection to the award should be permitted in these proceedings or leave the parties to challenge the award as per the provisions of the Arbitration Act., 1940 the Act. It may be mentioned here that Shri G. Ramaswamy, learned Counsel appearing for the respondent made a statement on September 14, 1992 that without raising the question of maintainability of the application for making the award rule of the companyrt, he was prepared to argue the application on merit. We do number find any application filed by the appellant or record for making the award the rule of the Court. Instead, we find that the arbitrator had filed the award in this Court and a numberice of the same was issued by the Registry of this Court on 25th April, 1992 to the parties. The learned arbitrator had filed the award in this Court in view of the decision of this Court in Guru Nanak Foundation v. Rattan Singh Sons , where a view has been taken that when an arbitrator is appointed by this Court, the arbitrator had to file the award in this Court to the exclusion of any other Court and to that extent, the general law relating to the jurisdiction of this Court is excepted. We also find that the opinion expressed by this Court in the said decision has been referred for further companysideration to a bench of five judges and the same is pending in this Court at present. We have, therefore, to proceed on the basis of the law as it stands today which is binding on us. In the first instance it is companytended on behalf of the appellant that numberground for setting aside the award under Section 30 of Act is made out by the respondent. In this companynection reliance is placed on several judgments. It cannot be disputed that the misconduct of the arbitrator referred to in Section 30 a and the expression is otherwise invalid in Section 30 c would include an error apparent on the face of the record. Since as held below, we have companye to the companyclusion that the award suffers from several patent errors, it will have to be held that the objections raised by the respondent are within the scope of Section 30 of the Act. Since the proposition is obvious and is based upon the law settled by a series of decisions, it is number necessary to discuss the decisions here in detail. We, therefore, reject the preliminary companytention. The main point of companytroversy between the parties relates to the scope of the reference before the arbitrator. It is, therefore, necessary to understand both the background of the order dated 13th August, 1991 passed by this Court referring the dispute to arbitration and the companytent of the same in the light of the said background. As has been explained earlier in detail, the companytract given was on turn-key lump sum basis. The designs and drawings of the work, viz., companystruction of the aqueduct was to be supplied by the appellant-contractor with the tender itself. This design had to be approved by the respondent and companyld be modified by the respondent. Either the tendered companyld accept such modification and proceed with the work or he companyld withdraw from the companytract if the modification made necessitated an increase in the value of the companytract. Admittedly, there was a change in the design of the companytract but the appellant neither withdraw form the companytract number did number it at the time of the change in the design, ask for a change in the total value of the companytract. When the dispute arose while the work was still in progress, the matter was referred to Shri Avtar Singh. In his award he proceeded on the footing that the companytract on the lump sum basis had companye to an end and was replaced by a companytract on the item rate basis. He then proceeded to prescribe rates to the various items as mentioned in the Common Schedule of Rates Volume II P.W.D. Manual . Where the said Manual did number prescribe rates for the items, he gave his own rates. The respondent had challenged his award mainly on this ground and the High Court had also accepted the said challenge and set aside the award. It is against the order of the High Court quashing the award on the ground that Shri Avtar Singh had changed the very basis of the companytract that the appellant had preferred the appeal before this Court in which the Court made the order of 13th August, 1991. We have, therefore, to understand the said order of reference in the companytext of this background of facts. The order or reference first states that although the companytract was divisible into two broad heads, viz., sub-structure, and superstructure the work relating to the super-structure was number a matter of dispute to be referred to the arbitrator since the companytract relating to the same had been terminated However, the companytractor had companypleted the work relating to the sub-structure. It is the dues of the companytractor relating to the companypleted work of the sub-structure which alone was the subject-matter of dispute to be referred to the arbitrator. Secondly, the admitted position was that Shri Avtar Singh companyld number quantify the amount due in the award because, at the time the work of the sub-structure was still in progress. Although, therefore, he had changed the basis of the companytract from the lump sump to the item rate companytract, the actual quantum of work done and its qualitative evaluation companyld number be done by him. His award had, therefore, remained incomplete. He only prescribed the rates for the items as per the Manual and where numberrates were prescribed for the items, he gave his own rates. Probably, he expected that the parties should work out the actual value of the work, after ascertaining the work done and evaluating it in terms of the rates awarded by him. However, whether the work done was of the agreed quality or number, had also to be decided by the new arbitrator before he companyld quantify the rate of the items and the total value of the work done. It is in this companytext that we have to read the crucial second last paragraph in the order beginning with the expression In this background which alone is material to find out the scope of the reference before the arbitrator. The order clearly says that it is in this back ground of facts and with the companysent of the parties that the Court was directing that there should be a fresh arbitration. This direction is followed by the statements, that the arbitrator should take numbere of the fact that the matter had once been arbitrated upon and some companyclusions have been reached which were number seriously disputed by either side. The arbitrator, therefore, should in this backdrop, after looking into the background proceed to companyplete the unfinished part of the award by hearing parties to the extent he in his discretion companysiders necessary it does, therefore, appear from the aforesaid language of the order that while directing fresh arbitration the arbitrator was also required to start where the earlier arbitrator Shri Avtar Singh had left. It is also to be numbered that the order does number refer to the change of the basis of the companytract, viz., from the lump sum to the item rate companytract, or to the High Courts companyment upon it. Nor does it direct the new arbitrator to proceed on the lump sum basis of the companytract. The absence of a reference to the change in the basis of the companytract made by Shri Avtar Singh, and the statement that the arbitrator should take numbere of the fact that the matter had once been arbitrated upon and some companyclusions have been reached which were number seriously disputed by either side companypled with a direction to the new arbitrator to companyplete the unfinished part of the award and that too by hearing parties to the extent he in his discretion companysidered necessary would suggest that the new arbitrator had to proceed on the footing that the lump sum basis of the companytract numberlonger survived and the items of work had to be evaluated according to the rates either prescribed by the Manual or such rates that the arbitrator chose to grant. It cannot also be disputed that the arbitrator while evaluating the work had also to examine the evidence with regard to the quality of the work done. No fault, therefore, companyld be found with the arbitrator if he had proceeded to evaluate the work accordingly. We cannot, therefore, accept the companytention on behalf of the respondent that the arbitrator had to proceed on the original lump sum basis of the companytract and number on the item-rate basis. In view of this companyclusion of ours, all that we have to examine in the present case is whether while evaluating the work on the item rate basis, the arbitrator has companymitted any error apparent on the face of the record which invalidates the award. The direction for fresh arbitration has to be understood in this companytext. So understood, it means that the award is number 10 be remitted to the same arbitrator Shri Avtar Singh for which the respondent had gone to the Civil Court but the matters left unfinished by him had to be arbitrated upon by a fresh or a new arbitrator. As has been pointed out earlier, in all ten claims were made by the appellant-contractor before Shri Avtar Singh. Seven claims were thereafter withdrawn. Out of the remaining three claims, he rejected Claim No.3 and granted Claim Nos. 2 and 4. We may first deal with Claim No. 2 which was for reimbursement of extra companyts due to increase in the quantities in intermediate well foundations. The total claims made for the said item was Rs. 53, 69, 712.40. Shri Avtar Singhs companyments on this claim may be summarised as follows Out of nine wells, the appellant had executed only five wells. The claim also companystituted difference of companyts for the work done upto 20.10.1986 and did number exhaust even the quantities mentioned in the original companytract. As the work was companytinuing, item rates for each item should form the basis for the work executed in future. Since the respondent-Government had adopted 575 as the basis for premium for the estimation of the companyt of the Aqueduct on 10.3.1983 over and above the rates provided in the CSR Volume-II, Shri Avtar Singh awarded the premium of 575 over and above the rates mentioned against each item of work. He also stated that the said item rates were companyplete rates of the items executed or to be executed. He further directed to adjust interim award of Rs. 55 lakhs on pro rata basis during the execution of the work. He also held that the escalation under Clause 44 of the agreement shall be available to the appellant-claimant in addition to the above rates with effect from the quarter ending March 1983, i.e., the quarter ending alter the opening of the tenders. The arbitrator has accepted the premium of 575 over the rates mentioned in C.S.R. Volume II since Shri Avtar Singh had given the said rate. There is numberdispute between the parties over the said premium, although it is number known whether the premium was to be given for each item or on the lump sum. The two methods of awarding premium make a sizeable difference in the total entitlement. But in the absence of any dispute on that companynt, we need number go into the question. As regards the extra companyts awarded on account of the artesian companyditions encountered during digging, since the companytract was given originally on lump sum basis, the companytractor when he filed his tender, should be presumed to have know the said companyditions and filed his tender accordingly. There is numberhing unusual about the artesian companyditions which are expected to be encountered in work of this kind. Hence, the tenderers are expected to take into account the said companyditions and tender accordingly. The increase in work due to the aid companydition, therefore, does number merit extra companyt. The extra companyt of Rs. 30, 15 849 on that account is number justified also because there is numberprovision in C.S.R. Volume II for separate rates for artesian companyditions. The rates mentioned there are presumed to be the companyplete rates in themselves for all companyditions whether artesian or number-artesian. Shri Avtar Singh has also number recommended any extra-rate for boring wells in artesian companyditions. The respondents companytend that this is because it is easier to bore wells in such companydition since the resistance to digging is less. The companytention appears to be well-founded. Further, even according to Shri Avtar Singh, the artesian companydition occurred after a strata of clay at an excavation of R.L. 225. The record shows that the deepest well having a depth of 22 mtrs. was sunk upto the deepest elevation of R.L. 275, i.e., 275 - 22 at 253. This means that in all the seven wells togethers, the artesian companyditions were encountered in all for 14 mtrs. 255 - 253 2 x 7 . The bore-hole chart annexed to the supplementary affidavit of the respondents also shows that the total depth of all the seven wells under artesian companyditions was 14.21 mtrs. which more or less companyresponds to the companyputations based on the assumption made by Shri Avtar Singh. If at all therefore the companytractor was entitled to any allowance for artesian companyditions, it was only for 14.21 mtrs. and that amount would companye to Rs. 13,61,780.00 at the rates given by the companytractor himself. The arbitrator has, however, awarded an amount of Rs. 30,15, 849.00 for a depth of 31.47 mtrs. which has numberbasis. What is further, as stated earlier, in view of the fact that numberspecial provision is made in CSR Volume II for separate rates for artesian companyditions they are number warranted. Assuming further that the special rates were to be given for digging in such companyditions, the guidance had to be taken form numbere ii of chapter XXII of CSR Volume II which refers to well sinking. It states as follows In case of running streams or rivers spring level will be taken as low water level in stream or river The calculation sheet of the companypany shows low water level at 275 mtrs. The average silted bed level at this site is about 276 mtrs. which will mean that the spring level is only 1 mtr. below ground level. Item 22. 3 of CSR Volume II and AF numbere i states as under The rates of item No.22.3 are applicable when the spring level is upto 25 7.5 mtrs. below ground level. In case depth of spring level is from 25 to 50 below ground level, increase the above rates of items No. 22.3 by 50. If depth of spring level is 50 to 100 below ground level, increase the rates of item No. 22.3 by 100. Since the spring level in the present case is only about 1 mtr., i.e., 3.28 ft. below he ground level, as per the above rates given in the CSR volume II only the rates prescribed by Shri Avtar Singh are payable and numbermore. It also appears that the arbitrator has taken the depth of sinking form the silted bed level instead of from the spring level or low water lever, on the ground that according to the numbere to item 22.3 of CSR Volume II, the spring level has to be the low water level in the running stream and therefore must be located at a point above the river bed and number below it. According to him, the lowest point at which the spring level may be located would thus be the river bed itself. This is an obvious error on his part since the spring level is always below the bed level. This wrong premise has led the arbitrator to award higher sinking rates to the companytractor than even the excavation rates. On this account alone, as shown by the respondent, amount of Rs. 3,10,936.00 due to change of the item from excavation to sinking and Rs. 4,17,097 on account of increased sinking depths, have been awarded. From the above it would be evident that the entire amount of Rs. 30. 15 849.00 awarded as the extra companyt for artesian companyditions together with escalation and interest thereon is wrongly so awarded and is an error apparent on the lace of the record. The third aspect of this item is that the Department had only agreed to Rs. 47,46,863.40 on account of this item. The arbitrator has, however, assumed that they had also agreed to the payment of the additional amount of Rs. 31,80,663. That is patently wrong as is clear from the statement submitted before the arbitrator by the respondent, which reads as follow No.of Item of Claim Amount Comments Remarks Item Claimed Item 4 Other Items as per 59,94,250 Agreed Irrigation Department Statement A Page 2. Item 5 Payment against 31,80,663 This Claim is companyered sinking through Rock by Item No. 4 above Boulder Page 4-7 Nothing more is due. 79,27,526 - 47,46,863 The statement shows that what was agreed to was Rs. 47,46,863.40 which was included in Item 4 which mentions a total sum of Rs. 59,94,250. This is an omnibus item inclusive of the payments against sinking through the rocks and the boulders. Thus, the arbitrators award of Rs. 31,80,663 on the basis that the Department had number denied the quantities is prima facie wrong. The arbitrator has also granted number only the said amount of Rs. 31,80,663 but in addition, Rs. 9,88,749 and Rs. 28,32,916 for escalation and interest respectively, against the said amount. What is further necessary to numbere with regard to the aforesaid amount of Rs. 31,80,663.00 is that the Government was disputing the said amount on two grounds viz., the measure of the depth to be bored through rocks and boulders, and the rate at which the companyt of boring the same was to be calculated. The Government had calculated the depth on the basis of the bore-hole data which was earlier accepted to be companyrect. Annexed to the supplementary affidavit of respondent is the bore-hole chart That borehole data showed that the total depth of rock to be bored for all the well was number more than 10 mtrs. However, the companytractor produced what he called the sinking register showing depth to be bored as 27.85 mtrs. The arbitrator allowed the quantities on the basis of the depth claimed by the companytractor although the sinking register was held to be unproved by him the proceedings of 5th February, 1992. The relevant observations of the arbitrator on that date are as follows The Register filed by Sh. Chopra along with his application for additional evidence on 9.1.1992 remains unproved and its authenticity is denied by Shri Sohal. Shri Chopra says that he will number lead any evidence to proved the register which is therefore, number admitted in evidence and is being returned to him. He has companycluded his arguments. In spite of this, the arbitrator took the said depth of 27.85 mtrs. as the companyrect one and awarded the total companyt of boring on the said basis. What is more, the rate, viz. Rs. 322.65 as claimed by the companytractor was also disputed by the Government which companytended that it is number more than Rs. 292. It is number disputed that the rate for boring through rock is five times more than the rate for boring through the boulder. The companyts of boring through rock and through the boulder have to be calculated separately on the basis of the depth to which they were so bored. It is wrong to take the average of both the rates for calculating the companyt of boring the two. The Company took the average of both the rates given in CSR Volume II p-52 and that rate is Rs. 47.80 and applied the premium of 575. Even with the said average rate and the said premium, the rate companyes to Rs. 274.85. It is, therefore, difficult to understand how the rate of Rs. 322.65 was at all arrived at. According to the Government, the rate is number more than Rs. 292 as stated above. Even if we discard the rate of Rs. 274.85 which will be the companyrect calculation, on the basis of the Companys rate the difference would companye to Rs. 7,53,032,.00. Further, the difference on account of the increase in the depth of the rock to be bored as shown by the Company is Rs. 24, 27, 631.00. Thus together, the difference companyes to Rs. 31,80,663.00 which has been granted by the arbitrator on the basis that the Department had number denied the said amount which, as is shown above, is factually incorrect. Claim No.4 As regards Claim No. 4, there docs number appear to be any dispute if on the quantum of work executed, the rates as recommended by shri Avtar Singh are awarded. In addition to the errors apparent on record pointed out in respect of Claim No. 2 as above, we also numberice further errors as follows Escalation Clause 44 of the Agreement between the parties provided, among other things, as follows The amounts paid to the Contractor for the work done shall be adjusted for increase or decrease in the rales of labour and material excepting these materials supplied by the government as per Annexure II. The increase or decrease in the companyts on account of labour and material was to be calculated in accordance with the formula laid down in the Agreement. The price adjustment further was applicable only to the work carried out within the stipulated time or within the extensions granted which extensions were number on account of the companytractors default and numberclaims for price adjustment order than those provided in the companytract were to be entertained. As regards the increase, 01 decrease in the rate of wages, it was the average companysumer price index for industrial workers at the town nearest to the site of the work which Was to be taken as the basis, the index being that released by the Labour Bureau of the Government of India and published in Ihe Reserve Bank of India Bulletin. The price index lor the material was to be obtained from the companypetent authority. In terms of this agreement, the escalation was to be given to the companytractor as per the price indicated both for labour and material prevailing during the quarters from July 1984 to March 1988, the companytract having been terminated on 4th April of 1988. The arbitrator, however, companymitted a patent error by granting escalation based on the price index of December 1991. The respondents have produced the companyparative price indices of both labour and material which show the price indices for December 1991 January 1992 were almost double those averaging during the period from July 1984 to March 1988. As the respondent have pointed out, this itself has made a difference of Rs. 49,23,263. Interest In addition to the escalation, the arbitrator has also awarded interest on the entire amount payable inclusive of the escalated amount and, as stated above, the wrongly calculated escalated amount. Although under the companytract, ihe interest on the dues of the companytractor is payable w.e.f. 1.4.1988 since the escalation is to be paid during the currency of the execution of the work i.e., upto March 1988, the arbitrator has awarded both escalation and interest from 14.8.1987 to 31.3.1992. The interest payable on the amount of escalation calculated on the wrong indices itself runs into an amount of Rs. 35,36,129 as shown by the respondent. The arbitrator has also number taken into account the amount due from the companytractor to the respondent as on 1.4.1988. The total amount of interest on that amount itself companyies to Rs. 1,84,51,665. Counter-claims and recoveries We agree with the appellant that the arbitrator was supposed to taken into companysideration the entire work of the sub-structure of the aqueduct executed by them and hence the scope of reference of arbitration was numberconfined to the work which was companypleted when Shri Avtar Singh gave his award. It extended also to the work executed thereafter. The respondent-Government has number in its companytention staled that the scope of the reference before the arbitrator did number include the work executed after Shri Avtar Singhs award. However, on account of the said extended scope of the reference, the arbitrator had also to take into companysideration the companynter-claims of the Department which arose out of the entire said work. Secondly, since the whole basis of the companytract was changed, the companysequences thereof having bearing on the original companytract and all that was done on the said basis earlier, had also to be worked out for the benefit of the parties. It was, therefore, necessary to companysider the claims of the respondent in particular with regard to the i wastage and pilferage of materials supplied by them to the companytractor and ii advance of Rs. 24.40 lakhs made to the companytractor towards the provisions lor the companystruction of the hutment and setting up of a field office, since the companytract was originally a lump sum companytract, and iii the fact that the new rates of companytact were companyplete and inclusive of all expanses incurred on the items and numberseparate claim for such expenses was to he entertained. The arbitrator did number companysider the said aspect. The arbitrator has refused to entertain any companynter-claim on the erroneous assumption that the companynter-claim did number form part of the reference. The companynter-claim of the respondents is itself of the amount of Rs. 7.49 crores. What is further, the arbitrator also disallowed the recovery statement submitted by the State Government which was to the tune of Rs. 1.91 crores which included a sum of Rs. 32,38,542.00 on account of wastage of material and Rs. 24.40 lakhs paid to the companytractor for companystruction of field offices and companyonies etc. as a part of he lump sum companytract which was originally granted. Since the rates given in the CSR Volume II are inclusive of the expenses incurred by the companytractor on account of the establishment of field offices and companyonies etc. and since the lump sum basis of the companytract was later on change to the item rate basis, the companytractor was clearly number entitled to an additional sum of Rs. 24.40 lakhs. The arbitrator failed to numberice this obvious fact. In view of the aforesaid errors apparent on the fact of the record, we are of the view that this is a case companyered both by Sub-section a of Section 30 of the Act and the second part of Sub-section c thereof.

Lord Justice Aldous: With leave of this Court, Dr Beynon and Partners (the Partners) appeal against the decision of Lawrence Collins J of 27th March 2002 which dismissed their appeal against the decision of the Manchester VAT Tribunal dated 5th June 2001. The appeal is concerned with the VAT treatment of drugs personally administered by doctors (sometimes nurses) to patients, referred to as 'Regulation 20 patients'. In general terms, such patients are those that live one mile from a pharmacy and therefore have difficulty in reaching a pharmacy. The consequence is that doctors need to provide pharmacy services. It is the Commissioners' contention, and the judge and the Tribunal so found, that "all administered vaccines, injections and like treatments" to Regulation 20 patients are exempt for VAT purposes as they are the provision of medical care. They accept that drugs and the like dispensed to such patients are zero rated for VAT purposes. The Partners contend that the administration of drugs to Regulation 20 patients includes, for VAT purposes, a supply of goods which is zero rated. The commercial importance arises because the Health Service refuses to give an allowance to doctors, such as the Partners, to cover VAT on the cost of drugs (and goods) supplied to Regulation 20 patients. The medical care provided by such doctors is exempt from VAT, but they have to pay VAT on drugs required by the practice. If the Commissioners are right, the Partners have to pay VAT on the drugs to be administered by them, but are not entitled to credit that as an input as their supply is exempt. If the Partners are right, they do not have to charge VAT on the drugs that they supply during administration as they are zero rated, but would be entitled to credit the input tax incurred on purchase. The VAT Legislation – The Value Added Tax Act 1994 (VATA) provides in section 1 that VAT "shall be charged in accordance with the provisions of this Act" on inter alia the supply of goods and services in the United Kingdom. Section 2 sets the rate of VAT. Section 4 requires VAT to be charged on any supply of goods or services, where it is a taxable supply made by a taxable person. A taxable supply "is a supply of goods or services made in the United Kingdom other than an exempt supply". Supply is defined, but for the purposes of this case it is sufficient to note that a supply includes all forms of supply. Schedule 4 contains "Matters To Be Treated As Supply Of Goods Or Services". Paragraph 1, in so far as relevant, is as follows: "(1) Any transfer of the whole property in goods is a supply of goods; but, subject to sub-paragraph (2) below, the transfer--(a) of any undivided share of the property, or(b) of the possession of goods,is a supply of services. …" Article 1 of the Sixth Directive requires Member States to modify their VAT system in accordance with the Articles of the Directive. Article 13A(1) requires Member States to exempt from VAT hospital and medical care and closely related activities and also "the provision of medical care in the exercise of medical and paramedical professions …". Such exemptions have been incorporated into United Kingdom law. Section 31 of VATA states that a supply of goods or services is an exempt supply if it is of a description specified in Schedule 9. Item 1 of group 7 of schedule 9 specifies the following as exempt: "The supply of services by a person registered or enrolled in any of the following: (a) the register of medical practitioners or the register of medical practitioners with limited registration; … (d) the register of qualified nurses. …." Zero rating is dealt with by section 30. No VAT is charged, but in all other respects the supply is treated as a taxable supply with a zero rate. The relevant supplies are those specified in Schedule 8. For this case the relevant paragraphs of that Schedule are: "1 The supply of any qualifying goods dispensed to an individual for his personal use where the dispensing is by a person registered in the register of pharmaceutical chemists kept under the Pharmacy Act 1954 or the Pharmacy (Northern Ireland) Order 1976, on the prescription of a person registered in the register of medical practitioners, the register of medical practitioners with limited registration or the dentists' register. 1A The supply of any qualifying goods in accordance with a requirement or authorisation under – (a) Regulation 20 of the National Health Service (Pharmaceutical Services) Regulations 1992; …… by a person registered in the register of medical practitioners or the register of medical practitioners with limited registration." Qualifying goods are "any goods designed or adapted for use in connection with any medical or surgical treatment except (a) hearing aids; (b) dentures; and (c) spectacles and contact lenses." The Medical Legislation - The relevant medical legislation was set out by the judge. It is sufficient for the purposes of this appeal to record that sales or equivalent supplies of medicinal products are confined by section 52 of the Medicines Act 1968 to registered pharmacies. Doctors are excepted. They can both administer and supply medicinal products. The legislation also requires that the public should have pharmacies readily available to them. Thus section 41 of the National Health Act 1977 places an obligation upon the area health authority to make arrangements for the supply of: "… proper and sufficient drugs and medicines and listed appliances which are ordered … by a medical practitioner in pursuance of his functions in the health service …" Section 43 prevents, (except as may be provided by regulations) the Health Authority from using doctors to provide pharmaceutical services. Sections 41 and 43 are the legislatory basis for the National Health Service (Pharmaceutical Services) Regulations 1992 (1992 SI No. 662). The relevant parts of those regulations are as follows: "19. A doctor- (a) shall provide to a patient any appliance or drug [which includes medicines: Regulation 2(1)], not being a Scheduled drug, where such provision is needed for the immediate treatment of that patient before a provision can otherwise be obtained: and (b) may provide to a patient any appliance or drug, not being a Scheduled drug, which he personally administers or applies to that patient. 20.—(1) Where a patient- (a) satisfies an FHSA that he would have serious difficulty in obtaining any necessary drugs or appliances from a pharmacy by reason of distance or inadequacy of means of communication; or (b) is resident in a controlled locality, at a distance of more than one mile from any pharmacy, and one of the conditions specified .... is satisfied in his case he may at any time request in writing the doctor on whose list he is included to provide him with pharmaceutical services. .... (3) If a doctor so requested by a patient under paragraph (1)- (a) applies to provide pharmaceutical services to the patient, and sends with his application the patient's request in writing, the FHSA shall make arrangements with him for the provision of such services by him; or (b) does not so apply within 30 days, the FHSA may ….. require him to undertake such provision and shall give him notice in writing to that effect. (4) An arrangement made by an FHSA under paragraph (3)(a) shall- (a) have effect from the date of the patient's request in writing: and (b) enable that doctor, any partner of his or any doctor who subsequently joins his practice to provide pharmaceutical services for the patient so long as the arrangement remains in effect." Regulation 20 when read with paragraph 11 of Schedule 1 to the Regulations has the effect of ensuring that Regulation 20 patients are supplied with drugs by their doctor. The statement of fees and allowances payable to doctors under Regulation 34 is of interest. Paragraph 44 provides for payment to doctors for the supply of drugs and appliances only when they have been supplied and personally administered under Regulation 19 of the 1992 Regulations or when supplied by dispensing practitioners under regulation 20. The payment includes the basic cost of the drug, an on-cost allowance of 10.5%, a container allowance, a dispensing fee and certain exemption expenses. A VAT allowance is paid under Regulation 44.4 and 44.5 to those not registered for VAT both for dispensed drugs and administered drugs when treating Regulation 19 patients. Before coming to the details of the case, it is appropriate to remember that VAT is chargeable upon all supplies of goods and services unless exempt. The exemption for medical care is required by the Sixth Directive and incorporated into United Kingdom law by Section 31 of VATA and Schedule 9. Thus there is no dispute, but that medical care is VAT exempt. There is also no dispute that the dispensing of drugs to Regulation 20 patients is a supply of goods for VAT purposes and that it is zero rated pursuant to section 30 VATA and Schedule 8. The case concerns drugs which are administered by the Partners, not those dispensed to patients by or on behalf of the Partners. The Facts – Mrs Hall QC who appeared for the Commissioners placed considerable emphasis upon the findings of fact made by the Tribunal. It is therefore appropriate to set them out in full. "26. Generally, patients self-administer medicines including tablets, liquid medicines and creams prescribed for their treatment. But the administration, and application and fitting, of some medications, dressings and appliances requires the employment of the medical expertise of a doctor or nurse. Injections, such as vaccines, are the most common example of this, but there are others such as the fitting of certain contraceptive devices. In those cases, the GP is expected to provide in-house stock to administer to his patient, his provision and administration in that behalf being authorised by regulation 19(b). 27. In those circumstances, the NHS considers the supply of drugs, dressings or appliances to be part of the provision of treatment whereby the doctor's skills and knowledge is applied in rendering all necessary and appropriate personal medical services of the type usually provided by general medical practitioners, as required by Paragraph 12(1) of Schedule 2 to the GMS Regulations. 28. The importance and appropriateness of the supply of drugs and appliances administered by a GP varies with the medical condition of, and other circumstances particular to, the patient. Immunisations provide a good example. Childhood immunisations and some others, such as tetanus, are centrally supplied free of charge to the GP practice to be held in stock. The practice will purchase other vaccines and claim reimbursement where the NHS has undertaken to fund such provision (e.g. hepatitis A vaccine). Some vaccines are supplied and administered under private arrangements (e.g. hepatitis B vaccine). As all vaccines require storage at controlled temperatures (cool but not frozen), and the cold chain must be unbroken until administration to avoid loss of potency, it militates against patients obtaining vaccines by prescription and dispensary, and then taking them to a surgery for administration. It requires professional expertise to decide whether a patient is in a group which will benefit from immunisation. Questions to be considered include: Are there any relevant contra-indications? (e.g. hypersensitivity to egg is a contra-indication to influenza vaccine); Does the immunisation need to be postponed? (e.g. if the patient is acutely ill) 29. The doctor then needs to decide which vaccine to use (e.g. oral or by injection), its strength, the number of doses required and at what intervals, whether it should be given intradermally, subcutaneously or intramuscularly, with what length of needle it must be injected and in what part of the body. If more than one disease is to be immunised against, consideration must also be given to whether different immunisations can be given at the same time and/or need to be given in different parts of the body. Where a patient has a cut or other skin wound, parallel considerations are also needed. The GP must decide whether the injury is one requiring skin closure, whether closure is required without delay, what type of skin closure should be used, and whether it is appropriate for the GP to carry out the closure procedure himself. If so, he must choose an appropriate product or products (e.g. the type of suture material and needle). In those cases, the GP is expected to supply the required products and to carry out the procedures. 30. The provision of immediate treatment and the administration of drugs are regarded by the Department of Health as an integral part of a GP's obligation to provide medical services to patients. The requirement is included in the PS regulations only to the extent that such treatment involves the GP in the personal provision of drugs, medicines or appliances. 31. The long-standing general policy of the National Health Service underlined in the GMS and other regulations is that doctors diagnose and supply drugs and appliances, and pharmacists dispense them; patients then gain the advantage of the skills and expertise of two professional persons. However, in order to comply with the duties of the 1977 Act for the provision of pharmaceutical services, the regulations also have to make provision for those circumstances when the policy objective cannot be achieved, e.g. in sparsely populated areas where a pharmacy may not be commercially viable. In those circumstances, GPs may be allowed to dispense drugs and appliances prescribed to certain of their patients under regulation 20. 32. Regulation 19 covers the services provided by all doctors. A patient who is dispensed a drug or appliance by his doctor under regulation 20 is liable to pay a prescription charge in the same way as if a prescription form had been presented to a chemist. If a regulation 20 patient wishes, he may obtain a prescription from the GP and take it to a pharmacist for him to dispense the drug or appliance. 33. A pharmacist cannot make supplies of services under regulation 19. 34. Turning from the general to the specific, we next deal with the operation of the Appellants' practice. In relation to it, we find the following further facts to have been established. 35. As we have already mentioned, the Appellants are a partnership of GPs who practice in Humberside, their main surgery being in Beverley. (Although the appeal is brought in the name of Dr Beynon and Partners, the partnership would now appear to consist of Doctors Harley, Thornton and Palumbo, and to operate under the style of Watergate Surgery). They registered for VAT with effect on 1 April 1995. They are registered in the Register of Medical Practitioners and provide pharmaceutical services under the PS Regulations to those of their patients who qualify for services under regulation 20. 36. The Appellants dispense "takeaway" items, i.e. those ordinarily prescribed under regulation 20 and not personally administered to their patients, in the following way. Following a consultation with the patient, usually personally in a consulting room in the surgery but sometimes by telephone, a doctor prescribes a certain drug and records it in the patient's notes. The doctor then inputs the prescription into his computer, prints off a prescription form and signs it, before handing it to the patient. The patient then takes the prescription form to the dispensary window, the dispensary being a separate room in the surgery. Before handing the prescription form to the person dispensing drugs, who will be one of the doctors in the practice or one of two trained dispensers, the patient is required to sign it and to tick a box on the reverse of the form to indicate either that he qualifies for a free prescription or is required to pay for it. The person dispensing the drugs then takes them off the shelf, checks that they match those prescribed, and if necessary measures them or, in the case of pills or capsules, counts them, before inserting them into a box or other container. The dispenser attaches to the container a computer generated printed label containing the patient's name, the drug prescribed and the appropriate dosage. If the patient is liable to a prescription charge the dispenser collects it and places it in the till. The dispenser hands the drugs or appliance to the patient to complete the transaction. 37. Where a doctor in the appellant practice intends personally to administer a drug to a regulation 20 patient, he prescribes it and it is dispensed identically to a takeaway item, except that it is the doctor who goes to the dispensary and obtains it. He then takes it back to the consulting room and administers it. Rarely the prescription form will be prepared and signed later. (It was not made clear to us whether this is invariably the Appellants' practice, or in some instances they supply the drug administered from in-house stock without preparing a prescription form. We anticipate that some supplies are made from such stock, but need make no finding of fact on the matter). 38. We infer from Dr Thornton's evidence as a whole and find that where a doctor in the appellant practice personally administers a drug to a non-regulation 20 patient he supplies it from in-house stock. He does not prepare a prescription as there is nothing to be dispensed, but merely administers the drug. 39. On occasion, where a doctor in the appellant practice knows in advance that his regulation 20 patient will be attending for a particular treatment, it having been prescribed at an earlier consultation, he will have printed out the prescription form, signed it, and obtained the appropriate drug from the dispensary before the patient arrives. The same situation prevails where a "take-away" drug recommended by a consultant or another GP has been prescribed and instructions on its use must be given, e.g. an asthma inhaler. 40. To obtain payment for their dispensing services to regulation 20 patients, the Appellants remit total prescription receipts from patients to the Local Health Authority monthly, together with all the prescription forms with which they have dealt. The Health Authority pays the Appellants monthly in arrears for the drugs and appliances they have dispensed, payment being calculated according to the Drugs Tariff and the Statement of Fees and Allowances. The Authority also provides them with a statement of the amount paid. Payment for personally administered drugs is made by the Health Authority in exactly the same way as for take-away drugs. 41. Most of the drugs personally administered by a doctor in the Appellant practice are vaccines administered by injection. The quantity of each vaccine injected varies between ½ ml. and 3 mls. The injection process involves the use of minor items such as disposable syringes, cotton wool, sticking plaster, etc. 42. Dr Thornton explained, and we find, that the injection of a drug requires consideration by the administering doctor before, during and after injection: before, to satisfy himself that the patient is of the right age and size for the vaccine, that his state of health permits it, that he is not allergic to it, and that the treatment proposed is appropriate to his illness or injury; during, in that the right muscle is selected for injection; and after, where, e.g. he advises no physical exercise, or no intake of alcohol. 43. He accepted, and we again find, that a drug that can only be introduced into the body by injection is of no use to the patient until injected. Dr Thornton agreed in cross-examination that he only very rarely permits a drug requiring injection to be taken away from the surgery for administration, and gave as an example a vaccine prescribed for backpacker going to a remote and high-risk area of the world. He also said that there are only two circumstances in which he will personally administer drugs (including vaccines): 1) if they are incapable of self-administration; and 2) where he has decided that a drug should not be self-administered, even though it can be. 44. Dr Thornton described, and yet again we find, that the aim of a doctor administering a drug is to ensure that it is administered in such a way as to minimise any jeopardy to the patient's health and to maximise the benefits to him; as he said "administering drugs is an essential part of the care package that a doctor chooses with his patient."" Paragraph 38 of the Tribunal's decision contains an error which may have led them to the wrong result. The parties agree that the doctor will provide a prescription every time a drug is provided for a patient, whether or not the drug is dispensed or is administered by the doctor to a Regulation 20 patient or any other patient. That was the finding of fact made by the London VAT Tribunal in the case of Dr Wooding and others v The Commissioners of Customs & Excise of 13th July 1999. The Tribunal in that case found in favour of the doctors. They concluded that it was artificial to distinguish between those drugs which are provided to a patient under Regulation 20 and those which are subsequently administered by a doctor. The Tribunal Decision – The Tribunal rightly concluded that it should apply the guidance given by the ECJ in Card Protection Plan Ltd v Customs & Excise Commissioners Case C-349/96 [1999] STC 270. Their conclusion was as follows: "74. Applying the principles laid down by the ECJ in the Card Protection case to the facts of the instant case, we hold: 1) that, having regard to all the circumstances in which drugs and appliances are personally administered and applied by the Appellants to their regulation 20 patients, the supplies which they make are those of medical services: in so finding we look to the commercial reality of the transactions in question and distinguish them from transactions in which the Appellants simply sell by retail takeaway drugs and appliances dispensed for their regulation 20 patients; 2) that there is a single supply from an economic point of view: the commercial reality is that the Appellants in personally administering or applying drugs and appliances to their regulation 20 patients provide a single package of medical services of the type usually provided by GPs i.e. as required by para. 12(1) of Schedule 2 to the GMS Regulations; 3) that it is artificial to regard supplies of drugs and appliances personally administered or applied to regulation 20 patients as independent and distinct supplies: they are supplied as part of a single package of medical services, i.e. as part of a care package described by Dr Thornton as being chosen with his patient; 4) that the essential feature of the supply of a drug or appliance personally administered to a regulation 20 patient is that of medical services appropriate and proportionate to the condition of the patient at the time of administration: the supply is not an aim in itself, having no free standing utility to the patient, but merely a means of his obtaining the benefit of medical services provided by the Appellants; 5) that as no prescription charge is made for drugs and appliances personally administered or applied to any patient, whether a regulation 20 patient or not (a fact which we find indicative of the NHS expecting the drug or appliance to be supplied by the doctor from in-house stock), there is no separate price that might point to the supply being separate from that of medical services; 6) that it is irrelevant that the drugs and appliances personally administered or applied by a doctor may be available to a regulation 20 patient of the Appellants on prescription in circumstances other than those in which they are so administered or applied and then constitute supplies of pharmaceutical services; and 7) that, however described, drugs and appliances personally administered or applied by the Appellants to their regulation 20 patients cannot be regarded as being separate from the supply of medical services for one element is entirely dependent on the other so that there is true indissociability: again, the supply of drugs and appliances is part of the provision of treatment whereby the doctor's skills and knowledge are applied in rendering all necessary and appropriate personal medical services of the type usually provided by GPs. 75. We are entirely satisfied and hold that the dominant purpose of the provision and personal administration of drugs by the Appellants to their regulation 20 patients is as part of a single supply of medical services. Thus we answer the second question before us." It should be noted that the error in paragraph 38 of the Tribunal's findings of fact (see paragraph 14 above) was carried through into paragraph 74(5) of the decision and probably also into paragraph 74(3). The Judgment - The judge first considered whether administration of the drug to a regulation 20 patient was a supply "of any qualifying goods in accordance with a requirement or authorisation under regulation 20 …" (see item 1A of Group 12 of Schedule 8 of the 1994 Act). Having set out the submissions of the parties he concluded: "41. The purpose of Regulation 20 is to enable doctors to step into the shoes of pharmacists in areas where rural patients have difficulty in obtaining access to a pharmacist. Pharmacists have no power personally to administer drugs. Regulation 19(a) obliges a doctor to provide to a patient any appliance or drug not being a Scheduled drug, where such provision is needed for the immediate treatment of that patient before a provision can otherwise be obtained. Regulation 19(b) gives to a doctor the discretion to provide to a patient any appliance or drug, not being a scheduled drug, which he personally administers or applies to that patient. Under Regulation 19, there is no obligation or discretion simply to provide appliances or drugs to a patient. The provision of drugs must be accompanied either by treatment of the patient under Regulation 19(a), or personal administration or application to the patient by the doctor of the drug or appliance in question under Regulation 19(b). 42. In my judgment the Tribunal came to the right conclusion. The obvious intention of the zero-rating provision in Sched. 8, Group 12, Item 1A is that it applies to supplies of drugs by doctors when they are acting as pharmacists in relation to Regulation 20 patients. That is what, in my judgment, the words "in accordance with a requirement or authorisation under" Regulation 20 connote. When the doctor supplies or dispenses take away drugs the doctor is acting as a pharmacist, which is the whole purpose of Regulation 20. But when the doctor personally administers the drugs, whether it is needed for immediate treatment under Regulation 19(a) or is administered under the authority of Regulation 19(b), the doctor is not acting "in accordance with a requirement or authorisation" under Regulation 20. The doctor is simply not performing the function of a pharmacist. I also find it difficult (although I do not rest my conclusion on this ground) to characterise the injection of a drug as the supply of goods within the meaning of 1994 Act, Sched. 4, para. 1, and the Sixth Directive, Art. 5(1)." The judge then came to consider whether if there was a supply under regulation 20, the supply of the drug or appliance was a separate supply or was part of a supply of the doctor's medical services which was exempt under item 1A of Group 7 of Schedule 9 of the 1994 Act. The judge concluded that the dispute on this was to be treated as one of fact. That being so, the court should only interfere if the Tribunal could not reasonably have come to the conclusion it did. That did not happen in this case and therefore the appeal should fail on that basis. However he went on to consider the appeal on its merits and concluded: "74. I am satisfied that on Issue 2 the Tribunal came to the right conclusion, and that it so irrespective of whether the matter is a question of law on which I must come to my own view or whether I should approach the question on the basis of whether the Tribunal could reasonably have come to the conclusion it did. 75. In my judgment the Tribunal adopted the right approach. If I am right in my primary view that it was faced with a task of appreciation of the facts in accordance with the Card Protection Plan criteria, then there is no basis for interfering with its decision. The Tribunal had regard to the circumstances, and decided that there was a single supply from an economic point of view, and that it would be artificial to split the supply. It found that the essential feature of the supply was that of medical services. Although it may have been wrong to suppose that there is no separate price for the drugs (payable by the NHS), the European Court held that the fact that there was a separate price was not conclusive, and I do not consider that this error vitiates, or requires reconsideration of, the decision. If the question should be approached as if it were a matter of law, I would have reached the same conclusion as the Tribunal. The economic and commercial reality (and also the practical and social reality) is that the doctor is supplying a single package of medical services." The Appeal – I cannot accept the judge's conclusion that the issue raised in the second question that was decided by him was one of fact. In cases such as this, the facts were found by the Tribunal. They were not in dispute before the judge. What was in dispute was whether there was a supply which was zero rated. That required the court to decide what was the legal effect of the transaction. That is a question of law. That was the conclusion of this Court in British Railways Board v Commissioners of Customs & Excise [1977] STC 221 and in British Airways Plc v Commissioners of Customs & Excise [1990] STC 643. The reasoning in the speeches of the House of Lords in Commissioners of Customs & Excise v British Telecommunications Plc [1999] STC 758 is only consistent with such a conclusion. I accept that proper regard should be given to the conclusion reached by the Tribunal, but in this case the parties agree that the Tribunal misunderstood the evidence upon an important issue. They carried that error through to their conclusion in paragraph 74(5). In my view that error required the judge to reconsider the case on its merits. The important issue in this case concerns the way that the steps of the administration of drugs by the Partners are to be classified. For example, is there only one supply which is medical care or is there more than one supply? If there is more than one supply, are the supplies separate and, if so, is one a supply of goods? Mr Ewart, who appeared for the Partners, submitted that guidance on classification should be obtained from E.C. Commission v United Kingdom Case 353/85 [1988] STC 25 and from the judgments of this Court in Customs & Excise Commissioners v Wellington Hospital Ltd [1997] STC 445. I disagree. In the E.C. Commission case, the Commission contended that the United Kingdom's exemption from VAT of "the supply of services and in connection with it, the supply of goods" by a registered medical practitioner was not consistent with Article 13A of the Sixth Directive which confined exemption to the supply of services and did not extend to the supply of goods unless such goods were supplied as an integral part thereof and included in the price of the service. The court decided that Article 13A (1) only covered the provision of medical care and excluded the supply of goods "without prejudice to provisions of goods which are indissociable from the service provided." No attempt was made to provide guidance as to what were the circumstances where the provision of goods would be considered as indissociable. It was not an issue as it is in this case. In the Wellington case, a dispute arose as to whether, amongst other things, drugs supplied during hospital treatment were exempt or zero rated. By a majority the court concluded that they were zero rated. Millett LJ gave the leading judgment. He did not have the advantage of the judgment of the ECJ in the Card Protection Plan case. The result was that the passage in Millett LJ's judgment at page 464 g to h does not match paragraph 31 of the judgment of the ECJ in the Card Protection Plan case. Millett LJ did look at "the reality" of the case and therefore approached the dispute along the lines adopted by the ECJ. Even so, it is not helpful or appropriate to seek to analyse the issues and judgments in the Wellington case to see whether they are consistent with the guidance of the ECJ in Card Protection Plan. That was the first case in which the ECJ was asked to decide what were the appropriate criteria for deciding whether a transaction which comprised several elements is to be regarded as a single supply for VAT purposes or as two or more supplies to be assessed separately. It is therefore best practice to start with that case and look forward to the way that it has been applied. I therefore turn to that case. In the Card Protection Plan case, Card Protection Plan Ltd (CPP) offered holders of credit cards a credit card protection plan. The plan included protection against financial loss utilising a block insurance policy and other services to avoid inconvenience to the credit card holder. The Commissioners contended that the service supplied was chargeable to VAT on the grounds that the services were a 'package' and taxable as such. CPP contended that the services should be wholly or partially exempt as they involved the making of arrangements for insurance. The House of Lords sought guidance as to what were the appropriate criteria for deciding, for VAT purposes, whether a transaction which comprises several elements is to be regarded as a single supply or as two or more distinct supplies to be assessed separately. The ECJ gave this guidance: "27. It must be borne in mind that the question of the extent of a transaction is of particular importance, for VAT purposes, both for identifying the place where the services are provided and for applying the rate of tax or, as in the present case, the exemption provisions in the Sixth Directive. In addition, having regard to the diversity of commercial operations, it is not possible to give exhaustive guidance on how to approach the problem correctly in all cases. 28. However, as the Court held in Case C-231/94 Faaborg-Gelting Linien v Finanzamt Flensburg [1996] ECR I-2395, paragraphs 12 to 14, concerning the classification of restaurant transactions, where the transaction in question comprises a bundle of features and acts, regard must first be had to all the circumstances in which that transaction takes place. 29. In this respect, taking into account, first, that it follows from Article 2(1) of the Sixth Directive that every supply of a service must normally be regarded as distinct and independent and, second, that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system, the essential features of the transaction must be ascertained in order to determine whether the taxable person is supplying the customer, being a typical consumer, with several distinct principal services or with a single service. 30. There is a single supply in particular in cases where one or more elements are to be regarded as constituting the principal service, whilst one or more elements are to be regarded, by contrast, as ancillary services which share the tax treatment of the principal service. A service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service supplied (Joined Cases C-308/96 and C-94/97 Commissioners of Customs and Excise v Madgett and Baldwin [1998] ECR I-6229, paragraph 24). 31. In those circumstances, the fact that a single price is charged is not decisive. Admittedly, if the service provided to customers consists of several elements for a single price, the single price may suggest that there is a single service. However, notwithstanding the single price, if circumstances such as those described in paragraphs 7 to 10 above indicated that the customers intended to purchase two distinct services, namely an insurance supply and a card registration service, then it would be necessary to identify the part of the single price which related to the insurance supply, which would remain exempt in any event. The simplest possible method of calculation or assessment should be used for this (see, to that effect, Madgett and Baldwin, paragraphs 45 and 46). 32. The answer to the first two questions must therefore be that it is for the national court to determine, in the light of the above criteria, whether transactions such as those performed by CPP are to be regarded for VAT purposes as comprising two independent supplies, namely an exempt insurance supply and a taxable card registration service, or whether one of those two supplies is the principal supply to which the other is ancillary, so that it receives the same tax treatment as the principal supply." That guidance was applied by the House of Lords in Customs & Excise Commissioners v British Telecommunications Plc [1999] STC 758. In that case BT purchased new cars from the manufacturers. A deduction of input tax on the purchase was prohibited, but BT claimed as inputs the VAT upon the delivery charge. The House of Lords held that for VAT purposes the delivery was incidental to the purchase. Looking at the transaction as a matter of reality, there was one contract for delivered cars and one supply for VAT purposes. Lord Slynn reviewed the authorities and concluded at page 765H: "On the authorities it is clear that the fact that one "package price" is charged without separate charge for individual supplies being specified does not prevent there being two separate supplies for VAT purposes. In my opinion the fact that separate charges are identified in a contract or on an invoice does not on a consideration of all the circumstances necessarily prevent the various supplies from constituting one composite transaction nor does it prevent one supply from being ancillary to another supply which for VAT purposes is the dominant supply. Even though it may be desirable to approach each supply as if it were a separate supply and even though each supply in a composite transaction may be an independent separate supply the essential features of a transaction may show that one supply is ancillary to another and that it is the latter that for VAT purposes is to be treated as the supply. … In my view here if the transaction is looked at as a matter of commercial reality there was one contract for a delivered car: it is artificial to split the various parts of the transaction into different supplies for VAT purposes. What B.T. wanted was a delivered car; the delivery was incidental or ancillary to the supply of the car and it was only on or after delivery that property in the car passed. The fact that delivery could have been arranged differently under a separate contract between B.T. and the transporter or by B.T. collecting the car itself does not mean that when there is a contract for a delivered car the two supplies must be kept separate. Of course B.T. had the option to make other arrangements as is argued but the fact is that B.T. did it this way as part of one contract and in my view as part of one supply. The fact that individuals buying a car or small companies buying a few cars cannot have the same arrangement which B.T. has and may have to buy from a dealer does not make the arrangement with B.T. so different that the supply must, like the provision of long distance pickup in the Madgett and Baldwin case [1998] STC 1189 be regarded as not ancillary but as a distinct supply. One result of this approach is that B.T. is in the same position in regard to VAT as companies buying a small number of cars from a dealer. They could not recover the input tax because of the provisions of the Order of 1992. If B.T.'s argument is right B.T. would have a considerable tax advantage over such other traders. That discrimination of this kind would be avoided may not be a reason for arriving at the conclusion which I have reached but the fact that such a result is not discriminatory may be some indication that it is right." It is right that I should cite a substantial part of the opinion of Lord Hope as any attempt to cite small extracts would, I believe, damage the logic. Lord Hope said at page 767: "As regard must be had to all the circumstances, no single factor will provide the sole test as to whether the supply in question is a distinct and independent supply or is incidental or ancillary to another principal supply. The fact that price for the supply in question has been or can be separately identified as having been charged for additionally, as the tribunal held after considering the sample transactions in this case, is not the test. Nor is the fact that the supply in question is an optional one which the taxable person could have provided for himself, and so did not need not take when as a matter of convenience he took the other supply to which it is said to have been ancillary. The Court of Appeal attached considerable importance to this point, as also did the tribunal and Dyson J.: [1998] S.T.C. 544, 547F. But in my opinion it is just one of the factors to be taken into account in the examination of all the circumstances. Nor is the question to be resolved by asking, as the respondents contend, whether the two supplies are "physically and economically dissociable". That phrase is taken from the decision of the European Court of Justice in Commission of the European Communities v. United Kingdom (Case 353/85) [1988] S.T.C. 251, paragraph 33. In Customs and Excise Commissioners v. Wellington Private Hospital Ltd [1997] S.T.C. 445, 462F-G Millett L.J. suggested that it expressed the same concept as that which is contained in the words "integral," "incidental" and "ancillary." But the facts and the questions to be decided in those two cases were different from those in the present case. In Commission of the European Communities v. United Kingdom the problem related to the interpretation of the term "medical care" in the context of article 13 A(1) of the Sixth Directive, and in particular as to whether the exemption covered goods such as corrective spectacles supplied to patients in connection with the provision by the doctor or other authorised person of medical care. As Millett L.J. recognised in the Wellington Private Hospital case at p. 459C-E, the Court was not laying down a general rule of classification for use in all cases where the question is raised as to whether a particular supply is or is not incidental or ancillary to another supply. It may be said that before the supply can be regarded as a separate and distinct supply it must, at least to some degree, be physically and economically dissociable from the other supply. But it would not be right to take this factor as the sole criterion as to whether the supply was separate and distinct from the other supply or was merely incidental or ancillary to it. If that were so, it would mean that in every case where it was possible to dissociate the two economically and physically (for example, because one supply was of goods and the other supply was of services and the price for each supply could be separately identified) the two supplies would have to be treated as separate supplies for VAT purposes. That would not be consistent with the guidance which the Court gave in Card Protection Plan Ltd v. Commissioners of Customs and Excise, paragraph 29 that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system. According to this guidance, the question is one of fact and degree, taking account of all the circumstances. Cases can be envisaged, such as the tours provided in connection with the hotel accommodation in Customs and Excise Commissioners v. Madgett and Baldwin [1998] STC 1189, where the relationship between the two supplies would be so disproportionate as not to enable the transaction to be regarded as comprising one supply. Another example, where the supply was of transport and delivery services, would be where the goods were transported by special arrangement with the purchaser by unusual methods or over unusually long distances. The facts of this case do not fit into that category. … In the present case the essential feature which can be seen in each of the sample transactions is the purchase by B.T. from the manufacturer of a delivered motor car. Property and risk were to remain with the manufacturer until the point of delivery. B.T. could have gone to the factory to take delivery of the motor car, but it was more convenient to get the manufacturer to deliver the car to B.T. This seems to me to be a good example of the kind of case, in the context of a transaction which involves the supply of both goods and services, which the Court had in mind when it referred in Card Protection Plan v. Customs and Excise Commissioners, paragraph 30 to a service which did not constitute for customers "an aim in itself, but a means of better enjoying the principal service supplied." In this case, because of the volume of their purchasing power, B.T. were able to deal directly with the manufacturer instead of, as others do who buy cars for their businesses, purchasing their cars through dealers in motor cars. The sole purpose of obtaining and paying for the transport and delivery services was to enable B.T. to complete the purchase transaction by taking physical delivery of the cars at a place of their own choosing which was more convenient for them than the factory. The commercial reality was that they were, by this means, obtaining the equivalent of what they would have got had they purchased the cars from an authorised dealer who had obtained the cars from the manufacturer and made them available for sale on its premises. The dealer would have recovered from them the cost of transporting and delivering the cars to its premises from the factory, together with the price paid to the manufacturer, all as part of the cost of the supply of the motor cars to the customer. In that case there would plainly have been only one transaction, not two. The substance and reality of the matter is that that also is true of the transactions which were entered into between B.T. and the manufacturers. There is one other factor which, in my opinion, supports the view that the supply of the transport and delivery services were incidental or ancillary to the purchase of the motor cars and are not to be regarded as a separate and distinct supply for VAT purposes. As a matter of general principle comparable transactions should for VAT purposes, so far as possible, be treated equally. Taxable persons who purchase motor cars for business use from authorised dealers are precluded by the Blocking Order from recovering as input tax the VAT paid on the price charged by the dealer for the supply. This includes the cost of transporting and delivering the cars to the dealer's premises from the factory, which the dealer recovers from the customer. If B.T. were able to recover as input tax the VAT charged by the manufacturers on the service of transporting and delivering the cars to their premises from the factory, they would be obtaining more favourable treatment than that available to others in the market for the purchase and delivery from authorised dealers of the same motor cars." Mrs Hall also took us to the judgment of Laws LJ in Customs & Excise Commissioners v FDR Ltd [2000] STC 672. At page 693 he said: "54. While I hope these observations are helpful I think there is some danger of over-elaboration and needless complexity in this field. We are not here concerned with deep legal principle, but with the articulation of a fair and reasonable approach to those cases where there is a question how should the consideration given by a supplier for his reward be categorised for the purposes of VAT, when there are multiple acts of supply involved The simpler it is the better, so long as it is kept consistent with the doing of justice. With respect I apprehend (but I by no means propose to lay down any rule) that where this sort of issue arises, the first question to be asked may be couched as Lord Nolan put it: what is the true and substantial nature of the consideration given for the payment. That will identify the apex or the table-top. The second question will be whether there are other supplies which are ancillary to the core. 55. But there is, I think, one further complication. Where the core supply is on the table-top model--a congeries of supplies which are integral to each other or indissociable--it may not be self-evident from the description of the core supply at which the court or tribunal arrives what its tax treatment should be. In that case, it will be necessary to look again at the elements which comprise the core, and arrive at a decision on the facts whether, numerically if nothing else, the taxable or exempt elements predominate. Necessarily no such difficulty arises where the core supply is on the apex model." Lord Hope said "comparable transactions should for VAT purposes, so far as possible, be treated equally". It is therefore appropriate to consider the effect of the positions the parties adopt. As I have said the Commissioners accept that the dispensing of drugs by the Partners to their Regulation 20 patients is a supply which is zero rated. Thus a Regulation 20 patient who attends surgery and is diagnosed as having a chest infection may be given a prescription for antibiotic tablets which are supplied by the dispenser at the surgery. If so, the supply is for VAT purposes accepted to be a supply of goods which is zero rated. If the doctor writes out a prescription for an injectable form of the antibiotic which is then collected from the dispenser by the patient or the doctor for injection by the doctor, that the Commissioners contend is not a supply of goods. The whole transaction consisting of the examination through to the injection is considered by the Commissioners to be a supply of services and is therefore an exempt supply. Factually, the difference between the two is the administration of the injection. That can be illustrated by considering the case where the doctor prescribes antibiotic tablets which he obtains from the dispensary. He then hands them to the patient together with a glass of water to enable immediate consumption of two tablets. The patient leaves with the rest. The Commissioners accept that in those circumstances there are two supplies, namely an exempt supply of medical care and a zero rated supply of goods. The difference, say the Commissioners, between that and where there is an injection lies in the medical skill applied when carrying out the injection. That makes the event a composite supply of medical care. During argument other transactions relating to Regulation 20 patient were examined. If the doctor prescribes insulin injections, he may demonstrate to the patient how it is done by giving the first injection. He then hands the rest of the prescription to the patient. According to the Commissioners the first syringe used is part of an exempt supply, but the rest is zero rated. Mrs Hall reminded us that this was an appeal confined to points of law and that we should not go outside the facts of the case. However there was evidence that not only the practice nurse employed by the Partners but also Community Nurses, employed by the Area Health Trust would provide injections of certain drugs such as flu vaccines. As I understand the position of the Commissioners, they contend that when the doctor prescribes the drug and it is administered by such nurses, after being dispensed, there is but one taxable supply which is a supply of medical care. The result is that that supply is exempt from VAT whether or not the person administering the drug is employed by the Partners. In the Card Protection Plan case, the ECJ said that all the circumstances of the transaction must be taken into account. In deciding whether there was one composite supply "the essential features of the transaction must be ascertained in order to determine whether the taxable person is supplying the customer … with several principal services or with a single service." At the hearing of this appeal Chadwick LJ sought counsels' view as to whether it would be right to conclude that the essential features of the transaction involving administration by the Partners to Regulation 20 patients were three in number. First, the diagnosis or medical consultation followed by the writing of the prescription. Second, the supply of the drug and third the act of injection which transferred the drug into the patient. Mrs Hall submitted that it was highly artificial to divide up the transaction into three features. She referred us to the evidence of Dr Thornton which she submitted supported the view that there was in fact just one transaction. I accept that at a particular level of generality it can be said that there was one transaction. However the Commissioners accept that where there is dispensing, there are two features which constitute two supplies. First, the diagnosis and writing of the prescription which is an exempt supply and second the provision of the drug which is a zero rated supply. Thus the Commissioners accept that for fiscal purposes, there are at least two features to such a transaction. Where there is administration of the drug by the doctor, the first feature is the same and logically it would be an exempt supply. In reality the transaction does comprise that feature which is the first feature suggested by Chadwick LJ. For similar reasons I believe that the second feature is a distinct feature. The second constitutes the acquisition of the drug by prescription which is equivalent to it being dispensed. It may or not be administered by the doctor. The patient may decline the injection or may, in the case of the diabetic, take away most of the drug for self-administration. If the second is a distinct feature, the third may in reality also be, as the injection passes the drug into the patient. As Mrs Hall pointed out, the fact that the transaction may have three distinct features does not mean that any one of them was a separate supply for VAT purposes nor that there was a supply of goods. However it would appear illogical to conclude that there are two supplies when the drug is dispensed and only one when the drug is "supplied" and then administered, particularly as the factual position is essentially the same up to and including the stage when the drug is supplied by the dispensary. Paragraph 30 of the judgment of the ECJ in the Card Protection Plan case makes it clear that there will be a single supply where one or more features are to be regarded as constituting the principal service. That paragraph also points out that a service must be regarded as ancillary, if it does not constitute an aim itself, but a means of better enjoying the principal service. The Commissioners contend that when there is administration, the principal service is the supply of medical care and that the supply of the drug is ancillary to it. That they say was the finding of fact by the Tribunal. In the alternative they submit that what is supplied is medical care for at least the first and third features. They submit that those features constitute the table top referred to by Laws LJ in the FDR case. The second element was not an aim in itself and therefore there is but one principal supply, namely the supply of medical care which is exempt. I cannot accept that analysis of the transaction. A person who wants a flu vaccination goes to the clinic with the aim of being injected with the vaccine. He expects to receive medical care comprising the decision as to whether the injection should be given and what to give and the way it is given, but the aim is to obtain the vaccine. That is an aim in itself. Similarly, when the doctor prescribes tablets, the patient expects the doctor to decide whether or not to supply the drug. That is a distinct supply of medical care which is exempt in such circumstances. The patient also has a distinct aim, namely to have the treatment which constitutes taking the tablets. That the Commissioners accept is a separate zero rated supply. The same must apply to self-administered drugs by injection. The difference between such cases and the case where the doctor administers the drug by injection is the skill of the doctor when he carries out the injection. That is a feature. If however, the third feature of Chadwick LJ's analysis is a feature which is not ancillary to the first, then it appears to me to be ancillary to the second as the patient has the aim of obtaining the drug by injection if that is the chosen route of obtaining the drug. In paragraph 31 of the ECJ judgment in the Card Protection case, the court said that a single price was not decisive, but that it could suggest a single service. In the present case, doctors recover payment for medical care and are also separately paid the list price for drugs that are prescribed. Additional payments are made for most vaccinations. Thus when drugs are administered by the doctor, the doctor receives remuneration for the medical care he provides and also payment for the drug that is prescribed. Although the fact of separate payment cannot be decisive, it does indicate that there are at least two supplies. That is consistent with the view taken by the Commissioners when drugs are dispensed. Lord Hope in the B.T. case said that before a supply can be regarded as a separate and distinct supply, it must, at least to some degree, be physically and economically dissociable from the other. In the present case the first feature is physically and economically dissociable from the other features in the same way as it is dissociable when the doctor prescribes tablets which are then dispensed. The doctor is paid in a different way for the diagnosis to that of the supply of the drugs. Further the acts are separate because the drug will only be supplied once the diagnosis and prescription stages are complete and any injection may be refused or self-administered. I accept, as Lord Hope pointed out, that that cannot be conclusive. However I believe it is another pointer to the conclusion that in this case there are at least two supplies, one being a supply of goods which is zero rated. Lord Hope stated that as a matter of principal, comparable transactions should, for VAT purposes, so far as possible, be treated equally. In the present case doctors who do not treat Regulation 20 patients are compensated by the Health Service for VAT payments. It would be odd that doctors who are under an obligation to treat Regulation 20 patients should be in the position where they do not obtain compensation, nor do they obtain a VAT credit when they administer drugs which they dispense. Further, I believe that the supply of a drug for subsequent injection by the doctor is comparable to the supply of the drug for self-administration. In those circumstances such transactions should for VAT purposes, be treated equally. The diabetic wants the insulin and to know how to inject himself. There is no commercial or fiscal reason why the supply and first injection carried out by the doctor to demonstrate the technique should be treated for VAT reasons differently to the supply to the patient and subsequent injection carried out by him. There is no commercial or fiscal reason why the supply and administration of drugs by injection should be treated differently to the supply and administration of tablets to the patient by the doctor. In my view there are at least two distinct supplies consisting of the first of Chadwick LJ's features and the second and third features. Mrs Hall realised that that might be an appropriate conclusion. But she went on to submit that the second and third features should be treated as a composite supply of medical care. It was the skill of the injection that was important. She submitted that that was the conclusion reached by the Tribunal. If that was the conclusion reached by the Tribunal then they were wrong. The aim of the patient is to obtain the drug. I suspect that the patient would prefer to take tablets than to be injected: but the aim is the same. The injection, to adopt the words of the ECJ in paragraph 30 of the Card Protection Plan judgment, is "a means of better enjoying the principal service supplied". The third feature, if it be a separate feature, is ancillary to the second. There are in my view two separate supplies. The doctor supplies medical care and goods. The first supply is exempt. The second is zero rated by reason of section 30 and Schedule 8 of the VATA. The judge's conclusion that in reality the doctor is supplying a single package of medical services is, as I have said, true at a particular level of generality. A Regulation 20 patient goes to his doctor for medical services which includes diagnosis and any relevant drug. But at another level of generality the patient goes to obtain advice and the appropriate drug. That must be the appropriate level of generality as the Commissioners accept that the supply of drugs for self-administration is a separate supply for VAT purposes to the supply of medical care by the doctor. Mrs Hall also submitted that the contentions of the partners were inconsistent with the purpose of Regulation 20 and Schedule 8 of VATA. The purpose was to place doctors who treated Regulation 20 patients on a similar footing to pharmacists. No doubt that was the purpose, but that does not solve the dispute, as Mr Ewart pointed out? When the doctor administers the drug is he in reality dispensing the drug to the patient and then administering it. I believe so. If so, the purpose is fulfilled by concluding that in reality administration by doctors involves a supply of goods just as much as a supply of goods takes place upon dispensation to the patient. The Commissioners also contended that an injection of drugs was not a supply of goods as defined in Schedule 4 of the VATA or as defined in Article 5 of the Sixth Directive as it could not be classified as a transfer of property. That submission disregards what happens. When the drug is injected property must pass. I would allow the appeal. Lord Justice Chadwick : The issue on this appeal is whether the administration of drugs by a medical practitioner to a regulation 20 patient is a taxable supply so as to entitle the practitioner to recover as input tax under section 25 of the Value Added Tax Act 1994 the value added tax ("VAT") charged on the supply to him of those drugs. In that context "a regulation 20 patient" is a patient in respect of whom arrangements have been made under regulation 20 of the National Health Service (Pharmaceutical Services) Regulations 1992 (SI 1992/662) for the provision by the medical practitioner of pharmaceutical services. It is common ground that the provision of drugs dispensed to a regulation 20 patient by a medical practitioner (but not personally administered to that patient) is a taxable supply of those drugs – albeit a supply which is zero rated, see section 30(2) of the 1994 Act and paragraph 1A in group 12 of schedule 8 to that Act. It follows that a medical practitioner who has a dispensing practice may well choose to register for VAT purposes in order to recover input tax on drugs dispensed to regulation 20 patients. But, if he does so, he will not be entitled to a VAT allowance under paragraphs 44.2(v) and 44.4 of the statement of fees and allowances prepared under regulation 34 of the National Health Service (General Medical Services) Regulations 1992 (SI 1992/635). The assumption underlying paragraph 44.4 of the statement of fees and allowances is that a medical practitioner who is registered for VAT purposes will not need a VAT allowance to cover the VAT payable on his purchase of drugs because he will be able to recover that VAT as input tax when he himself makes a taxable supply of those drugs in due course. The assumption is well founded if the drugs are dispensed to a regulation 20 patient. But the effect, if the administration of the drugs by the medical practitioner to the regulation 20 patient is not treated as a taxable supply, is that, in respect of drugs so administered, the medical practitioner must himself bear the VAT payable on his purchase. He is entitled to no VAT allowance under paragraph 44.4 of the statement (because he is VAT registered); and he cannot recover the VAT as input tax (because he does not make a taxable supply). It is that perceived lacuna which has given rise to the present appeal. The issue turns on whether the transaction, in the course of which drugs are administered to the patient by the medical practitioner (usually by way of injection or vaccination), is to be regarded for VAT purposes as a single supply (and, if so, of what) or as a number of distinct supplies (one of which is a supply of the drugs). The correct approach to that question is to be found in the judgment of the Court of Justice on the reference in Card Protection Plan v Customs and Excise Commissioners (Case C-349/96) [1999] STC 270, at paragraphs 28, 29 and 30 (ibid, 293d-f): "28. . . . where the transaction in question comprises a bundle of features and acts, regard must first be had to all the circumstances in which that transaction takes place. 29. In this respect, taking into account, first, that it follows from art 2(1) of the Sixth Directive that every supply of a service must normally be regarded as distinct and independent and second, that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system, the essential features of the transaction must be ascertained in order to determine whether the taxable person is supplying the customer, being a typical consumer, with several distinct principal services or with a single service. 30. There is a single supply in particular in cases where one or more elements are to be regarded as constituting the principal service, whilst one or more elements are to be regarded, by contrast, as ancillary services which share the tax treatment of the principal service. A service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service supplied . . ." Although expressed in terms of the supply of services – which was the context in which the question arose in the Card Protection Plan reference – there is no doubt that the guidance applies equally where the transaction comprises a mixed provision of goods and services – see Customs and Excise Commissioners v British Telecommunications plc [1999] STC 758, 765g, 767e-h. In that appeal Lord Hope of Craighead pointed out (ibid, 767h) that, "as regard must be had to all the circumstances, no single factor will provide the sole test as to whether the supply in question is a distinct and independent supply or is incidental or ancillary to another principal supply". He went to explain (ibid, 768a) that the question was not to be resolved by asking only whether the two supplies are 'physically and economically dissociable'. He said this, (ibid, 768d-f): "It may be said that before the supply can be regarded as a separate and distinct supply it must, at least to some degree, be physically and economically dissociable from the other supply. But it would not be right to take this factor as the sole criterion as to whether the supply was separate and distinct from the other supply or was merely incidental or ancillary to it. If that were so, it would mean that in every case where it was possible to dissociate the two economically and physically (for example, because one supply was of goods and the other supply was of services and the price for each supply could be separately identified) the two supplies would have to be treated as separate supplies for VAT purposes. That would not be consistent with the guidance which the Court of Justice gave in Card Protection Plan Ltd v Customs and Excise Comrs (Case C-349/96) [1999] STC 270 at 293, para 29 that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system. According to this guidance, the question is one of fact and degree, taking account of all the circumstances. . . . " The starting point, therefore, is to have regard to all the circumstances in which the relevant transaction takes place; and to ascertain from those circumstances the essential features of the transaction. It is tempting to proceed on the basis that the circumstances in which a medical practitioner administers drugs to a patient in his surgery or consulting room are sufficiently familiar to be treated as a matter of general knowledge; but I accept that, in addressing this appeal, the Court must confine its consideration to the facts found by the tribunal. On the basis of those facts it seems to me that the essential features of the transaction can be identified as (i) the consultation and diagnosis which leads to the medical decision as to treatment – including the decision by the medical practitioner that the appropriate treatment is for him to administer a drug and the related decision to prescribe that drug; (ii) the supply of that drug for the purposes of treatment; and (iii) the administration of the drug by the medical practitioner to the patient (say, by injection of the drug into the patient). The next step is to ask (a) whether any of those features or elements are physically and economically indissociable from any other elements and (b) whether any must be regarded as ancillary because it does not constitute for the patient an aim in itself, but a means of better enjoying the principal supply. The first of those questions is relevant not because dissociability will necessarily lead to the conclusion that the element constitutes a separate and distinct supply, but because (as Lord Hope pointed out in the British Telecommunications appeal) without some degree of dissociability it is impossible to hold that two or more supplies are separate and distinct. The second of those questions is posed directly by the guidance given by the Court of Justice in Card Protection Plan (see paragraph 30 in the judgment of the Court). It is, I think, not open to serious dispute that the elements which I have identified under (ii) and (iii) – the provision of the drug for the purpose of treatment and the administration of the drug by injection into the patient – are not dissociable. Neither can be regarded as independent of the other. Those two elements (at least) must be regarded as comprised in a single supply. The real dispute is whether the first element – the consultation and diagnosis which leads to the medical decision as to treatment - must also be regarded as comprised in that supply. In my view, the answer to that question is "no". It is, I think, impossible to hold that the first element is indissociable from the other two. It is important to bear in mind that the administration of the drug by, say, injection requires the specific consent of the patient. It cannot be said that the medical decision as to treatment will lead, necessarily, to the administration of the drug. The patient may refuse treatment in that form. Nor can it be said that the provision and administration of the drug must be regarded as ancillary to the consultation and diagnosis, in that the injection of the drug does not constitute an aim in itself but a means of better enjoying the services of the medical practitioner. It may well be that the patient's principal aim is to obtain the drug – accepting that it will be administered by injection - and that (in his eyes) the consultation is a means to that end. Attendance at the surgery for the purposes of immunisation is an obvious example of such a case. The correct analysis of the transaction, as it seems to me, is that it comprises two separate and distinct supplies: a supply of medical services constituted by the consultation and diagnosis leading to the medical decision as to treatment and a supply comprising the provision and administration of the drug. If it is correct to regard the provision and administration of the drug as a supply which is separate and distinct from the prior supply of medical services, then it is necessary to determine whether that further supply – which involves the provision of both goods and services - is, itself, a supply of goods or a supply of services. Without seeking to ignore, or diminish the importance of, the input of medical skill required to administer the drug – say, by injection – it seems to me reasonably plain that, in relation to that further supply, the dominant element is the provision of the drug. Although there may be patients who actually enjoy the medical procedure of injection, I suspect that they are rare. For the "typical consumer" (to whom the Court of Justice directs attention at paragraph 29 of its judgment in Card Protection Plan) the administration of the drug by the medical practitioner is a means of better enjoying the drug which is administered; it is not an aim in itself. Without the drug, the injection would be seen as pointless and unacceptable. It follows that the further supply – although it comprises the provision of medical services as well as the provision of the drug – takes its character for VAT purposes from the dominant element – the provision of the drug – and must be regarded as a supply of goods. For those reasons, as well as for the other reasons which Lord Justice Aldous has set out in his judgment, I agree that this appeal should be allowed. Mr Justice Munby: I agree with my Lords and add only one observation. It is a happy, and as it seems to me important, consequence of my Lords' analysis that not merely are comparable transactions being treated equally for VAT purposes; but that there will in future be no fiscal disincentive to a doctor treating each of his patients in the particular way which in his professional judgment best meets the individual patient's medical, personal and social needs. Order: Appeal allowed; the order of the judge and the Manchester VAT Tribunal set aside; the respondents to pay the appellant's costs of the appeal and below to be subject to a detailed assessment; permission to appeal to the House of Lords refused. (Order does not form part of the approved judgment)

Mr Justice Stanley Burnton: Introduction In these proceedings, the Claimant seeks damages against the Defendant for his alleged deceit in relation to a certificate of the inter-company indebtedness included in the assets of Harvey Goldsmith Entertainments Ltd ("HGE", or "the company") for the purposes of a Share Purchase, Subscription and Shareholders' Agreement ("the Agreement") entered into by the Claimant on 18 September 1998. The parties to the Agreement apart from the Claimant were HGE itself, Harvey Goldsmith, Allied Entertainment Holdings PLC ("Allied Holdings"), Allied Entertainment Group PLC ("AEG") and the Defendant. I shall refer to the Claimant as "Halston" and to the Defendant as "Mr Simons". By the Agreement, Halston agreed: (1) to subscribe for 1640 new A ordinary shares in HGE for a total aggregate subscription price of £750,000; (2) to acquire 588 A ordinary shares in HGE from AEG for £250,000, which together with the new shares would give Halston 20 per cent of the shares of HGE; and (3) to lend £500,000 to HGE on the terms of a loan agreement, to be executed in an agreed form secured by a debenture granted to Halston by HGE over its fixed and floating assets. Clause 1 of the Agreement set out a number of conditions precedent to the agreement and the obligations of the parties under it. Clause 1.1 (f) was as follows: The Company (i.e., HGE) producing written evidence in a form satisfactory to (Halston) of confirmation from Allied and any other relevant member of the Allied Group certifying that the total intra-group indebtedness between the Company and the members of the Allied Group does not exceed the sum of £2.8 million payable by Allied to the Company; For the purpose of satisfying the requirements of that provision, Mr Simons signed a letter certifying that the intra-group indebtedness was not in excess of £2.8 million. The Agreement was duly completed on the date it was made. Halston alleges that the true level of intra-group indebtedness was approximately £3.8 million; that Mr Simons knew that; that but for that false certificate it would not have entered into the Agreement; and that as a result of his fraudulent misrepresentation, it lost all of its investment, apart from a recovery of £200,000 received from Mr Goldsmith and a further £200,000 from Mr Simons under his guarantee. Specifically, Halston alleges that Mr Simons had deliberately caused to be altered a balance sheet of HGE produced by the accounting staff of the Group for the purposes of the Agreement, showing intra-group indebtedness of some £3.8 million, so as to show not more than £2.8 million, in order to satisfy the requirements of clause 1.1(f) of the Agreement, knowing that that figure was very substantially less than the true amount. Mr Simons does not accept that the true level of inter-company indebtedness exceeded £2.8 million. He denies that he altered the balance sheet of HGE. He does not dispute that if the true level of inter-company indebtedness was substantially in excess of £2.8 million, Halston would not have completed the Agreement. It is obvious that, if Mr Simons did deliberately alter the balance sheet of HGE in the manner and in the circumstances alleged by Halston, the certificate was false and he knew that the certificate was false. It follows that the principal issue of fact for determination is whether he did so alter the balance sheet. The second principal issue, which arises only if Halston succeed in establishing that, is damages. The allegation made against Mr Simons is a serious charge of dishonesty. Halston is required to prove its case on the balance of probabilities. However, the seriousness of the allegation is reflected in the burden it must satisfy, which is not significantly different from the criminal burden of proof. The parties and their witnesses Halston is a company registered in the British Virgin Islands. It is ultimately owned by a family trust (the Palan Settlement) of Paul Levinson ("Mr Levinson"), a businessman who in practice makes its investment decisions. He was advised by Philip Keane, a chartered accountant. Mr Levinson and Mr Keane both gave evidence. Mr Levinson's son, Mark Levinson, was also involved in the affairs of Halston, but has since died. The witnesses who say that Mr Simons altered the balance sheet of HGE are David Verrells, a management accountant who was employed by HGE, and Rebecca Drummond, an accountant employed by AEG. Mrs Drummond was in Australia, and her witness statement was adduced in evidence under the provisions of the Civil Evidence Act 1995. Until 18 September 1997, HGE was a wholly-owned subsidiary of Allied Holdings, the holding company of the Allied Entertainments Group. Prior to the completion of the Agreement, the directors of HGE were Harvey Goldsmith and Mr Simons. Wilder Coe were the auditors of the Group and of HGE. HGE was a promoter of pop concerts and other entertainments. Mr Goldsmith ran its business. Mr Simons, a chartered accountant, was the financial director of the Group, and he ran the businesses of the companies in the Group other than HGE. Mr Verrells and Mrs Drummond reported to him. In cross-examination by Mr Prentis, Mr Goldsmith put the division of responsibilities between them as follows: A. The kind of overall financial operations of the business was really overseen by Ed. I had my responsibilities, in essence, were kind of day-to-day on the shows and productions that we were doing and had a kind of overall steer on that. But, in truth, the accounts department really reported to Ed and the auditors in terms of making overall decisions of movements and stuff like that; sometimes I would be party to it, and often I was not because I just was not around. But Mr Simons did not act only as an accountant: Q. Mr Simons' role though was wider than that of being merely an accountant, was it not? A. Yes. Q. Because he ran the film part of the business and the television part of the business? A. Absolutely. He was not there as an accountant. He was there as a fully-fledged -- and, indeed, was a Chairman of the group and had his own part of the business to run. The other shareholders of Holdings were Seymour Gorman, a partner in Lipkin Gorman, who were the solicitors to the Group, and a Mr Schuldenfrei. The other companies in the Allied Entertainments Group ("the Group") were engaged in other parts of the entertainment business: music publishing, classical music, films, television and sports. Mr Levinson and Mr Keane both gave evidence. Halston also called, in addition to Mr Verrells, Mr Goldsmith. Mr Simons gave evidence, and called Mr Gorman. Mr Gorman, on the advice of his insurers' solicitors, had not provided a witness statement. Background and Chronology to the date of the Agreement During the period relevant to these proceedings, of the companies in the Group, only HGE made substantial profits. As a result, it acted as banker to the Group. It lent moneys to other Group companies so that they could meet their liabilities. In addition, AEG would procure payment to it of receipts for tickets for HGE promotions. These moneys were owed by venues of the promotions, and presumably ticket agents also, who sold the tickets, to HGE, and the moneys paid to AEG were treated as loans by HGE to AEG. The result was a considerable inter-company indebtedness, due to HGE. Its balance sheet at 30 September 1995 included over £3.5 million of such debt. By 30 September 1996, that had increased to over £4.9 million. The audited balance sheet at that date shows net assets of less than £1 million. Clearly, on an assets/liabilities basis, the solvency of HGE depended on the ability of the other Group companies to repay their debts to it. The inter-company indebtedness overshadowed the net profits of HGE, which in the year to 30 September 1996 were only about £218,000. Not surprisingly, the accounts of HGE to that date, approved by the directors on 11 July 1997, included a note on the going concern basis on which its financial statements had been prepared. It stated: The parent company's consolidated balance sheet reports a substantial excess of liabilities over assets, principally as a consequence of losses arising on the production and release of a major motion picture reported in the previous period. In response to these circumstances, the group's directors have continued to take steps to secure the necessary finance required to enable the group to meet its liabilities as they fall due by securing additional financial support by way of loans from certain of the group's directors, renegotiating the level of support and the repayment schedule of certain sources of bank finance, … Additionally, since the year end, the group's excess liabilities have been reduced by £1.5 million as a result of the disposal of the rights to certain future television productions to a joint venture in which the group holds a 50% interest; the transaction additionally generating a substantial cash inflow. Furthermore the group's underlying trading performance has been strong, … The directors consider the actions being taken to be sufficient to enable the group and its subsidiaries to continue to trade and to meet their liabilities as they fall due for the foreseeable future. The auditors' report, also dated 11 July 1997, was not qualified, but included the following paragraph: In forming our opinion, we have considered the adequacy of the disclosures made in note 1 of the financial statements concerning the appropriateness of adopting the going concern basis in their preparation. The validity of this policy depends upon the successful completion of the steps being taken by the directors of the parent company to strengthen the group's capital base and secure the necessary finance required to enable the parent company in each of its subsidiaries to meet their liabilities as they fall due. In view of the significance of this uncertainty, we consider that it should be drawn to your attention. Our opinion is not qualified in this respect. The notes to the financial statements of the Group included a paragraph on the appropriateness of the going concern basis for the preparation of the financial statements. It referred to the fact that the parent company's consolidated balance sheet reported a substantial excess of liabilities over assets, principally as a consequence of losses arising on the production and release of a major motion picture reported in the previous period. It was otherwise a similar to the note in the accounts of HGE. The auditors' note was in the same terms as that relating to HGE. Since HGE was the only really profitable company in the Group (described by Mr Simons as "the engine of the Group"), and given the lack of funds in the other Group companies, there were realistically only two ways that the inter-company indebtedness could be repaid. The first was for the other companies to sell sufficient of their assets to meet their liabilities to HGE. The second was for HGE to make sufficient profits to enable substantial sums to be distributed to the Group as dividends. Those sums could then be repaid to HGE in satisfaction of their debts. Mr Goldsmith considered that the second was the more likely possibility, and felt that the high level of inter-company indebtedness put pressure on him to increase the profits of HGE, and indeed he described that as his main concern, as it was unlikely that the Allied Group would otherwise be able to repay it. The shareholders of Allied Holdings realised that the Group required an injection of capital. As Mr Goldsmith put it, … when it became apparent of (sic) the losses in the Group and potentially the inability for the Group to immediately repay the money that it had taken from HGE, we had had discussions. An approach was made to or by Mr Levinson. Negotiations between Mr Levinson's family trust, the Palan Settlement, and the shareholders of Allied Holdings began early in 1997. From an early stage, Mr Levinson was interested in acquiring an interest in HGE only. The acquisition of a substantial minority interest in HGE required the separation of its affairs from those of the remainder of the group. Mr Levinson and Mr Keane had substantial doubts as to the recoverability of the inter-company indebtedness, which were referred to in a fax or letter dated 15 May 1997. Mr Goldsmith and Mr Simons disagreed. The parties negotiated towards the inter-company debt being reduced. Mr Levinson set out the basic principles of the proposed agreement in a fax dated 21 June 1997. Points 1 and 2 were as follows: 1. At March 31, 1997 there were net assets of £1.46 million and intercompany receivables of £3.92 million. 2. Prior to completion, HGE will pay a dividend of £1.4 million to Allied which will reduce the intercompany receivable to £2.5 million. The figures in point 1 would have been taken from management accounts of the company. The nominal ledger of HGE was kept on computer. The system would print documents, apparently in considerable volume, from which the management accounts were prepared. Draft Heads of Agreement were prepared dated at 30 June 1997. The first 5 paragraphs were as follows: 1. At 31 March 1997 there were net assets of £1.46 million and intercompany receivables of £3.92 million. 2. Prior to completion HGE will pay a dividend of £1.4 million to Allied which will be used to reduce the intercompany receivable to £2.52 million. The net assets at that stage will be £60,000 plus the after-tax profits earned since 1 April 1997. 3. There will be no increase in the intercompany receivable nor will there be any upstream or cross-guarantees. All existing guarantees or similar arrangements must be untangled. 4. Palan Trust will subscribe £1 million the new class of shares representing 20% of the enlarged capital of HGE … 5. Palan Trust will make a (secured) loan to HGE of £500,000 … to be repaid not later than 30 September 2000. Mr Levinson had instructed Baker Tilly to carry out due diligence. They produced a draft report dated July 1997. It seems that the draft report was never finalised, apparently because Mr Levinson and Mr Keane considered it sufficient for their purpose. According to the draft report, net intercompany indebtedness owing to HGE was £3.9 million at 31 March 1997. Its net assets were £1.457 million, so that if the inter-company indebtedness was not recoverable, it had a substantial excess of liabilities over assets. The report showed profits before tax of about £200,000 for the year to 30 September 1996 (taken from the audited accounts), of about £500,000 for the 6 months ended 31 March 1997 and a forecast of £884,000 for the year to 30 September 1997. Mr Goldsmith described his concern as follows: My concern was to make sure that the company going forward -- which was agreed by all would be ring-fenced so that if it made a profit it kept the profit – that it had sufficient cash flow to run its business, because that was causing a major strain on the company and in its ability to go forward, and that it had the support of the new investors, and that they would help make the company grow, and through the activities of Mark (Levinson) we could actually develop a much, much bigger business, which was what everybody's anticipation was. Negotiations continued and moved towards the drafting of the formal agreement. Lipkin Gorman acted for the Group and Messrs Goldsmith and Simons; Halliwell Landau for Halston. As mentioned above, the Agreement was executed and completed on 18 September 1997. It included extensive warranties, including warranties of the books of account and other records of the company and of the accuracy of the management accounts for the period from 30 September 1996 to 30 June 1997, subject to the contents of a disclosure letter. Mr Goldsmith and Mr Simons were the personal warrantors, their liability being limited to £250,000 plus defined costs. There was a disclosure letter and, in addition, an agreed bundle of documents which formed part of the disclosure against the warranties. Unfortunately, the bundle of documents has been lost. It can however be seen from the Agreement that the bundle included the management accounts of the company for the period from 30 September 1996 to 30 June 1997, which were warranted to "fairly and accurately reflect in all material respects the assets and liabilities of that company and the state of affairs of that company at such date and its results for (that period)". The conditions precedent in clause 1 included, in addition to paragraph (f), paragraph (e): the Company having declared and paid a dividend of £1 million (under a group election) to Allied thereby reducing the inter-group indebtedness of Allied to the Company by the sum of £1 million; … All of the conditions precedent were satisfied. In addition, as had been agreed between the Group and Halston, AEG assumed liability to HGE for all of the debts payable to it by other companies in the Group. Schedule 3 of the Agreement listed acts of the Company that required the approval of Halston, including a number of provisions intended to preclude it from making any further loans to other Group companies: see paragraphs (j), (k), (l) and (u). Clause 12 contained the so-called ratchet provisions. Halston was granted options to require that the Group transfer shares to it for a nominal consideration in the event that there was any inter group indebtedness to HGE outstanding on 30 September 2000. The percentage of the shares in HGE to which Halston would be entitled depended on the amount of indebtedness at that date. If it was less than £250,000, Halston would be entitled to an additional 10 per cent of the issued equity share capital; if it was £250,000 or more, Halston would be entitled to require such shares as would result in its holding 51 per cent of the issued share capital of the company. Events following completion of the Agreement Upon completion, Mr Levinson and Mr Keane were appointed directors of the company. Its board then comprised them together with Messrs Goldsmith and Simons. Board meetings were held on 16 October and 21 November 1997. The agenda for the latter included the company's accounts. The management accounts to 30 September 1997 were available, having been produced on 20 November 1997. They included a schedule of inter-company debtors as at that date, totalling £3.8 million. AEG was shown as the largest, but not the only, such debtor. Although the total inter-company indebtedness was £1 million more than the sum represented in the certificate for completion, the board minutes indicate that no one raised any concerns. The position changed in the spring of 1998. In a fax to Mr Simons dated 9 April 1998, Mr Levinson complained that his son and Mr Keane had been asking for the monthly management accounts on numerous occasions but they had not been forthcoming. A few days later, in a fax to Mr Simons dated 14 April 1998, Mr Keane repeated the request for regular monthly management information. He stated that Paul and Mark Levinson wanted him to go through the inter-company accounts and asked whether it was possible to finish off the September 1997 financial statements. Rebecca Drummond sent the management accounts for the 5 months to 28 February 1998 to Mr Keane on 17 April 1998. The schedule of inter-company indebtedness showed a total of £3,872,986 due from Group companies. Mr Keane went to HGE's offices on Tuesday 21 April 1998, and went through the management accounts with Mrs Drummond and David Verrells. In a fax to Mr Verrells dated 26 April 1998, which he requested be copied to Mr Goldsmith and Mr Simons, Mr Keane set out 12 points that arose from their meeting. Point 4 referred to the draft financial statements for the year to 30 September 1997, which he must have seen, and stated that they needed to be finalised with the auditors. Those accounts showed inter-company indebtedness of £3.8 million. Points 6, 7 and 8 were as follows: 6. All of the intercompany balances should have been put into one receivable account so that there were no inter-company payables at all. .. 7. Why is the intercompany balance £3.8m. I expected, and the Agreement confirmed, this would not be over £2.8m. 8. Please give me a print out of all the intercompany accounts showing the movements from 18 September 1997 to 28 February 1998. The print out requested in point 8 was never provided. The inter-company indebtedness was discussed between Mr Levinson and Mr Verrells on 12 May 1998. Later that day, Mr Verrells sent a curious fax to Mr Levinson, copied to Messrs Goldsmith, Simons and Keane: Further to our conversation this afternoon my understanding is that the September 1997 year end accounts reflected AEG inter-company loan account as being 3.8 million both Paul and Philip Keane expected this to show 2.8 million. A meeting should be set up as soon as possible to clarify this point. Mr Levinson responded in a fax of 13 May 1998: Thank you for your fax dated 12th May 1998. it is not that Philip and I expected this to show £2.8 million it was contracted to be £2.8 million. On about 12 May 1998, a meeting took place between Messrs Goldsmith, Simons, Gorman and Schuldenfrei: i.e., the shareholders of the Group. The level of the inter-company indebtedness of HGE at the date of the Agreement was discussed. What was said at the meeting was not recorded in writing; at least, if it was, no record is available. Halston alleged in its Particulars of Claim that Mr Simons admitted having falsified the certificate of inter-company indebtedness. As Mr Millett accepted, that allegation is not supported by the evidence. According to Mr Gorman, whose evidence Mr Prentis invited me to accept, as I do: I think the meeting focussed around the fact that the certificate which Ed had signed was looking increasingly as though it was inaccurate and that the figure for the inter-company indebtedness was probably understated by about £1 million, that the agreements, the sale and purchase agreements or the subscription agreement contained provisions for compensation to Halston in the event that it proved that the inter-company indebtedness exceeded £2.8 million or thereabouts and as shareholders Edward and Harvey wanted to alert Mr Schuldenfrei and myself to the possibility of a diminution in our shareholding should Halston exercise the ratchet as compensation for the additional inter-company indebtedness. The result of that meeting was that Mr Schuldenfrei and Mr Gorman: left it to Ed and Harvey to negotiate as best they could the terms with Halston to compensate them for the understatement of the inter-company indebtedness, … Mr Keane not received a response to the points he had raised by 23 June 1998. On that date, he sent a fax to Mr Simons with a further copy of his fax of 26 April. He suggested that a board meeting should be arranged, and stated: The management accounts for May should now be available. Can you please arrange for these to be circulated and I must insist that the balance sheet is included which shows the correct level of the intercompany debt. During 1998, the company required further loans. In March an increased secured bank facility was arranged with Bank Leumi, with an overdraft limit of £750,000. Cash shortages continued. The bank overdraft limit was increased to £1 million. This was insufficient. On 24 September 1998, Mr Verrells sent a fax to Mr Goldsmith, copied to everyone else interested in the company (Messrs Simons, Levinson, Mark Levinson, Keane, Gorman and Schuldenfrei), stating that apart from tax there would be a shortfall of £250,000 at the end of the month, which "needs to be addressed with the utmost urgency". As a result, Mr Goldsmith's pension fund lent the company £250,000, Mr Levinson personally lent it £210,000 and Halston £150,000 (in addition to the loan made pursuant to the Agreement). Mr Goldsmith and Mr Simons guaranteed Halston's original loan of £500,000, which was subordinated to the bank facility. These loans were repayable in December 1998, but the company was unable to, and did not, repay them. During 1998 a number of approaches were made with a view to the sale of all or part of HGE or its business. Between May and November 1998 negotiations took place between Allied and Halston on one side and Tring International plc on the other, with a view to Allied and Halston selling their shareholdings in HGE to Tring. HGE was, according to Mr Goldsmith, whose evidence I accept (indeed, it was not disputed), suffering from "severe cash flow problems". He said, in re-examination: It, well it just was, it was just, it was a constant nightmare from that period onwards how to deal with the cash flow and we were, you know at one point I even had to put in some money myself to pay a deposit for a big tour on the knowledge that that tour was going to be very successful, which it was, just to keep it going and there were even further loans that Halston had put in because they were aware of the cash flow position as well. The transaction fell through in November 1998, and Tring itself collapsed. For the purposes of the proposed transaction, HGE produced audited accounts for the period of nine months ended 30 June 1998. They were approved by the board and signed off by the auditors on the 11 November 1998. They showed intercompany indebtedness of £4.1 million at 30 June 1998, and of £3.78 million at 30 September 1997. It followed that the figure for intercompany indebtedness shown in the management accounts as at 30 September 1997, produced for the board meeting on 21 November 1997, was materially accurate. Shareholders' funds at 30 June 1998 were £1.172 million. The company's profit on ordinary activities after taxation was £555,000. The notes to the financial statements to 30 June 1998 included one on going concern. It referred to in the "substantial excess of liabilities over assets" shown in the Group's consolidated balance sheet, and to the proposed sale by the Group to Tring of its shareholding in HGE, and stated that the gain on the sale would allow Group to settle all amounts owed to the company on completion. The note ended: The directors consider the actions being taken to be sufficient to enable the company to continue to trade and to meet its liabilities as they fall due from the foreseeable future. The directors accordingly consider it appropriate to adopt the going concern basis in the preparation of the financial statements of the company. On 9 December 1998, Mr Keane sent a fax to Mr Goldsmith and Mr Simons in which he raised the subject of the increase in Halston's shareholding as a result of (i.e., as compensation for) the increased inter-company loan. An agenda prepared by Mr Keane for discussion at a meeting on 18 December 1998 referred to the proposed increase in Halston's shareholding and to then current amount of the inter-company indebtedness, namely £4,114,000, and asked: iii) How and when did balance exceed allowed amount? (iv) Interest arrangements on excess over £2.9 million? (v) … (vi) HGE to make immediate demand for excess over £2.8 million? The figure of £4,114,000 came from the management accounts to 30 September 1998. At the board meeting of 18 December 1998, the accounts of the company for the year to 30 September 1997 were approved. The auditors signed off the accounts on the same day. They showed a loss for the year of £102,000, and shareholders' funds reduced to £617,000. A dividend of £1 million had been paid on 14 July 1997 (i.e., in fact well before the date of the Agreement) and applied to reduce the inter-company indebtedness. The amount of that indebtedness at 30 September 1997 was shown as £3,784,099. Note 1.9 to the accounts was as follows: The financial statements have been prepared on the going concern basis. The Allied group's consolidated balance sheet reports a substantial excess of liabilities over the assets, and substantial net current liabilities, as has been previously reported. The group's directors have continued to take steps to improve the financial position, which have included the renegotiation of banking facilities, the introduction of new investors and the commitment of significant levels of finance from certain of the directors' own resources. These actions are continuing, with the group directors in negotiations on several matters which they believe will enable the group to capitalise on the underlying value of its core activities and assets. The group has, furthermore, performed well in its core activities in the period since the year end. The company is dependent on the successful completion of these steps in order to ensure the recoverability of amounts owed to the company by the rest of the Allied group (as disclosed in Note 12). The disposal of this company by the group is one of the matters under consideration to accomplish this. Assuming the successful completion of these steps, the directors consider the actions being taken to be sufficient to enable the company to continue to trade and to meet its liabilities as they fall due for the foreseeable future. The directors accordingly consider it appropriate to adopt the going concern basis in the preparation of the financial statements of the company. The auditors' report referred to this note: In forming our opinion, we have considered the accuracy of the disclosures made in Note 1 to the financial statements concerning the appropriateness of the adoption of the going concern basis in preparation of these financial statements. The validity of this policy depends upon the successful completion of the steps being taken by the directors of the ultimate parent company to improve the group's financial position and secure the necessary finance required to enable the ultimate parent company and each of its subsidiaries to meet their liabilities as they fall due, which, in the case of this parent company would entail enabling the recovery of the intra-group debt owed to it. In view of the significance of this uncertainty, we consider that it should be drawn to your attention. Our opinion is not qualified in this respect. On receipt of those accounts, Mr Keane sent a fax dated 21 December 1998 to Mrs Drummond, copied to Mr Verrells, asking them to provide him with a reconciliation and moving and schedule to the intercompany debt as follows: "1. starting with the balance at 18 September 1997 (which I understand was less than £2.8 million); 2. the 30 September 1997 figure of £3.784 million; and 3. the 30 September 1998 figure of £4.114 million." The figures for 30 September 1997 and a 30 September 1998 were from the audited accounts and could not be, and have not been, disputed. On 22 December 1998, Mr Levinson sent a formal and a serious letter to Mr Goldsmith, Mr Gorman, Mr Schuldenfrei and Mr Simons, i.e. to the personal shareholders of the Group. He referred to the provisions of the Agreement requiring inter-company indebtedness not to exceed £2.8 million and prohibiting without the approval of Halston any intercompany loans, and said: The amount of the intercompany debt (as you know) is currently substantially more than the maximum agreed figure of £2.8 million and has been since the signing of the agreements in 1997. This is in contravention of the agreement we reached and has had a detrimental effect upon the trading performance of HGE which it is extremely short of the working capital its needs. The directors of Allied should have been aware that some was incorrect when the documents were signed. He sought proposals for the reduction of the indebtedness and for compensating Halston: "for the position they find themselves in, namely, that HGE's Balance Sheet is considerably different than that which was shown at the time of the investment as result of having paid monies to Allied without authority. My own view ... is that the level of Halston's equity interest in HGE mass to be increased from 20% to 30%." In a fax dated 15 January 1999, Mr Keane asked Mrs Drummond: Could you please let me know the balance (of the inter-company indebtedness) outstanding on the 18th of September 1997 (the date Halston made their investment) and the movement between 18 and 30 September 1997? He had not received that information by 4 February 1999. He repeated the request in a fax to her and Mr Verrells of that date, saying that he would be in HGE's office later that day. When he visited HGE, he agreed to wait 3 weeks for the information, because a sale of HGE to MMC was under negotiation, and if completed it would be academic. On the following day, 5 February 1999, Mr Simons wrote to Mr Keane: I understand from Rebecca that you have asked the information regarding the loan account, details of authorisation for payments, etc. The fact that the loan account is significantly in excess of the agreed amount is conceded and, as such, Allied/Harvey and I have agreed that Halston received an increase in equity which, at current valuation, would amount to a bonus of £725,000. If that is not to be the case, then I would rather revert to the existing shareholdings and deal with the issues of payments and receipts on the loan account. I have instructed Rebecca not to reply until you and I have agreed the way forward. The "current valuation" referred to was derived from the proposed agreement with MMC. On the 19th of February 1999, Mr Keane sent an e-mail for Mr Levinson: A status report: - Intercompany accounts I was continuing to ask questions (but not receiving replies) about the intercompany accounts and the withdrawing of cash; for example, when did it happen, who authorised or instructed it to happen. Eventually Ed (Simons) said he was not happy with the "witch hunt" under reason to the increased shareholding was to avoid this investigation. I could have either the 30% holding all the answers us not both. He wrote to me on fifth February and I said I would leave it in abeyance the three weeks as it would all be academic if a deal goes through. A board meeting of HGE was held on 25 February 1999. Management accounts were produced for the meeting, and showed profit before tax of £181,000 for the period of four months ended the 31 January 1999. Mr Keane, who was at the meeting, reported to Mr Levinson, who was not, in a fax dated 26 February 1999. In relation to cash flow, he stated: 5. So far as finance is concerned, he asked Mark and I to get Halston off his back. I said that was the same as asking us to get Leumi off his back. They act independently and he has to deal with them properly. He will reply to their latest letters, give them the financial information they asked for and seek an extension of the loans to 31st March. I asked if the money would be there to repay them on 31st March and he said "only if we have done a deal by then – it is a target date". I told him that wasn't good enough and he was storing up trouble with Halston (Mark agreed especially as there was to be a changeover in Trustees around then and they wanted a clean position). There is only a remote possibility a deal will be done in the next 5 weeks. 6. Harvey says a deal must be done as the business will need more cash. He could not say when nor how much. More problems! Meanwhile, other efforts were being made to sell HGE. In December 1998 an approach was made to or by Multimedia Corporation Plc ("MMC") under which Halston and Allied Holdings would sell 50 per cent of their shareholdings for £4 million cash, of which £3.2 million would be used to repay inter-company indebtedness, thereby enabling HGE to repay the outstanding and overdue loans that had been made to it by Halston (£650,000), Mr Goldsmith's pension fund (£250,000) and Mr Levinson (£210,000). The Executive Summary for that transaction stated: This will leave £2.09m for cash flow purposes, which is considered sufficient for HGE's current trading needs. The company currently enjoys bank facilities of £1m with Bank Leumi, of which it is expecting to repay £250,00. £2.09 million was, of course, far more than the cash available to the company at the time. The MMC deal went as far as the preparation of a draft formal agreement, but no agreement was concluded. On 19 July 1999, Mr Goldsmith sent a fax to Mr Simons, copied to Mr Levinson, his son and Mr Keane, with a calculation of the current cash position of the Company, showing a cash shortage of almost £500,000. In the summer of 1999, HGE organised a concert in Cornwall for visitors who came to see the total eclipse of the sun. It was a financial disaster, incurring a loss of (according to a memorandum dated 3 September 1999) about £770,000 net of VAT. The company could not withstand that loss, and on 29 September 1999 Administrative Receivers were appointed by the company's bankers at the instigation of the directors. Subsequently, on 24 November 1999, a winding-up order was made on the petition of a creditor, a company representing unpaid artists. The Official Receiver's report to creditors, dated 22 December 1999, stated that Mr Goldsmith attributed the company's failure to "the promotion of the Eclipse concert and the inability of the Holding Company to repay its indebtedness" . Mr Goldsmith also stated that the Holding Company had been unable to repay its indebtedness after the losses incurred by the Group in connection with the motion picture referred to in the notes to the 1996 accounts referred to above. Halston received nothing by way of dividend in the liquidation of HGE, and nothing in respect of the loans it had made, save that Mr Goldsmith paid a total of £280,000 under the terms of his guarantee of the loans. Halston also intimated a claim against Mr Simons; if that was in writing, a copy has not been put in evidence. In a letter dated 13 June 2002, Mr Simons set out his position and said: Whilst it was accepted that the Allied figures were incorrect in respect of the loan account, this never was a wilful deceit and it certainly was not known, prior to the signing. It was disclosed to Phillip Keane (sic) immediately we became aware. It most definitely was not the reason for HE (sic) going into receivership … How did the certificate come to be given? There are only the following practical possibilities: (1) The certificate of not more than £2.8 million was correct. (2) The figure of £2.8 million was an understatement, due to an error in the accounting records of HGE. (3) The figure of £2.8 million was an understatement, as a result of the deliberate insertion in the certificate required by the Agreement of a figure less than that showed by the accounting records of HGE. In considering the probabilities, it is necessary to take account of the fact that the inter-company indebtedness at 30 September 1997 was some £3.8 million, an undisputed figure shown by the audited accounts, and that the management accounts produced for the board meeting of 21 November 1997 showed a figure that was not materially different from the audited accounts. If the certificate of £2.8 million was correct (i.e. inter-company indebtedness did not exceed that figure on 18 September 1997), there must have been a very substantial increase in that indebtedness in a short space of time: about £1 million in 12 days. The transactions or money transfers giving rise to that increase must have been known at the time, and certainly could have been ascertained. Furthermore, those transactions or transfers should not have taken place: they were prohibited by the Agreement unless Halston approved them, which it did not. That was the information that Mr Keane sought. It was never provided. There is nothing to suggest that Mr Simons asked for it. There is no reason to believe it could not have been obtained from the accounting records of the company. Given the apparently very substantial increase in inter-company indebtedness between completion of the Agreement and the month end, and the provisions of the Agreement prohibiting such an increase, one would have expected Mr Simons himself to obtain an explanation from Mr Verrells or Mrs Drummond. He did not do so. The information sought by Mr Keane was information to which he was entitled as a director of the company, quite apart from the interest of Halston. The reason given by Mr Simons for ordering Mr Verrells and Mrs Drummond not to provide that information, as he accepted he did, is unsatisfactory. A reconciliation of the certified indebtedness and the audited figure was never provided before the company collapsed. Moreover, Mr Simons has not pleaded that there were any transactions between completion and month end to account for an increase in the inter-company indebtedness; none were suggested by him in correspondence before the proceedings; none is referred to in his witness statement or identified in his evidence; and it was not put to Mr Verrells in cross-examination that there were such transactions. There is clear evidence that Mr Simons accepted that the figure of £2.8 million was an understatement of the inter-company indebtedness at the date of the Agreement. I refer to Mr Gorman's evidence set out above concerning the meeting in April 1998 between Messrs Goldsmith, Simons, Gorman and Schuldenfrei. Mr Goldsmith's recollection of the meeting was similar to Mr Gorman's. In cross-examination, he said: I was really angry and my presumption and assumption was at that time that whatever Ed had, whatever the figure that Ed had signed was incorrect. Subsequently, in an answer to me, he said: What was in my mind (at the meeting) was that a document had been signed and agreed which was wrong. How it came about I had no idea, I just presumed it was just figures were just not done properly and I would say that our accounts department were pretty good, but I would not class them in you know in the top five in the country and there were so many small and different transactions going on and so on and so forth that you know in my mind mistakes could have been made and I just felt that Ed had signed off on a piece of paper that was, whether he knew it was wrong or it was wrong and it was clearly that important which what transpired afterwards it was wrong and it was his responsibility because why did he sign it? Mr Simons's evidence about this meeting was vague and defensive. I reject it in so far as it is inconsistent with that of Mr Gorman and Mr Goldsmith. In addition, I refer to Mr Simons' own letter to Mr Levinson dated 13 June 2002 referred to above. Mr Simons was in a position to know whether the figure was accurate or not, and he would not have accepted its inaccuracy if he had thought it to have been correct. In cross-examination, he disputed that the letter was an admission of the inaccuracy of the certificate. The letter is clear, and his attempt to dispute the clear admission is one of the reasons why ultimately I have been compelled to reject his evidence relating to the certificate. Indeed, Mr Prentis, in cross-examining Mr Levinson, seemed to accept that the figure had been inaccurate. He said: Can we turn to what happened once it was discovered that it was pretty likely that the 2.8 million figure was wrong, … April '98 onwards? If the certificate was incorrect because of defects in the accounting records of the company, some explanation is required for the fact that those records produced materially accurate management accounts, at least so far as the inter-company indebtedness at 30 September 1997 was concerned, in November 1997. No such explanation was given at the time or during this trial. Mr Simons accepted that the true inter-company indebtedness could be obtained from the nominal ledger, provided it was up to date: 14 December at page 91. That leaves the third explanation. It is what Mrs Drummond and Mr Verrells say occurred. The evidence of the witnesses I found Mr Keane, who was the first witness, to be patently honest and candid. In fact, there was little dispute concerning his evidence. Mr Levinson's evidence was similarly not substantially challenged. I considered Mr Goldsmith to be a careful and reliable witness: see, for example, his query as to the meaning of the question whether he was "involved in the negotiations" with Halston. He gave no sign of exaggeration or seeking to mislead. He readily admitted that he had received a quid pro quo for his testimony. His responses to questions concerning the Allied shareholders' meeting of April 1998 were convincing. The major factual issue is between the evidence of Mr Verrells and of Mrs Drummond on the one hand and that of Mr Simons on the other. Mr Gorman, another impressive witness, was not challenged. As I mentioned above, Mrs Drummond's witness statement was put in evidence under the Civil Evidence Act 1995. She said: 26. In the lead up to the completion of the deal (which I was recall was delayed on several occasions) the accounts staff were instructed to keep the books as up to date as possible so that it would be a simple exercise to produce a summary of the financial position of HGE for the completion. Therefore at around this time, all book entries were being inputted onto the computer system on a daily basis. 27. In or around the middle of September 1997, I finished preparing the summary spreadsheet (which I usually produced on a quarterly basis) which summarised the draft accounts for HGE to the period to mid September 1997. I produced the spreadsheet (from a template which I used regularly) from the accounts system but it was completely independent of the accounts system i.e. an entry in the spreadsheet (which was manually inserted) would and could not automatically update the accounts system in respect of that entry and vice versa. I gave copies of the spreadsheet to David Verrells and Mr Simons only. As far as I was concerned, from my detailed knowledge of the financial position of the Group, these figures were correct. I cannot now recall exactly what the figure for inter-company debt was but I believe that HGE was owed in the region of £3.6 to £3.7 million. I understood that this summary was to be provided to Halston as part of the completion papers for the deal. 28. Shortly thereafter, Mr Simons asked me on a couple of occasions, to change the formatting of the spreadsheet. These changes were not changes of substance but rather ones of presentation. For example, I was asked to consolidate all the small debtors so they showed on the spreadsheet as one line rather than being listed separately and I was asked to consolidate the inter-company debt figure, again so it showed as one figure as opposed to being attributed to each individual company. 29. On about 16 September 1997 I was called into a meeting being held between Mr Simons and David Verrells, in David Verrells' office as Mr Simons wished to make some further changes to the spreadsheet. At this time the computers were not networked and I therefore went back to my computer, copied the spreadsheet onto a computer disc and returned, with the disc, to David Verrells' office and loaded it onto his computer. 30. Mr Simons then sat at the computer and attempted to alter some of the figures on the spreadsheet. I recall that he found this difficult because his sight was so bad and he therefore asked David Verrells to make some changes for him. I also remember that Mr Simons wrote the figures which he wanted to change on a piece of paper. 31. First, Mr Simons asked David Verrells to alter the spreadsheet summary of HGE's accounts, debiting ticket sales in advance and debiting VAT. At this time the balance on the advance ticket sales was substantial because there were a number of events in the pipeline. I believe that it was in the region of £3.1 million. Advance ticket sales were treated in the accounts as a current liability (because theoretically if the event to which they related did not go ahead for some reason, HGE would have been obliged to refund the monies to the purchasers of the tickets). The effect of the adjustment was therefore to reduce the current liabilities giving the impression that further monies would be received in due course and making the cash balance look healthier. I do not now remember the exact amount of the adjustment but I believe that it was in the region of £700,000. 32. Second, Mr Simons asked David Verrells to alter the figure for inter-company debt on the spreadsheet summary. Again, I cannot now remember the exact amount of the adjustment but I believe the figure was reduced by about £900,000. No corresponding adjustments were made (or proposed to be made) by Mr Simons in the AEG accounts and/or spreadsheet summaries for the Allied companies. 33. When the changes had been made, I printed a copy of the spreadsheet off for Mr Simons. Prior to completion of the Halston deal, no further changes were made to the spreadsheet. I know this because I was the only person who had access to it. 34. No explanation was given by Mr Simons to justify these amendments to the spreadsheet and I was not instructed to make identical adjustments in the HGE accounts system. As far as I was aware at the time (and subsequently),there was no factual basis for making these adjustments. In hindsight, once I became aware that it was a pre-condition of the investment by Halston that the level of inter-company debt be certified as being less than £2.8 million, it became apparent to me that Mr Simons' strategy was to seek to present an unjustified reduction of the inter-company indebtedness in order to ensure the Halston deal went ahead. To the best of my knowledge and belief this was wholly outside Mr Goldsmith's knowledge. Post Investment 35 Due to the fact that the year end was 30 September and we knew that the auditors were coming in very soon after the year end, we continued to update the ledgers on an almost daily basis after completion of the deal on 18 September 1997. 36. At around the end of October/beginning of November 1997, I recall that I handed to Philip Keane (who was one of the directors appointed to the board of HGE as a Halston representative) the October management accounts and also the draft accounts for the year ended 30 September 1997. Both sets of accounts showed the inter-company indebtedness as £3.8 million. In preparing these accounts, I did not revert to Mr Simons to ask if the adjustments, which he had made prior to completion of the deal, should be incorporated. I prepared them from the information on the accounts system. … 38. The actual indebtedness was in excess of £2.8 million, both at the time of the completion of the (Halston) deal and as at 30 September 1997. In summary, according to Mrs Drummond, the spreadsheet produced for the purposes of the Agreement showed lower liabilities and lower assets than the figures produced by the computer accounts system. The balance sheet would therefore balance. Of course, I have to bear in mind that I did not have the benefit of hearing Mrs Drummond cross-examined. However, no reason has been put forward for her signing a false statement making such a serious allegation against Mr Simons. No notice was served by Mr Simons under CPR Part 33.4(1), seeking to cross-examine her. But perhaps the most important test of her statement is the possibility it provides for testing the testimony of Mr Verrells. In his first witness statement, Mr Verrells referred to the cash flow difficulties of the Group in the period before completion of the Agreement. He said: 13. In light of the financial difficulties of the Group as a whole, cash flow strain became enormous. The cash flow problem became so severe that there came a point when we could not meet our commitments to pay deposits to artists and foreign entertainment taxes due on amounts earned by foreign artists. Also PAYE and VAT returns were affected. 14. … any profit in the Group was generated by HGE almost entirely. There was very little profit from any other source within the Group as the other companies within the Group continued to make heavy losses. 15. As the other companies within the Group were not profitable, often payments to creditors of those companies would be made from HGE. A nominal ledger account was set up to record payments made from HGE on behalf of the other companies within the Group and this is how the inter company debt position in the accounts was created. In effect the cash flow in HGE was used to "fund" expenses and activities of the rest of the Group resulting in monies owed to HGE by other Group companies. These details were recorded in hand written journal entries on a weekly basis and inputted onto nominal ledgers, held on a bespoke computer system maintained by the Accounts department. One of the juniors in the Accounts team would generally input these details. If HGE paid an invoice on behalf of another company within the Group it would be detailed on the ledger and charged to the relevant company within the Group. Summaries were produced quarterly which were then reconciled by the auditors, Wilder Coe when undertaking their annual audit. What he said about the treatment of advance payments in the accounts was broadly the same as Mrs Drummond's statement: 18. HGE promoted concerts and the public would pay the theatre box offices in advance for those tickets.  HGE would ask the theatre box offices to remit those monies to them on a regular basis.  As an example, if £1 million was sent in this way, the correct accounting treatment for that would be to increase the cash in HGE's books but to show a liability for the monies received (i.e. £1m) not yet earned.  There would be no change to the net worth of the company. 19. What actually happened was that Allied (who in effect acted as the Group banker) would request the money from the box offices and bank the £1m cash.  The money did not always find its way into HGE but was sometimes used by the group for other purposes.  Nevertheless, HGE should have recorded this by increasing their liabilities by £1m and increasing the inter-company debt by £1m.  According to the balance sheet, it should have made no change in the net worth position of the company but instead of HGE having £1m in cash they would have an increased inter-company debt receivable of £1m. Mr Verrells did not substantially depart from this evidence in cross-examination. At my instigation, in view of the serious allegation made by Mr Verrells against Mr Simons and the anticipated conflict between their evidence, Mr Verrells gave his evidence relating to the production of the certificate in chief, in response to Mr Millett's questions, rather than simply by confirmation of his witness statement. His evidence was as follows: Q. Mr Verrells, I am going to ask you some questions about what happened at a meeting in mid-September 1997 at which you, Miss Drummond and Mr Simons were present. First of all, do you recall the meeting? A. I recall the meeting in question. Q. Who called it; who summoned the meeting? A. I would think that Edward Simons would have requested this meeting. Q. Do you remember why he requested it? A. The reason for the meeting would have been to discuss the manuscript and the management account summary spreadsheet. Q. Tell me about the spreadsheet, what was it? A. The spreadsheet would have represented a profit and loss and a balance-sheet for Harvey Goldsmith Entertainments to be presented to Halston. Q. From what information was it created? A. The information that would have been put on to a spreadsheet would have come from the computer nominal ledger, i.e., the accounting system that that was held by Harvey Goldsmith. The two did not talk to each other, as it were, though. One was prepared manually from the other. Q. What was the purpose of the spreadsheet as you understood it at the time? A. The spreadsheet would have been used to condense and represent the profit and loss and balance-sheet for Harvey Goldsmith. Q. In connection with what, do you remember? A. I am not sure I understand the question. Q. In connection with what? A. In connection with doing a deal with Halston. Q. Thank you. What did you know about the level of inter-company indebtedness and its importance as between Halston, on the one hand, and HGE, on the other? A. At that point within that meeting I am not sure that I became aware of the importance of the exact amount of that inter-company indebtedness at that point because I had not been privy and did not know all the details of the arrangements that were being made between Harvey Goldsmith Entertainment and between Halston. Q. Do you recall now what the true level of inter-company indebtedness was so far as HGE was concerned in mid-September 1997? A. I believe it to be circa 3.6 million, my Lord. Q. The meeting you told us was summoned by Mr Simons. Just going back to it, did he tell you why he wanted it, what the meeting was going to be about? A. We would have gone through -- as far as I can recall, we would have gone through minor presentation changes which would not necessarily have materially affected any of the figures. There was a change that we did make though that would materially affect the inter-company account between HGE and AEG. Q. What did Mr Simons tell you that he wanted in respect of that inter-company debt? A. He wanted it to reflect about a million pounds less than it currently did. Q. Did he tell you why? A. I do not recall that we had an exact conversation reflecting the reasons why. As I recall it, at that particular meeting it is just that is the way he wanted it presented. I do not recall going into any further detail about exactly why that was at that point. Q. Who else was present with you at that meeting? A. Rebecca Drummonds who unfortunately is away in Australia. Q. Yes. At the meeting what documents did you have in front of you? A. We would have had the management accounts that we already had printed off, so we had a whole copy of that. We would have had possibly the working -- Q. Pause there. Printed off from where? A. Printed off from a normal every day laser printer on A4. MR JUSTICE STANLEY BURNTON: From the computing system that was used to keep the accounts or -- A. No, this would just purely be from a stand-alone laptop or computer which would have a printer, not connected to the nominal ledger system at all. Then the working papers that would have related to this spreadsheet would have been taken off from the nominal ledger print-outs from the accounting system itself which would have been reams and reams of computer paper and the one would have been used to condense it down into the other. MR MILLETT: You mentioned a spreadsheet a moment ago. Was that one of the documents that you had at the meeting? A. Yes, there would have been -- we would have had a spreadsheet, yes, reflecting the management accounts of Harvey Goldsmith Entertainments. Q. What did that spreadsheet -- let me ask you it this way. Did that spreadsheet show what the true level of inter-company indebtedness was? A. Yes, it would have done so far as I am concerned, yes. Q. Do you recall what that spreadsheet as a piece of paper had on it by way of a number for the inter-company indebtedness? A. Yes, there would have been two pieces of paper. The first would have shown the profit and the loss and the second sheet would have shown the balance-sheet. The balance-sheet is the one that we are concerned with here and, as I recall, that would have shown an inter-company loan of 3.6 million. MR JUSTICE STANLEY BURNTON: Who had prepared that. Had you prepared that or someone else? A. Rebecca Drummond would have done and I would have reviewed it. MR JUSTICE STANLEY BURNTON: When you say you would have, do you mean you did? A. I would -- I looked through the documents prior to the meeting, yes, my Lord. MR MILLETT: Was that your practice? A. Yes. Q. So the spreadsheet is in front of you showing, as you told us, 3.6 million of inter-company debt. What did Mr Simons do when he saw that piece of paper? A. As I recall, he made some changes to three of the ledger accounts that would have shown on there. Q. How did he do that? A. As I recall, he did it in pencil at that time. Q. Can you remember what those changes were? A. One was to the advance ticket sales which, shall I explain what I mean by advance ticket sales? Q. Yes, please. A. That is where the general public buy tickets and we take the income for that for shows that have yet to occur or mature. So that is why they are called "advanced" because they are monies that are taken for shows that have yet to take place. Q. Can you remember the figure for the advance ticket sales that Mr Simons wanted you to change? A. As the figure was, before we changed it? Q. What was the figure before you changed it? A. I cannot remember. Q. What was the figure you changed it to? A. I think it was changed by £700,000. MR JUSTICE STANLEY BURNTON: In which direction? A. To decrease it. MR MILLETT: So that is the first change. What was the second change? A. There was also a change to the VAT account, as I recall. Q. Can you explain that please? A. How the VAT account worked or the change to it? Q. No, what the change to that was? A. The change again I think would have decreased the VAT by that amount, 400,000, as I recall. Q. So just so that I am clear, you were lowering, to put it in a non-technical sense -- A. That is perfectly okay with me. Q. -- the figure due to HM Customs and Excise in respect of VAT? A. I think that is correct, yes. Q. Can you remember for what period? A. No, I do not precisely. It would have been an ongoing figure. The net effect of these changes would have then I believe decreased the liability that AEG had towards HGE by about £1 million. Q. You mentioned a moment ago a third change. Can you please tell us -- A. That is the one I am now referring to, the inter-company accounts. MR MILLETT: Thank you. You say -- MR JUSTICE STANLEY BURNTON: That was a third one. When you say the net effect. A. By changing the other two you would then change the inter-company account as well by the corresponding amount of the other two. MR JUSTICE STANLEY BURNTON: Just explain to me how the VAT account affects the inter-company amounts? A. Because if you change the VAT account then you would have to change something correspondingly and I think that we changed the inter-company account by the same amount that we changed the VAT account by. So by changing the VAT and the advance cash in the same direction, the opposing entry to that would be to increase the figure of the inter-company account, sorry, decrease the figure of the inter-company account. I am not sure -- I cannot recall exactly how we did that. The material changes to the spreadsheet though were to reduce the amount of the inter-company account by about £1 million so that it looked like AEG only owed Harvey Goldsmith Entertainments 2.6 rather than 3.6 million. That is as far as I can recall of this meeting. MR MILLETT: Thank you. So he made those changes. Well, can I just ask you. Who had the pencil in the hand to make the changes on the spreadsheet? A. Ed would have done that. Q. Then what did he do with the piece of paper, the spreadsheet? A. That is one of the things that I was looking for before we actually left that building. I could never find it again. Because Mr Simons would not have known how to use the laptop computer to change the figures again so that when we reprinted them, the inter-company account then looked as he wanted it to. Either Rebecca Drummond or myself would have had to have done that. Q. You say either Rebecca or you would have had to have one that. Do you recall what you or Rebecca did with the piece of paper with the pencil changes on it after you made them? A. I do not recall, no what occurred to that working paper. Q. No. Please listen to my question? A. I am sorry. Q. Do you remember what either you or Miss Drummond did with the changes on the piece of paper immediately after Mr Simons had made the changes on the spreadsheet. What happened next? A. We used the manual changes that had been made on that piece of paper to then effect them and put them back into the laptop computer and then reprint them, so they were printed out properly, not with written changes upon them. Q. Did you reprint it? A. Yes, we did. Q. And what did you do with the piece of paper that was printed off? A. I imagine that either myself or Rebecca would then have given it back to Mr Simons. Q. You say you imagine. Can you recall? A. I cannot recall physically doing it myself. I cannot recall whether I went and gave it back to Mr Simons or whether I instructed Rebecca Drummond to do so but one or the other of us would certainly have done so. Q. Can you remember who made the physical changes on the computer to the document so that it would print off in the way you have described? A. I think as far as I can recall it was Rebecca Drummond but if Rebecca Drummond were here and said "No, Mr Verrells, in fact you did it" I would not dispute that. It was one or the other of us. Q. Thank you. Now what was your understanding about the reason at the time, your understanding about the reason for the adjustments that Mr Simons had asked you to make? A. Because although, as I have said, at that point in time I was not privy to all of the deals that were going to be either warranted or agreed between Halston and Harvey Goldsmith Entertainments, I understood that the reason why we were making the change to the inter-company accounts was so the deal become acceptability – would have become acceptable to Halston so that it might proceed. MR JUSTICE STANLEY BURNTON: I am sorry to interrupt you. What was said at the time that the changes were made? What was the reason given then? A. That we needed to reflect an inter-company balance of 2.6, not 3.6, as it currently was. I do not recall any conversation that would have gone on between Mr Simons, Rebecca Drummond and myself where Mr Simons may have at that point said "This is why we need to do it". MR MILLETT: Did Mr Simons ask you to make any corresponding entries in the database for the AEG accounts or spreadsheet summaries? A. No, he did not. Q. What was your view at the time of the propriety of what you were being asked to do by Mr Simons? A. I was uncomfortable with it. Q. Were there any other changes made to the spreadsheet? A. There were no material changes to the spreadsheet that I can recall, no. No motive has been suggested for Mr Verrells to have produced a false allegation against Mr Simons. His account differs in minor detail from Mrs Drummond's statement (as in relation to whether Mr Simons tried to enter altered figures on a computer), but no more than one would expect when a statement is given so long after the event. Mr Verrells was a credible witness. He readily conceded that he could not remember certain matters. He showed some strain and embarrassment, but that is consistent with his admission that he participated, albeit on Mr Simons' instructions, in the production of a fraudulent certificate, and with the fact that he was giving evidence against a man with whom he had worked for some time. What he said about his reluctance to become involved in this litigation rang true: I had been unwilling to do so was because I just hoped that the whole issue was going to go away; I wanted nothing more to do with it; I had no good recollections of that period in time; I remember being under a great deal of trouble and stress and I really did not want to go back and revisit these events all over again six and a half years later He readily corrected the exaggerations and inaccuracy in paragraph 4 of his second witness statement, which were, I suspect, due to tendentious drafting by a solicitor unfortunately typical of many witness statements. His evidence was not shaken in cross-examination. He summarised the entries that Mr Simons had caused to be changed: Yes, the three entries I remember Mr Simons changing on the A4 management account spreadsheet were advance cash, were VAT and were the inter-company account between AEG and HGE. The most material of these is the AEG/HGE inter-company account which it was reduced from 3.6 to 2.6 which I understand is the amount that Halston wished the inter-company not to be exceeded by in order that the deal could go ahead. … I am not certain how we came about to reducing it from 3.6 to 2.6 but I very clearly remember Mr Simons taking pencil to paper to change those accounts by those figures, that is correct His readiness to concede what he did not recall or know is illustrated by this exchange: MR JUSTICE STANLEY BURNTON : Just help me with this. I understand how changing the advance ticket sales figure affects inter-company accounts, because if the money was due to HGE but was going to Allied, it would increase Allied's indebtedness to HGE. A. That is correct. MR JUSTICE STANLEY BURNTON: What I have not understood is how the VAT figure affects the inter-company account. A. I have to say I am not completely clear myself. I cannot exactly recall why changing the VAT should affect that either. I am not sure. I am sorry, I cannot recollect. I mean, if I could, I would say so. I cannot recollect. He was asked why he had not told anyone, and in particular Mr Goldsmith, what had happened: That is a very good question. On the one hand, I thought that without doing this deal with Halston and showing that the liabilities, the inter-company balance, was not 3.6 but was rather nearer 2.6, without showing that, the deal would have fallen through; and I thought the company would have folded extremely quickly thereafter without this deal being done. Obviously I was concerned that that did not happen and I did not want it to. I also thought that Mr Simons would have some way in the next few months of working out a way for us to get out of the problem that we were incurring for ourselves by misrepresenting that inter-company balance. I did not want the company to go down. I did not want to lose my job. What I was doing at that point I knew was wrong, but those are the reasons why I carried on and did them and did not have any further conversation with anybody else in the short-term with regard to those figures that were changed. What he said about Mr Goldsmith was also convincing, as I noted at the time: He could have understood me going up to him and saying, "Look, Harvey, I have just done something I really should not have done. I have just falsified some figures that I have been asked to. What do you think?" I think if I had told him he would have had a complete and utter fit and blown the whole deal out of the water anyway, and I did not want him to do that. Mr Justice Stanley Burnton: Did you think of going to him? A: Yes. I slept not very much over the next few weeks. I did not know what to do. Mr Verrells' and Mrs Drummond's evidence explains why the management accounts to 30 September 1997, which were prepared by them from the nominal ledger, showed a correct figure for the inter-company indebtedness: when the certificate was produced, no entries were made in the nominal ledger kept on a separate computer to reduce that amount. In his Defence, Mr Simons accepted that he played a part in the production of accounting information for the Agreement and its completion: It is admitted that on Mr Simons' instruction some changes were made to the presentation of certain accounting information produced to Halston as part of the disclosure exercise carried out by HGE and AEG in anticipation of the agreement being entered into. Such alterations were by one or more members of the accounts team headed by David Verrells, were for the purposes of consolidating the inter-company indebtedness figure across the group into one accurate net figure (as requested by the Claimant) and it did not in any way alter the substance of the information produced. His evidence was that the documents produced by Mr Verrells and Mrs Drummond and shown to him on 17 or 18 September 1997 showed inter-company indebtedness of less than £2.8 million, which enabled him to sign the certificate required by the Agreement. I am unable to accept Mr Simons' evidence in so far as it conflicts with that of Mr Verrells and Mrs Drummond. I have already given my reasons for accepting that Mr Verrells was a truthful witness. That view was provisional: it depended on the credibility of Mr Simons. In my judgment, Mr Simons' conduct after the figure of £3.8 million for inter-company indebtedness at 30 September 1997 emerged is inconsistent with his case, and his evidence in support of his case lacks credibility. (1) Mr Simons' evidence was that his initial reaction to the figure of £3.8 million in the management accounts was that it was an incorrect overstatement of the inter-company indebtedness. He went so far as to say that at the time of Mr Keane's fax of 14 April 1998 he was "absolutely convinced" that the figure of 3.8 million was incorrect. If so, I find it incredible that, once the figure for 30 September 1997 had appeared, having regard to its implications for the correctness of the certificate that he had signed and the reliability of the company's nominal ledger and accounting system (as to which a warranty of reliability had been given in the Agreement), he would not have instructed Mr Verrells and Mrs Drummond to check the figure in the management accounts to 30 September 1997. The need for such inquiry was increased by the facts that he had considered the information produced by Mr Verrells and Mrs Drummond to be reliable, and that he had himself checked the schedules they had produced, and by the fact that Halston were bound to question the figure. Mr Simons' evidence was that he had no recollection of asking Mr Verrells or Mrs Drummond about the correctness of the figure in the management accounts, but would have done so. If he had asked them, having regard to the importance of the matter ("very serious": see 14 December at page 158), I am confident that he would have remembered doing so. Equally, he would have remembered their response, but he did not do so, except in the vaguest terms (see 14 December page 156). (2) As Mr Millett pointed out, the suggestion that Mr Simons had initially thought that the figure of £3.8 million was incorrect, and that he had spoken to Mr Verrells about the supposed mistake, was not in Mr Simons's witness statement, and was not put to Mr Verrells. It is not reflected in any contemporaneous document or anyone else's evidence. (3) If, as Mr Simons suggested at one point (14 December at page 156), Mr Verrells agreed that the figure of £3.8 million was wrong, Mr Simons would have instructed him to produce the correct figure. It is not suggested that he did so. Indeed, we know that the figure was correct, and that Mr Verrells would have been unable to show that it was incorrect. On 14 December at page 162-3, Mr Simons said that Mr Verrells told him that the spreadsheet they had given him in September 1997 had been incorrect; but he immediately resiled from that (because, in my judgment, he realised that he had admitted that the figure of £2.8 million had been incorrect), and stated that Mr Verrells had told him that there had been unauthorised transactions between 18 and 30 September 1997 that had increased the inter-company indebtedness. (4) If Mr Simons was convinced (or doubtful) of the incorrectness of the figure of £3.8 million, he would have communicated that to Mr Keane or to Mr Levinson or to Mr Goldsmith. He did not do so in writing, although he was receiving faxes from them. Mr Goldsmith did not suggest that Mr Simons had told him that the figure was a mistake. Nor did Mr Gorman. Mr Simons' evidence that he was sure he had spoken to Mr Keane about this was not reflected in his witness statement; it was vague and unsatisfactory and I reject it. (5) If Mr Simons believed that the figure of £2.8 million for 18 September 1997 was correct, and believed or came to believe that the figure of £3.8 million for 30 September was correct, he would have enquired why an increase had been permitted, since it meant that there had been a failure to observe the restrictions in the Agreement. The need for enquiry as to the correctness of the figure for 30 September was enhanced by the concern of the Allied Group shareholders that the ratchet provisions of the Agreement might lead to their loss of control of the company. (See, e.g., Mr Simons 14 December page 125.) He would have instructed Mr Verrells to produce a reconciliation of the inter-company indebtedness figures for 18 and 30 September (i.e., the information sought by Mr Keane). No such reconciliation was carried out. Mr Simons could not recall whether he pressed Mr Verrells to produce such a reconciliation. Again, if he had done so, Mr Verrells would have produced it and it would have been available for Mr Keane, or else Mr Simons would have chased it up. It is significant that in evidence Mr Simons could do no more than speculate as to the transactions, if such there were, that increased the level of indebtedness from £2.8 to £3.8 million. Furthermore, I find that Mr Simons did not communicate to anyone else his belief that the cause of the discrepancy was that unauthorised inter-company loans had been made between 18 and 30 September 1997. He suggested in cross-examination that he may have given that explanation to Halston, but in the vaguest of terms. (14 December page 179-180: "I cannot tell you whether I did or whether I did not do that.") It was not put to either Mr Keane or to Mr Levinson that he had done so, and there is no suggestion that he did so in Mr Simons' witness statement. Lastly, Mr Simons' belief that this was the cause of the discrepancy is inconsistent with his acceptance that the figure of £2.8 million was wrong as at the date of the certificate: I refer to paragraph 60 above. Again, this explanation of the discrepancy was not put forward until Mr Simons gave evidence. (6) All this is consistent with his knowing that the figure in the management accounts for 30 September 1997 was materially the same as the true figure for 18 September 1997. (7) His evidence that he did not ensure that monthly management accounts were produced after completion because he was not responsible for their production is difficult to reconcile with his instruction to Mr Verrells and Mrs Drummond not to provide the information sought by Mr Keane. He was clearly considered by Halston to be responsible: hence Mr Levinson's fax to him of 9 April 1998, referring to previous requests made to him for the management accounts, and Mr Keane's fax to him of 14 April 1998. Mr Simons did not take issue with these faxes at the time. Management accounts were in fact provided within a few days of the fax of 14 April. Mr Simons had good reason to defer the further provision of management accounts, which would confirm the excessive amount of inter-company indebtedness. I reject Mr Simons' evidence on this. (8) Mr Simons had no good reason to order Mrs Drummond not to provide to Mr Keane the information he was seeking. He admitted that he had done this in his letter of 5 February 1999. It is likely that he had done so earlier, which is why the information had not already been provided. His explanation was that the information was irrelevant if the deal with Tring or MMC went through, and that he did not want Halston to require HGE to claim payment from the Allied Group of the excess £1 million of inter-company indebtedness. But Halston already knew that there was £1 million of inter-company indebtedness more than had been represented, and that either the certificate had understated it or, if the discrepancy was due to loans made after 18 September 1997, those loans had been made in breach of the Agreement. Withholding the information from Mr Keane was not going to reduce the risk of a demand by Halston for reduction of the inter-company indebtedness. In any event, Halston had already taken a position, in point 3.vi in the enclosure to Mr Keane's fax of 9 December 1998, set out above, and in Mr Levinson's letter of 22 December 1998. In my judgment, the true reason for withholding the information was that it would show that the certificate had understated the level of inter-company indebtedness, and might lead to the truth as to its creation coming out. There are two matters pointing to a different finding. First, if Mr Simons did cause a false certificate to be produced, he must have expected the truth to out sooner or later. Secondly, in his letter of 5 February 1999 he offered to deal with the issues of payments and receipts on the loan account if the offer in the letter was not accepted by Halston. These are cogent points. They are, however, outweighed by the matters pointing the other way. In my judgment, the pressures to complete the deal with Halston led Mr Simons to take the chance that he could deal with Halston's complaints in due course, by achieving some sort of compromise. So far as the letter of 5 February 1999 is concerned, I think that the offer it contained was thought to be sufficiently attractive to be accepted and thereby avoid further investigation. I am unable to see why Mr Simons should have instructed Mrs Drummond not to provide the information sought by Mr Keane if there was nothing to hide. My conclusion is supported by Mr Simons' demeanour in the witness box. He became increasingly hesitant and defensive as his cross-examination focused on what he had done and thought after Halston questioned the figure for inter-company indebtedness of £3.8 million at 30 September 1998; because, in my judgment, he had no convincing explanation for what had occurred. It follows that I find that Mr Simons knew that the true level of inter-company indebtedness at 18 September 1997 was in the region of £3.8 million; and that he deliberately caused a spreadsheet and certificate to be produced showing it to be less than £2.8 million in order for the Agreement to be concluded and completed., knowing that to be an understatement. If the certificate had not been signed and produced, Halston would not have entered into the Agreement or completed it. It follows that Mr Simons is liable to Halston for damages for deceit. Damages Mr Millett and Mr Prentis agreed that the law on damages in cases of deceit is authoritatively stated in the decision of the House of Lords in Smith New Court Securities Ltd v Citibank [1997] AC 254. The House approved the decision of the Court of Appeal in Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158. At [1997] AC 266-7 Lord Browne-Wilkinson summarised the applicable principles as follows: In sum, in my judgment the following principles apply in assessing the damages payable where the plaintiff has been induced by a fraudulent misrepresentation to buy property: (1) the defendant is bound to make reparation for all the damage directly flowing from the transaction; (2) although such damage need not have been foreseeable, it must have been directly caused by the transaction; (3) in assessing such damage, the plaintiff is entitled to recover by way of damages the full price paid by him, but he must give credit for any benefits which he has received as a result of the transaction; (4) as a general rule, the benefits received by him include the market value of the property acquired as at the date of acquisition; but such general rule is not to be inflexibly applied where to do so would prevent him obtaining full compensation for the wrong suffered; (5) although the circumstances in which the general rule should not apply cannot be comprehensively stated, it will normally not apply where either (a) the misrepresentation has continued to operate after the date of the acquisition of the asset so as to induce the plaintiff to retain the asset or (b) the circumstances of the case are such that the plaintiff is, by reason of the fraud, locked into the property. (6) In addition, the plaintiff is entitled to recover consequential losses caused by the transaction; (7) the plaintiff must take all reasonable steps to mitigate his loss once he has discovered the fraud. Mr Prentis referred to the example of the sick horse referred to by Lord Steyn at [1997] AC 254, 279: The same legal principle must govern sales of shares, goods, a business or land. It is therefore possible to simplify the problem. The example given by Cockburn C.J. in Twycross v. Grant (1877) 2 C.P.D. 469 is instructive. He said, at pp. 544-545: "If a man buys a horse, as a racehorse, on the false representation that it has won some great race, while in reality it is a horse of very inferior speed, and he pays ten or twenty times as much as the horse is worth, and after the buyer has got the animal home it dies of some latent disease inherent in its system at the time he bought it, he may claim the entire price he gave; the horse was by reason of the latent mischief worthless when he bought; but if it catches some disease and dies, the buyer cannot claim the entire value of the horse, which he is no longer in a condition to restore, but only the difference between the price he gave and the real value at the time he bought." Counsel for Citibank argued that Cockburn C.J. erred in saying that if the horse had some latent disease at the time of the transaction the buyer may claim the entire price he paid. He argued that in such a case there was no sufficient causal link between the latent disease and the eventual death of the horse. Counsel for Smith argued that the transaction, which was induced by deceit, directly led to the loss of the entire value of the horse. On any view it is clear that, if Cockburn C.J. is right, the law imposes liability in an action for deceit for some consequences that were unforeseen and unforeseeable when the tortfeasor committed the wrong. And if that is right it may tell us something about the correct disposal of the present case. Mr Prentis submitted that there is no evidence as to the true value of HGE at the date of the Agreement, and he is unquestionably correct. He submitted that the cause of the collapse of HGE was the failure of the Total Eclipse show, which led to an unsustainable loss of about £1 million. Mr Millett submitted that Halston's loss of all of its investment and loans was caused by the deceit which led it to enter into and to complete the Agreement. As a result of the true level of inter-company indebtedness, which was always a doubtful asset at best and was never in fact repaid, the company had an inadequate capital base, and could not withstand the loss suffered on the Total Eclipse. It is clear that until the Agreement was entered into, HGE had serious cash flow problems. Because of the losses suffered by other companies in the Group, its major asset (the inter-company indebtedness) was of dubious worth. It had cash shortages. Its need for an injection of capital appears from the audited accounts, and its dire need for money was graphically described by Mr Verrells in the passage of his evidence cited at paragraph 75 above. The result of the inter-company indebtedness having been allowed to go to £3.8 million was that the good assets of the company were that much less (because it had paid away the £1 million difference); or that it had £1 million more of good liabilities (which is why the amounts shown for VAT and advanced ticket sales were reduced in the spreadsheet). Not only was the company insolvent on a balance sheet basis if the inter-company indebtedness was not collectable; its access to cash was affected. This is consistent with events following completion, summarised above, and the subsequent audited accounts. Mr Levinson described the condition of HGE in late 1998 as follows: The company was struggling, we had had to put more money in to make things move along, and of course we had a £1 million hole there that we had not realised was there. There was potential for Harvey Goldsmith, but we just did not have enough capital in the company to be able to hold on and move things forward. So, in its present state, it had little value, other than the fact that Harvey Goldsmith in the past had been a substantial money earner as a company, and that one had a hope that there could be something in the future under a recapitalised position with more money coming into the company. (Transcript 13 December 2004 at page 164.) Mr Levinson referred to the company's need for further loans from its shareholders; I have referred to those loans at paragraph 39 above. Mr Goldsmith said that the financial position of the Allied Group had not improved between September 1998 and 1999 (14 December page 60). I refer to Mr Verrells's fax of 24 September 1998 and to Mr Goldsmith's evidence cited at paragraph 40 above. The deals with Tring and MMC were seen as ways of escaping from the cash flow problems of the company. An indication of the approximate sum of cash required for the company's business is to be found in the MMC Executive Summary (paragraph 53 above). Thus the cash flow problems of the company did not start in 1999: they were inherent in the financial position of the company at completion of the agreement and always thereafter until its collapse. If the company is likened to a horse, it was a horse that was ill on 18 September 1998. The Tring and the MMC deals put a value on HGE of some £7 million to £8 million. However, these transactions were never concluded. HGE was a private company. Halston could not simply sell its shares on the stock market. Any realistic purchaser would have to put up sufficient cash for to remedy the company's cash flow shortages. The market for the shares was manifestly limited. There is no evidence that Halston could have secured other purchasers for its shares, or that it acted unreasonably in relation to the transactions it sought to enter into. In practice, it was unable to realise its investment in HGE. So far as any duty to mitigate its loss is concerned, it could only arise once it knew of the Mr Simons's fraud, and although it may have had its suspicions, it could not have known that it had been deceived until Mr Verrells or Mrs Drummond had given their account of events, which was, as far as I am aware, after the collapse of the company. But in any event, there is no evidence that Halston could or should at any time have done more than it did. It is a nice question whether the size of the loss incurred on the Total Eclipse should be considered as a kind of novus actus, breaking the chain of causation. The amount of the loss on the show was about the same as the understatement of the inter-company indebtedness. Clearly, the company was less able to withstand the loss with the high level of inter-company indebtedness that it had at 18 September 1997 and thereafter. In my judgment, the collapse of the company, in the circumstances that occurred, was a risk that was substantially increased by the true level of inter-company indebtedness as against that it was represented to be. In my judgment, applying the principles enunciated in Smith New Court, Mr Simons is liable of all of Halston's loss, subject to its recoveries. This case is indistinguishable from Doyle v Olby (Ironmongers) Ltd. Determination Mr Simons is liable to Halston in deceit for its losses. I shall hear submissions from counsel on whether Halston's recoveries should go to reduce the amount of damages awarded or be taken into account only on execution.

MR JUSTICE STADLEN: This is an application for judicial review of a decision by the Secretary of State for the Home Department in a letter dated 6 May 2008 rejecting further representations submitted by the claimant on 20 August 2007 under Article 8 of the ECHR, and determining that the said representations did not constitute a fresh claim as defined by paragraph 353 of the Immigration Rules. The grounds of the application are, in essence, that the analysis by the Secretary of State of the claimant's solicitor's representations was inadequate and erroneous, and second, that on any rational view those representations made good a claim that would satisfy the test of being a fresh claim under paragraph 353, and in particular the test that they had a realistic prospect of success on an appeal to the Immigration Appeal Tribunal. The background can be summarised as follows. The claimant is a citizen of Turkey of Kurdish ethnicity, who was born on 20 February 1957. He left Turkey and arrived in the United Kingdom on 19 September 2003, and immediately claimed asylum on arrival. By a decision dated 30 October 2003, communicated by a letter dated 3 November 2003, the Secretary of State refused that application under paragraph 336 of the Immigration Rules. The claimant appealed to the adjudicator and his appeal was heard on 9 January 2004 and 26 March 2004. By a determination promulgated on 2 April 2004, the adjudicator dismissed the appeal. That appeal was an appeal based in essence on asylum grounds and Article 3 ECHR grounds, and was based on representations that the claimant would be subjected to persecution and ill-treatment upon return by reason of his ethnicity and his political involvement. In rejecting that appeal, the adjudicator, among other things, compared what had been said and the evidence adduced in support of the claim with what was said and the evidence adduced in a separate claim that had been made by the claimant's wife. She had come with their two children on 30 July 2001 to the United Kingdom without the claimant claiming asylum on arrival. That claim was refused on 29 August 2001 and the appeal dismissed on 6 September 2002. In her reasons for dismissing his appeal on 2 April 2004, the adjudicator said, among other things this: "The issue in this case is credibility and I do not find the core of the appellant's account credible. I accept he has given a detailed account. I also bear in mind that his wife has been through the appeal process and he may well have had access to documentary information. There are so many disparities between his account and that of his wife that I am left with little doubt that his account is untrue. I need to consider whether there is a real risk to the appellant returning to Turkey as a failed asylum seeker. I believe while there is a real risk to certain individuals returning to Turkey, the appellant is not one of them. That is because I do not believe he has been arrested as he claims." There is no reference in the adjudicator's reasons to any claim having been advanced under Article 8 of the ECHR. I was told that the claimant's current solicitors had made valiant efforts to try and track down, through the former solicitors who had been acting at that time, the representations advanced on behalf of the claimant to establish that they did not include Article 8 claims, but they have been unable to secure any information from those former solicitors. But I have no difficulty in inferring from the absence of any reference to an Article 8 claim in the adjudicator's reasons that no such claim was put forward, and indeed on this application it was accepted by Mr Coppel, on behalf of the Secretary of State, that I should proceed on the basis that no Article 8 claim had previously been considered on that appeal. There then were further representations made by previous solicitors on behalf of the claimant under Articles 3 and 8 of the ECHR dated 3 August 2004, which were refused in a decision letter dated 14 January 2005. Unfortunately the representations were not capable of being identified and placed before the court, but there was read to the court an extract from the decision letter of 14 January 2005, which suggested that the reference to Article 8 was a bare reference in a single sentence by the Secretary of State rejecting the representation based on Article 8. It therefore follows that, in considering the merits of this application today, it is reasonable to do so, and I did not apprehend Mr Coppel to take issue with this, on the assumption that, for the purposes of considering paragraph 353 of the Immigration Rules, the court should proceed on the basis that there is only one issue and not two issues; that is to say, that the submissions have not already been considered. This application is not resisted by the Secretary of State on the basis that the submissions made in December 2007 and rejected in May 2008 have previously been considered; the claim is resisted on the second limb of rule 353, namely that, taken together with the previously considered material, they do not create a realistic prospect of success, notwithstanding their rejection by the Secretary of State. On 18 May 2005, an ECAA business application was made on behalf of the claimant, but refused on 27 November 2006. Following receipt of further correspondence in support of his business interests in the United Kingdom, reconsideration was given to the application, but it was again refused on 10 August 2007. A second application was made on 19 December 2007 and refused on 6 May 2008. The Article 8 claim advanced on behalf of the claimant, which was rejected by the Secretary of State, was based on two limbs. It was asserted in the letter of 19 December 2007 that the claimant has established two businesses in the United Kingdom known as Mr Box UK Limited and Peterborough Food and Wine Centre. It was said that they are both doing well and employ between them five people, and that documents appended to the submissions demonstrated how well established the businesses were, and that they were profitable and well run. It was asserted that, given his central role in running the businesses, if the claimant were to be removed from the United Kingdom, that would inevitably lead to the businesses closing and his employees losing their jobs. It was said that there would also be a further loss to the local community and business community since both the claimant's businesses supplied local shops as there is a wholesale aspect to the businesses, and he had invested £40,000 and had continuing investment in the evolving businesses. The second limb relied on by the claimant was that he had two children aged at the time of the representations 16 and 18. The 18 year-old daughter was said to be a student at Greenwich University in her second year on a media studies course, having previously passed a foundation course at De Montfort University, the course fees being paid privately by the claimant, as was her maintenance. The 16 year-old, his son, was said to be studying for his GCSEs at college, and was presently said to be doing well on his courses and was hoping to go to university. At no time, it was said, had either the claimant or any member of his family been reliant on state funds -- indeed, just the opposite as he had contributed financially to the United Kingdom since his time here. The Secretary of State in her letter rejected those submissions, and also determined that they did not constitute a fresh claim within the meaning of paragraph 353 of the Immigration Rules. She said in paragraphs 8 and 9: "Some of the points raised in your submissions were considered when the earlier claim was determined. They were dealt with in the letter giving reasons for refusal on 14 January 2005. The remaining points raised in your submissions, taken together with the material previously considered in the letter, would not have created a realistic prospect of success." In relation to family life, the letter quoted from paragraph 20 of the judgment of the House of Lords in the well-known case of Huang v SSHD [2007] UKHL 11, which provided guidance in relation to applying the test of proportionality under Article 8: "In an article 8 case where this question is reached, the ultimate question for the appellate immigration authority is whether the refusal of leave to enter or remain, in circumstances where the life of the family cannot reasonably be expected to be enjoyed elsewhere, taking full account of all considerations weighing in favour of the refusal, prejudices the family life of the applicant in a manner sufficiently serious to amount to a breach of the fundamental right protected by article 8." Addressing the family life limb of the representations, the letter continued: "As neither your client nor his dependants have any valid status in the United Kingdom, they will be removed as a family unit. Consequently upon their return to Turkey there will be no breach of your client's human rights in relation to their family life." The letter then turned to the private life limb of the Article 8 claim, and dealt first with the business aspect and then with the education of the children aspect. In relation to the former, it was said that while during their time in the United Kingdom the claimant and his family might have established a private life, it was considered that any interference could be justified in the circumstances of his case, the state having the right to control the entry of non-nationals into its territory, and Article 8 not meaning that an individual can choose where he or she wishes to enjoy his or her private life. The point was then made that the first business, Mr Box UK Limited was formed on 18 August 2005, the second business being opened on 25 November 2006, by which stage he had no basis for staying in the United Kingdom, his appeal against the refusal of his asylum claim having been dismissed on 2 April 2004, and a later application for permission to appeal to the Tribunal having been dismissed on 29 June 2004. So it was said the claimant could have been in no doubt that his immigration status was precarious, and that consequently he might be required to leave the United Kingdom at any time. Further, he had never been given permission to work in the United Kingdom, or leave to enter permitting him to work here, and it was viewed that he had worked and taken on responsibilities in the full knowledge that he did not have a right to remain in the United Kingdom having entered and remained unlawfully. It was pointed out that it was now open to him to return to Turkey and make an application for the correct entry clearance to return as a businessman. In relation to the assertion in the representations to which the letter responded, that if the claimant were to be removed from the United Kingdom it would "inevitably lead to the businesses closing and his employees losing their jobs", it had been taken into consideration that the claimant was not the sole partner in either of the businesses. There were two other co-directors of Mr Box UK Limited, and three partners of Peterborough Food and Wine Centre. Reference was made to a letter of 9 March 2007 in which the claimant's former solicitors had stated: "Currently all four of the partners are involved in running [the latter business]." It was therefore said that it was not accepted that his business partners could not run the businesses in his absence from the United Kingdom while he sought to regularise his immigration status from abroad. The letter then turned to the claimant's children's education. As to that, the letter said: "16. ... no evidence has been provided to confirm that they are undertaking the above stated courses. Nonetheless, even if evidence were provided to this effect, it would not create a realistic prospect of success as, upon return to Turkey, it would be open to them to apply for entry clearance as students, thus enabling them, if their applications were successful, to resume their studies in the United Kingdom. As had been indicated previously in respect of your client's business interests, your client's children have sought to study in the United Kingdom, although it should be pointed out that no evidence that they are currently studying has been provided, at a time when they and their parents were fully aware that their immigration status was such that it may not be possible for them to continue with their studies in the United Kingdom ... 17. It has also been taken into consideration that upon their return to Turkey your client and his family can maintain ties with any contacts they may have in the United Kingdom by way of telephone calls, letters, e-mails, etc. 18. For these reasons it is considered that any interference with your clients' family life is necessary and proportionate to the wider interest of the maintenance of an effective immigration policy. 19. Furthermore, your client and his family should not benefit from their breach of immigration control. To allow them to remain here, thus circumventing the need for any entry clearance, would benefit them over those who comply with the law. 20. We do not consider that your further representations would demonstrate a realistic prospect that a Tribunal would find that your clients' removal would give rise to a disproportionate interference with their Article 8 rights. In the circumstances it is not considered that the prejudice to your clients' rights to a private life in the UK is sufficiently serious as to amount to a breach of their Article 8 rights." So far as the grounds of appeal are concerned in relation to the incorrect approach, the point made by Mr Collins on behalf of the claimant was that there was no evidence in the letter that the decision-maker was applying the correct test in the sense of considering, for the purposes of paragraph 353, not what his or her own views of the merits were, but rather whether there was a realistic prospect of success on an appeal to the IAT. In my view, that argument is not tenable. Paragraph 9 of the letter reads: "The remaining points raised in your submissions, taken together with the material previously considered in the letter, would not have created a realistic prospect of success." As to that, Mr Coppel submitted that the use of the conditional tense indicated that what was being contemplated there by the decision-maker was the decision of someone other than the writer. In my view, that is plainly right. Further, and in any event, in paragraph 20, which I have already set out, it is explicitly stated that the decision-maker did not consider that the further representations would demonstrate a realistic prospect that a Tribunal would find the claimant's removal would give rise to a disproportionate interference with his and his family's Article 8 rights. It is quite plain from that that the decision-maker was addressing not his or her own view of the merits of the claim, but rather the correct question of whether there was a realistic prospect that an IAT adjudicator might form a different view. The second ground of the claim was based on irrationality. In essence, it was said that no reasonable decision-maker could have come to the conclusion that either the private life or the family life limbs of the Article 8 claim did not have a realistic prospect of success, and that was put on the basis that it could not rationally be concluded that an IAT might not take the view that the proportionality test enshrined in Article 8(2) was satisfied. So far as the reliance on the private life was based on the businesses, it seems to me that this argument is not tenable. It is, as I pointed out in argument, much to the credit of the claimant that he has set up two successful businesses and has, so far from living off the public revenues, contributed, and also employed five employees together with four other business partners. Even if one leaves to one side the fact that both businesses were entered into at a time when it was plain, or should have been plain to the claimant, that his immigration status was precarious, at the heart of the claim in relation to proportionality, as it was advanced both in the written submissions and before me today, lay the proposition that, if the claimant were removed to Turkey, it was inevitable that the businesses would fail with the resultant loss of five jobs, although Mr Collins, in answer to a question from me, accepted that the effect of that, were that to be the case, on those five employees is not itself a ground on its own for allowing an Article 8 claim. He said, if you take it in the round, it is all part of the background to the private life that is established. The difficulty that it seems to me the claimant is faced with on that aspect of the claim is that the assertion that it was inevitable that the business would fail and have to close with a loss of five jobs if the claimant was removed to Turkey was just that -- an assertion. It was not supported by evidence which, taken on its own, or indeed taken together with anything else, would make it unreasonable not to conclude that there was a realistic prospect that an IAT might accept those arguments. Mr Collins submitted to me that the whole point about an IAT hearing is that that is where evidence is heard and can be tested. It seems to me that while it is of course the case that if the case does go to the IAT there is an opportunity to adduce evidence, that begs the critical prior question, which is whether there is an entitlement to have an appeal to the IAT, and that depends upon whether the test of a realistic prospect of success is satisfied, and that in turn must, in my view, depend upon the existence of evidence before the Secretary of State which no reasonable Secretary of State could fail to conclude or determine had a realistic prospect of being accepted on appeal. The difficulty the claimant faced on this aspect, in my view, was that Mr Collins was unable to point to any evidence that falls into that category. It was purely an assertion: these are businesses with together a total of five business partners, and although it is undoubtedly the case that there are businesses which depend wholly or in large part on one individual whose departure could have adverse effects on the business, there was no evidence to support a conclusion that that was the only rational conclusion on the evidence in this case. The next aspect was family life. So far as that is concerned, the Secretary of State's answer was, as I have indicated in the letter, that there was no evidence to support a submission that the family could not reasonably be expected to enjoy a family life in Turkey such that their family life would be prejudiced if his claim were to fail. The only respect in which such an argument, as it seemed to me on the arguments and evidence before the Secretary of State, could be advanced would be on the basis that, if one or other of the children applied to and were allowed to come back to the United Kingdom to pursue their studies, that would involve them living on their own without their parents and, in particular, as I raised the question in argument, it might involve a possibility of the 16 year-old son coming back on his own to pursue his GCSE studies in the United Kingdom. The difficulty with that argument is that it presupposed that there was any evidence that, if they were to return to Turkey, the children could not pursue equivalent studies in Turkey without any material prejudice or hardship. It was urged upon me by Mr Coppel that there are many cases -- indeed it might be thought to be most cases -- where an Article 8 claim is raised by an adult claimant where the effect of it being rejected is that children who are at school or university in this country would, as a consequence, have to leave their studies and go to another country. There is nothing to indicate that that fact in itself is sufficient to satisfy the very high threshold of disproportionality under Article 8(2). It is different, Mr Coppel says, or may be different, in a case where there is evidence that, for some reason or another, it is not possible for children to be educated in the country to which the claimant would be returned, either at all or at any rate with a reasonable equivalence to their studies in the United Kingdom, or where for some other peculiar reason or particular reason there is a connection between the child and his or her studies or school or college that is out of the ordinary. None of those features were able to prayed in aid evidentially in this case. Accordingly, in my judgment, Mr Collins was forced, on the family life aspect of the claim, to rely on nothing more than the mere fact that the children would be required to leave their education in the United Kingdom and pursue their studies in Turkey. In my judgment, it cannot be said, on the basis of that alone, that the Secretary of State was irrational in concluding that there was no realistic prospect of an IAT taking a view that those facts would satisfy the high test of disproportionality under Article 8. That does not conclude the matter because Mr Collins put the education of the children in a different way in the alternative, which was that they too had a private life and the private life involved their education in this country, and that by being deprived of that education, there was a realistic prospect that an IAT might take the view that, if they were to have to be deprived of that, there would be a breach of Article 8. Alternatively, that if the only way in which that could be avoided would be for them to come back on their own, that would separate them from their parents and leads to a breach of family life rights under Article 8. As it seemed to me that was the high point of the claimant's claim, and it was one to which I gave anxious consideration and explored closely in argument with both counsel. In paragraph 16 of the decision letter, what was said was even if evidence was provided that the children were undertaking the courses that were asserted, that would not create a realistic prospect of success because, upon return to Turkey, it would be open to them to apply for entry clearance as students, thus enabling them, if their applications were successful, to resume their studies in the United Kingdom. I asked Mr Coppel whether it was not implicit in that that the Secretary of State accepted that, unless they were able to come back and resume their studies here, there would be a breach of Article 8, and if that were right, could it not also be said on behalf of the claimant that, if the only way that they could avoid that breach of Article 8 would be by being separated by their parents, was there not a realistic prospect that an IAT might consider that that was a breach of the right to family life? Mr Coppel's answer to that was that, on a fair reading of that paragraph or that sentence, what the decision-maker was saying was that, even if there was evidence that the children were undergoing courses (and I should say that he accepted that I should make my decision on the basis that there was such evidence and subsequent evidence was put before the court), and even if, as to which there was no evidence, there was no equivalent opportunity for education in Turkey, then it would still be open for them to apply for entry clearance and come back as students here. In other words, there was implicit in that sentence a further assumption -- the Secretary of State in effect taking the argument at its most favourable to the claimant -- namely, an assumption that there would be no equivalent opportunity for reasonable education in Turkey. But the reality is that there was no evidence to that effect; nor indeed was that asserted in the submission letter of December 2007 or orally before me. That being so, it does not seem to me that it can be said that it was unreasonable for the Secretary of State to reject that aspect of the claim as well. As it seems to me, there is nothing evidentially to take this case out of the normal run of cases in which the effect of an adult Article 8 claimant having his claim rejected is that his children will be unable to continue their full-time studies in this country, and will have to resume them in the country of return. As I have indicated, in this case the claimant was unable to point to any evidence that that factor would lead to some prejudice by reason of the unavailability of any or any adequate or any equivalent education in that country of return such as to give rise to a breach of Article 8, or even an argument that no reasonable Secretary of State could reasonably take the view that an IAT might not consider there was a breach of Article 8. In those circumstances, it seems to me that the grounds of this application are not made out, and the application must fail. MR COPPEL: My Lord, in the circumstances I would ask for an order for costs in favour of the Secretary of State. I do not understand my learned friend's client is a beneficiary of a Legal Services certificate. MR COLLINS: Just the opposite; that was part of our claim, was it not? MR JUSTICE STADLEN: You cannot resist that? MR COLLINS: We do not resist that. MR JUSTICE STADLEN: Then I will order that the claimant should pay the defendant's costs of this application. MR COPPEL: I am grateful, my Lord. MR JUSTICE STADLEN: Thank you both very much indeed.

SECOND SECTION CASE OF PERİHAN AND MEZOPOTAMYA BASIN YAYIN A.Ş. v. TURKEY (Application no. 21377/03) JUDGMENT STRASBOURG 21 January 2014 FINAL 02/06/2014 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Perihan and Mezopotamya Basın Yayın A.Ş. v. Turkey, The European Court of Human Rights (Second Section), sitting as a Chamber composed of: Guido Raimondi, President,Işıl Karakaş,Peer Lorenzen,Dragoljub Popović,András Sajó,Paulo Pinto de Albuquerque,Helen Keller, judges,and Stanley Naismith, Section Registrar, Having deliberated in private on 17 December 2013, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 21377/03) 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 a Turkish national, Mr Zübeyir Perihan and by a Turkish company, Mezopotamya Basın Yayın A. Ş. (hereinafter referred to as “Mesopotamia Publishing”) on 23 May 2003. The applicants were represented by Mr M. İriz, a lawyer practising in Istanbul. The Turkish Government (“the Government”) were represented by their Agent. 2. On 23 November 2006 the application was communicated to the Government. THE FACTS I. THE CIRCUMSTANCES OF THE CASE 3. The first applicant was born in 1966 and lives in Istanbul. The second applicant is a joint-stock company incorporated in Turkey in 1991 and dissolved in 2001 (see below). The first applicant was appointed as Director General of Mesopotamia Publishing on 24 December 2001. A. Background to the case As regards the Şanlıurfa branch office 4. On 26 October 1997 Mesopotamia Publishing inaugurated a branch office in Şanlıurfa. On the same day, police officers from the Şanlıurfa Security Directorate conducted a search of that office, confiscating certain newspapers, magazines, books, cassettes and documents, which were allegedly illegal. 5. On 27 October 1997 the Deputy Governor of Şanlıurfa requested the Ministry of Industry and Trade to institute proceedings against Mesopotamia Publishing with a view to its dissolution. 6. On 30 October 1997 the public prosecutor instituted proceedings against Mr Murat Gökdağ, the manager of the Şanlıurfa branch office, and Ms Nuray Şen, the then Director General of Mesopotamia Publishing. They were accused of storing banned books at the branch office. 7. On 6 June 2000 the Şanlıurfa Magistrate’s Court held that the criminal proceedings should be discontinued since the prosecution was time-barred under Article 102 of the Criminal Code. As regards the Diyarbakır Branch Office 8. On 13, 14, 20, 25, 27 and 28 December 1997, the Diyarbakır office of Mesopotamia Publishing was searched by police officers. Various books and publications, including a calendar published by Mesopotamia Publishing, were confiscated. 9. On 14 January 1997 the Diyarbakır office was closed on the order of the Diyarbakır Governor. 10. On 10 February 1998 the Diyarbakır Governor requested the Ministry of Industry and Trade to institute proceedings against Mesopotamia Publishing with a view to its dissolution under the relevant provisions of the Commercial Code. 11. On an unspecified date criminal proceedings were instituted in the Istanbul State Security Court against members of Mesopotamia Publishing’s board of directors for publishing a calendar which was allegedly used to disseminate propaganda in favour of the illegal Kurdistan Workers’ Party (“the PKK”). 12. On 17 September 1999 the Istanbul State Security Court suspended the proceedings, pursuant to Law No. 4454 on the suspension of pending cases and penalties in media-related offences. As regards the Izmir branch office 13. On 26 December 1997 the Izmir office of Mesopotamia Publishing was searched by police officers. Certain publications, which were allegedly illegal, and a satellite decoder were seized. 14. On 30 December 1997 the Izmir Governor asked the Ministry of Industry and Trade to institute dissolution proceedings against Mesopotamia Publishing, alleging that the company had been disseminating propaganda in favour of the PKK. 15. On an unspecified date, criminal proceedings were instituted in the Izmir Magistrate’s Court against Ms Hatice Çoban, the manager of the Izmir branch. 16. On 14 May 1998 the court acquitted Ms Çoban of the charges against her. B. Dissolution proceedings against the applicant company 17. Following complaints lodged by the Şanlıurfa Governor and the Diyarbakır Governor respectively, on 24 February 1998 the Ministry of Industry and Trade (“the plaintiff”) instituted proceedings against Mesopotamia Publishing in the Istanbul Beyoğlu Commercial Court, with a view to its dissolution on account of its activities against public order. On 27 February 1998 the Istanbul Beyoğlu Commercial Court registered the case against Mesopotamia Publishing. It decided, inter alia, to notify the parties of the date of the hearing fixed for 3 April 1998, in accordance with Articles 509 and 510 of the Code of Civil Procedure, which provided a warning that if one of the parties failed to appear before it or to submit observations, the court would not be precluded from determining the merits of the case. It further decided to notify Mesopotamia Publishing of the plaintiff’s written submissions and evidence. 18. On 12 March 1998 the above documents were served on Mesopotamia Publishing, as recorded in the Trade Commercial Registry. They were picked up by a certain Mr M.B., who signed the notification record as an authorised representative (şirket yetkilisi). 19. In the meantime, the plaintiff submitted a number of pieces of evidence to the case file in support of its claim, including official documents, such as incident and seizure reports relating to the above‑mentioned searches. They were admitted to the case file on 17 March 1998. 20. At a hearing on 3 April 1998 the court noted the absence of Mesopotamia Publishing, but observed that the notification had been duly served. The evidence provided by the plaintiff was read out. The court decided to compile further information and documents regarding the accusations against Mesopotamia Publishing from the Şanlıurfa, Izmir and Diyarbakır public prosecutors’ offices. 21. The court held regular hearings. At the hearing held on 28 July 1999 the court decided to stay the proceedings pending the outcome of the cases before the criminal courts. 22. On 19 October 2001 the court decided to dissolve Mesopotamia Publishing, pursuant to Article 274 § 2 of the Commercial Code. In its decision, it noted that, despite due notification, the company had failed to attend the hearings and had not submitted any observations. It took into account the incidents which had taken place at the Şanlıurfa and Diyarbakır branch offices, and held that the company was responsible for them. It considered that the activities of those branches had breached public order and that therefore the company had to be dissolved. A liquidator was assigned. The decision of the court was served on Mesopotamia Publishing, as recorded in the Trade Commercial Registry. 23. On 28 March 2002 Mesopotamia Publishing appealed against the decision of the first-instance court. In its procedural grounds of appeal, it contended, inter alia, that the court had failed to duly notify it of the case because the notification had been served on a certain Mr M.B., who was not a member of the board of directors at that time. In addition, Mesopotamia Publishing argued that it had not been notified of the evidence admitted in the course of the proceedings. In its substantive grounds of appeal, it claimed that the court had decided on the basis of two incidents in connection with which the company had not been convicted. 24. At a hearing on 15 October 2002 the Court of Cassation, having heard the parties, decided to adjourn the deliberations. 25. On 17 October 2002 the Court of Cassation, having examined the case file, the parties’ submissions to it and the documents contained therein, dismissed Mesopotamia Publishing’s objections. 26. On 10 December 2002 Mesopotamia Publishing requested the Court of Cassation to rectify its judgment. It repeated its earlier submissions regarding what it described as “substantial grounds for appeal”. 27. On 24 January 2003 the Court of Cassation dismissed the above‑mentioned rectification request. II. RELEVANT DOMESTIC LAW 28. Under sections 12 and 13 of the Notification Act (Law no. 7201), in force at the material time, notification must be made to the authorised representatives of legal entities. If there is more than one authorised representative, only one of them need be notified. If persons who are authorised to receive the notification are not present at the office of the legal entity for any reason or are not available to receive the notice at that time, the notification must be served on the officer or employee who is present at the office of the legal entity. 29. Under Article 274 § 2 of the Commercial Code, in force at the material time, the Ministry of Industry and Trade could bring an action for the dissolution of any company proven to be responsible for acts and operations that were against law, public order and its articles of association, without prejudice to the provisions of private laws. THE LAW I. VICTIM STATUS OF THE FIRST APPLICANT 30. At the outset the Court notes that, in the instant case, the parties to the domestic proceedings were Mesopotamia Publishing and the Ministry of Industry and Trade. The first applicant, even though he became director general of the company on 24 December 2001, was not a party to those proceedings, and the contested decision concerned the applicant company rather than the first applicant as a private individual. In this connection, the Court further observes that, since both in the application form and the subsequent observations submitted to the Court the applicants’ complaints centred essentially on the dissolution of the company, the first applicant has not been shown to have been subjected to any separate or further interference with his rights (see, Kaya and Diri v. Turkey (dec.), no. 60813/00 and 61317/00, 11 December 2007). 31. In these circumstances, the Court considers that the first applicant cannot claim to be a victim of a violation of his rights under Article 34 of the Convention. 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. II. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION 32. The second applicant argued that it had been denied a fair hearing on account of the failure of the domestic courts to respect its rights of defence. In this connection, it maintained that it had not been duly informed about the case which had been brought against it, or about the evidence compiled in the case file. Thus it had been deprived of its right to submit evidence in its defence. The relevant part of Article 6 of the Convention reads as follows: “1. In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...” 33. The Government asked the Court to dismiss the above complaint as inadmissible for failure to comply with the requirement of exhaustion of domestic remedies, on the ground that no action for compensation had been brought against Mr M.B. for the damage he had allegedly caused to the company. 34. The Government maintained that the authorities had duly notified the second applicant of the case brought against it by serving notification on it, and that a person named Mr M.B., who was present and acting as a member of staff of the company, had picked it up. In this connection, they emphasised that it was the responsibility of the applicant company to keep control of who came to the office and received documents on its behalf. Moreover, they noted that, according to information on the internet, Mr M.B. had worked at the Mesopotamia Culture Centre, which was connected with the applicant company. The Government further considered that the applicant company could have been aware of the proceedings against it by examining the case files of the criminal proceedings, since there had been a considerable amount of correspondence between the courts during the collection of evidence. Lastly, they noted that the applicant company had had the right to submit evidence in its defence during the appeal procedure. 35. The second applicant maintained that, since it had not been notified of the case, all the procedures and hearings had been held in its absence. As a result, it claimed that it had been deprived of its right to defend itself by putting forward evidence and counter-arguments. In this connection, the applicants emphasised that Mr M.B. was neither the legal representative of the company nor a staff member. 36. The Court reiterates that applicants are not obliged to make use of remedies which do not provide redress for their complaints (see İhsan and Satun Önel v. Turkey, no. 9292/02, § 12, 21 September 2006). In the instant case it does not consider that an action for compensation would have remedied the second applicant’s complaints under Article 6 of the Convention. In view of the above, the Court rejects the Government’s objection. 37. However, the Court considers that the second applicant’s complaint under this head is inadmissible for the following reasons. As established in the Court’s case-law, Article 6 guarantees the right to adversarial proceedings. That right means in principle that the parties to a criminal or civil trial should have the opportunity to have knowledge of and comment on all evidence adduced or observations submitted (see Lobo Machado v. Portugal, judgment of 20 February 1996, Reports of Judgments and Decisions 1996-I, § 31). It includes the right not only to be present, but also to hear and follow the proceedings (see, inter alia, Ziliberberg v. Moldova, no. 61821/00, § 40, 1 February 2005). In this connection, the Court considers that the right to a public hearing would be devoid of substance if a party to the case were not apprised of the hearing in such a way as to have an opportunity to attend it, should he or she decide to exercise the right to appear established in the domestic law (see Yakovlev v. Russia, no. 72701/01, § 22, 15 March 2005). 38. In the instant case, the Court observes that the documents regarding the plaintiff’s request, the evidence submitted by it and the date of the hearing were served on the second applicant at its address, as recorded in the Trade Commercial Registry. This matter is not in dispute. However, the applicants claimed that the person on whom the documents had been served, namely Mr M.B., was neither a member of the board of directors nor an employee of the applicant company. In the absence of any relevant documents, the Court cannot speculate as to whether such a person had ever worked for the company. Even assuming that such a person did not work for the company, the Court finds that, in the circumstances of the present case, the authorities cannot be held solely responsible, since there was obviously a failure on the part of the applicant company to take appropriate measures to ensure effective receipt of any correspondence sent to it by the domestic courts at the address indicated by it. 39. Moreover, the Court takes into account that Article 6 does not provide for specific forms of service of documents (see, for example, Weber v. Germany (dec.), no. 30203/03, 2 October 2007). Although it would have been another opportunity to inform the second applicant of the proceedings against it, the Court does not find any arbitrariness in the non-communication of the documents submitted to the case file by the plaintiff on 17 March 1998, since no such obligation is prescribed by the Civil Procedure Code, as applied to cases examined under the simple procedure followed in the present case. 40. Lastly, the Court reiterates that when determining whether Article 6 of the Convention has been complied with, it must take account of the proceedings as a whole, including the appeal procedures. In this connection, the Court observes that the second applicant was able to appeal against the first‑instance court judgment and was able to put forward its arguments at a hearing before the Court of Cassation, which had the competence to review the case, particularly from a procedural point of view. In view of the above considerations, the Court considers that the second applicant had an adequate opportunity to advance its defence before the Court of Cassation. Moreover, the Court cannot ignore the fact that the second applicant merely argued before the Court of Cassation that Mr M.B. was not a member of the board of directors, in support of its claim that it had not been duly notified of the case before the first-instance court. There is no requirement under domestic law for notification to be served solely on members of the board of directors. The second applicant submitted no other arguments or documents to demonstrate that its complaint under this head was not manifestly devoid of merit. Nor did it pursue its complaint when it requested the Court of Cassation to rectify its previous judgment. 41. In these circumstances the Court cannot find that the second applicant was denied a fair hearing. It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention. III. ALLEGED VIOLATION OF ARTICLES 10 AND 11 OF THE CONVENTION 42. The second applicant submitted that its dissolution by a court decision had infringed its right to freedom of expression and of association, in breach of Articles 10 and 11 of the Convention. 43. The Court considers that these complaints should be examined from the standpoint of Article 10 alone, which provides: “1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers... 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of ...territorial integrity or public safety, for the prevention of disorder or crime...” A. Admissibility 44. The Government asked the Court to dismiss this part of the application as inadmissible for failure to comply with the requirement of exhaustion of domestic remedies, on the ground that the second applicant had failed to raise, even in substance, its right under Article 10 of the Convention before the domestic courts. 45. The second applicant submitted that since it had not been duly informed of the hearings before the Istanbul Beyoğlu Commercial Court, it had not had the opportunity to invoke its rights under Article 10. 46. The Court reiterates that, while in the context of machinery for the protection of human rights, the rule of exhaustion of domestic remedies must be applied with some degree of flexibility and without excessive formalism, it does not require merely that applications should be made to the appropriate domestic courts and that use should be made of remedies designed to challenge impugned decisions which allegedly violate a Convention right. It normally requires also that the complaints intended to be made subsequently at the international level should have been aired before those same courts, at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law (see, among many other authorities, Fressoz and Roire v. France [GC], no. 29183/95, § 37, ECHR 1999-I). 47. The object of the rule on exhaustion of domestic remedies is to allow the national authorities (primarily the judicial authorities) to address an allegation of violation of a Convention right and, where appropriate, to afford redress before that allegation is submitted to the Court (see Kudła v. Poland [GC], no. 30210/96, § 152, ECHR 2000-XI). Insofar as there exists at national level a remedy enabling the national courts to address, at least in substance, the argument that a Convention right has been violated, it is that remedy which should be used. If the complaint presented before the Court has not been put, either explicitly or in substance, to the national courts when it could have been raised in the exercise of a remedy available to the applicant, the national legal order has been denied the opportunity to address the Convention issue which the rule on exhaustion of domestic remedies is intended to give it. It is not sufficient that the applicant may have, unsuccessfully, exercised another remedy which could have overturned the impugned measure on other grounds not connected with the complaint of violation of the Convention right. It is the Convention complaint which must have been aired at national level for there to have been exhaustion of “effective remedies”. It would be contrary to the subsidiary character of the Convention machinery if an applicant, ignoring a possible Convention argument, could rely on some other ground before the national authorities for challenging an impugned measure, but then lodge an application before the Court on the basis of the Convention argument (see Azinas v. Cyprus [GC], no. 56679/00, § 38, ECHR 2004-III). 48. In the present case, the Court notes that the second applicant is a publishing company and the domestic courts ordered its dissolution based on the alleged illegal activities of two of its branch offices. The Court observes from the case file that during the searches, conducted in the Diyarbakır and Şanlıurfa offices, certain newspapers, books, magazines, cassettes, documents and a calendar published by Mesopotamia Publishing had been confiscated. It further notes that in its pleading before the Court of Cassation, the second applicant stated that none of the investigations had resulted in criminal convictions. 49. In these circumstances, the Court holds that freedom of expression was in issue, if only implicitly, before the Court of Cassation and the second applicant’s complaint raised under Article 10 was thus at least in substance raised before the appeal court. The Court refers to paragraph 23 above, and recalls once again that in its appeal petition, the second applicant claimed that the first instance court’s decision had been delivered on the basis of two incidents as a result of which the company had not been convicted. In the Court’s view, the Government’s objection of failure to exhaust domestic remedies must therefore be dismissed (see Fressoz and Roire, cited above, §§ 37–39). 50. The Court notes that this part of the application 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 51. The Court observes in the first place that the second applicant was a publishing company. Consequently, its dissolution by a court order, based on the alleged illegal activities of its two branch offices, undeniably constituted an interference with its rights under Article 10 of the Convention. Such interference will infringe the Convention if it does not meet the requirements of paragraph 2 of Article 10. The Court must therefore determine whether the interference was “prescribed by law”, pursued one or more of the legitimate aims set out in that paragraph and was “necessary in a democratic society” to achieve those aims. 1. Whether it was prescribed by law and pursued a legitimate aim 52. The Court notes that the impugned measure was based on Article 247 § 2 of the Commercial Code and pursued the legitimate aim of protecting national security and preventing disorder and crime. It therefore remains to be determined whether the interference complained of was “necessary in a democratic society”. 2. Whether it was necessary in a democratic society 53. The Court has frequently held that “necessary” implies the existence of a “pressing social need” and that the Contracting States have a margin of appreciation in assessing whether such a need exists, but that this goes hand in hand with European supervision (see Zana v. Turkey, 25 November 1997, § 51, Reports 1997‑VII). In exercising its supervisory jurisdiction, the Court must look at the impugned interference in the light of the case as a whole. In particular, it must determine whether the interference in question was “proportionate to the legitimate aims pursued” and whether the reasons adduced by the national authorities to justify it are “relevant and sufficient” (see Fressoz and Roire, cited above, § 45). 54. In the instant case, in its very brief decision, the Istanbul Beyoğlu Commercial Court held that Mesopotamia Publishing was responsible for the allegedly illegal activities of its two branch offices, namely the Şanlıurfa and Diyarbakır branches, and ordered its dissolution for breaching public order. Nevertheless, in the present case, the Court is unable to glean from the decision of the Commercial Court how and why the applicant company had breached public order. It notes in this connection that criminal proceedings had been initiated against these two branch offices. It further observes that during a search conducted in the Şanlıurfa branch office, the police had confiscated certain newspapers, books, cassettes and documents which were allegedly illegal. However, the subsequent criminal proceedings, which had been initiated for storing banned books, had been discontinued since the prosecution had become time-barred pursuant to Article 102 of the Criminal Code. Furthermore, various books and publications, including a calendar prepared by Mesopotamia Publishing, had been confiscated from the Diyarbakır branch office; nevertheless, similarly, the ensuing criminal proceedings, which had been instituted against the Diyarbakır branch office, for disseminating propaganda of an illegal organisation, had been suspended pursuant to Law no. 4454. As a result, no criminal convictions had been delivered in respect of Mesopotamia Publishing. At this point the Court recalls that under Turkish law, civil courts are not bound by the conclusions of criminal courts. However, as stated above, the brief reasoning of the Commercial Court cannot be regarded as sufficient and relevant justification for the interference with Mesopotamia Publishing’s right to freedom of expression. 55. Having regard to the fact that the second applicant has not been shown to have been engaged in activities breaching public order, and taking into account particularly the severe consequences of the dissolution order for a publishing company, the Court concludes that the interference in question was not proportionate to the legitimate aim pursued and could not be regarded as necessary in a democratic society. 56. There has therefore been a violation of Article 10 of the Convention. IV. OTHER ALLEGED VIOLATIONS OF THE CONVENTION 57. The second applicant further claimed under Articles 6, 14 and 18 of the Convention that the proceedings conducted by the Istanbul Beyoğlu Commercial Court had not been independent and impartial, and that the national courts’ decisions had not been reasoned and that they had taken into account prosecutions which had not resulted in criminal convictions. Thus the dissolution of Mesopotamia Publishing had not been justified. The dissolution decision had been made because the company had supported Kurdish rights, and the restrictions on its rights and freedoms had been applied for purposes which were not permitted under the Convention. 58. However, in the light of all the material in its possession, the Court finds that the second applicant’s submissions do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be declared inadmissible as manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention. V. APPLICATION OF ARTICLE 41 OF THE CONVENTION 59. The second applicant requested to be awarded non-pecuniary damage and legal fees but left the amounts to the discretion of the Court. 60. As regards non-pecuniary damage, the Court considers that the applicant company must have sustained some non-pecuniary damage. Accordingly, ruling on an equitable basis, it awards the second applicant 5,000 euros (EUR) in respect of non-pecuniary damage. 61. As regards the costs and expenses, 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 have been actually and necessarily incurred and are reasonable as to quantum. In the present case, the Court notes that the applicant failed to submit any supporting documents. The Court therefore does not award any sum under this head. 62. 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 1. Declares, by a majority, the complaint concerning Article 10 admissible in respect of the second applicant; 2. Declares, unanimously, the remainder of the application inadmissible; 3. Holds, by four votes to three, that there has been a violation of Article 10 of the Convention in respect of the second applicant; 4. Holds, by four votes to three, (a) that the respondent State is to pay the second applicant, within three months of the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage, to be converted into the currency of the respondent State 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; 5. Dismisses, unanimously, the remainder of the second applicant’s claim for just satisfaction. Done in English, and notified in writing on 21 January 2014, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Stanley NaismithGuido RaimondiRegistrarPresident In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the separate opinion of Judges Raimondi, Karakaş and Lorenzen is annexed to this judgment. G.R.A.S.H.N. DISSENTING OPINION OF JUDGES RAIMONDI, KARAKAŞ AND LORENZEN We do not agree with the majority that the complaint concerning Article 10 is admissible and that there has been a violation of that Article. According to our case-law, the rule of exhaustion of domestic remedies must be applied with some degree of flexibility and without excessive formalism. It normally requires that the complaints intended to be made subsequently at the international level should have been aired before the domestic courts at least in substance, and in compliance with the formal requirements and time-limits laid down in domestic law (see, for example, Fressoz and Roire v. France [GC], no. 29183/95, § 37, ECHR 1999-I). In the instant case the second applicant did not at any time submit, rely on or raise any arguments in respect of its freedom of expression. It maintained, in its observations dated 24 March 2010, that since it had not been duly informed about the proceedings before the first-instance court, it had been prevented from asserting its rights under Article 10 of the Convention. However, it was able to appeal against the first‑instance judgment and submit both procedural and substantive grounds of appeal to the Court of Cassation. We note that the second applicant did not rely on Article 10 of the Convention or the corresponding provision of the Turkish Constitution. Nor did it complain in substance that its dissolution had infringed its rights because the activities on which the first-instance court had relied in order to dissolve the company fell within the scope of its freedom of expression. The second applicant’s defence was confined at all times to the argument that the incidents on which the first‑instance court relied had never resulted in criminal convictions and that therefore they could not form the basis of a decision to dissolve it for breach of public order. We think that the second applicant did not provide the national courts with the opportunity which is in principle intended to be afforded to a Contracting State by Article 35 of the Convention, namely the opportunity of addressing, and thereby preventing or putting right, the particular Convention violation alleged against it (see, for example Lazerevic v. Croatia (dec.), no. 61435/08, 30 September 2010, and Çakar v. Turkey, no. 42741/98, §§ 30-33, 23 October 2003). In our view, the second applicant failed to exhaust the available domestic remedies and the application must be rejected as inadmissible in accordance with Article 35 of the Convention. Accordingly, there has been no violation of Article 10 of the Convention.

FIFTH SECTION CASE OF I.S. v. GERMANY (Application no. 31021/08) JUDGMENT STRASBOURG 5 June 2014 FINAL 13/10/2014 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of I.S. v. Germany, The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of: Mark Villiger, President,Angelika Nußberger,Boštjan M. Zupančič,Ann Power-Forde,Ganna Yudkivska,Helena Jäderblom,Aleš Pejchal, judges,and Claudia Westerdiek, Section Registrar, Having deliberated in private on 6 May 2014, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 31021/08) against the Federal Republic of Germany lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a German national, Ms I.S. (“the applicant”), on 19 June 2008. The President of the Section acceded to the applicant’s request not to have her name disclosed (Rule 47 § 3 of the Rules of Court). 2. The applicant was represented by Mr G. Rixe, a lawyer practising in Bielefeld. The German Government (“the Government”) were represented by their Agent, Ms K. Behr, Regierungsdirektorin, of the Federal Ministry of Justice. 3. The applicant alleged that the decisions of the German courts violated her rights to respect for her family life and private life under Article 8 of the Convention. Although she had placed her newborn twin children for adoption she was promised a “half-open” adoption with contact with and information about the children. This had not been respected by the German courts. 4. On 9 January 2012 the application was communicated to the Government. On 20 June 2012 the applicant informed the Court that she did not wish further to pursue her complaint under Article 6 of the Convention. THE FACTS 5. The applicant, Ms I. S., was born in 1962 and lives in Bielefeld. I. THE CIRCUMSTANCES OF THE CASE A. Background to the case 6. The applicant married in 1986 and had two children. In 1991 and 1992 she suffered miscarriages and a stillbirth, which caused her a long lasting psychological trauma. 7. In summer 1999 she became pregnant with twins after an extramarital affair. The natural father insisted on an abortion, as did the husband of the applicant. Both men threatened to leave her. 8. In November 1999 the husband of the applicant moved out and threatened to stop paying maintenance for his two sons and to the applicant. He put further pressure on her by threatening to break off all contact with his sons if she sued for maintenance. Instead, he offered to move back in with the applicant if she gave away the “illegitimate” children. The applicant’s sister and her mother refused to support her. The applicant felt extremely guilty for having destroyed the family situation for her two sons, yet she was determined not to have an abortion. 9. On 19 April 2000 the twin sisters, S. and M., were born prematurely. The applicant and the newborn children had to remain in hospital, where until 7 May 2000 the applicant cared for the children. The applicant did not specify the identity of the natural father of the twins. B. The adoption proceedings 10. The applicant made initial contact with the Bielefeld Youth Office during her pregnancy. She allegedly initially thought about having the twins placed in foster care, due to her difficult family and financial situation. The Bielefeld Youth Office – according to the applicant – instead suggested adoption as the applicant herself or her husband would have to pay for the foster care. 11. From January until October 2000 the applicant received psychological treatment on the advice of her gynaecologist. According to her psychoanalyst the applicant was depressed, had suicidal tendencies, and suffered from anxiety, panic attacks and extreme feelings of guilt as well as a sleeping disorder. The applicant felt overwhelmed by the situation and the decisions to be taken. The potential adoption was a topic of discussion during the treatment. 12. As the applicant could not take the newborn children home she consented to having them placed in provisional care with a view to later adoption. In this way she hoped to avoid too many changes of the children’s primary carers. She was allegedly told that if placed in foster care the newborns would first be given to an emergency foster family for six months before being handed over to a long-term foster family. 13. From 8 May 2000 onwards a staff member from the Bielefeld Youth Office advised the applicant to stop visiting the children if she really intended to give them up for adoption. 14. On 19 May 2000 the children were handed over to the couple who later became their adoptive parents. 15. In summer 2000 the applicant personally met the future adoptive parents of the twin sisters. The applicant was allegedly so upset that she burst into tears and had to cut the visit short. 16. On 1 September 2000 it was legally acknowledged that the husband of the applicant was not the father of the twin sisters by judgment of the Bielefeld District Court (no. 34 F 1306/00). The applicant began to work full time in order to support herself and her two sons. 17. On 9 November 2000 the applicant formally consented to the adoption of the children in a deed before the civil law notary, D.R., in Bielefeld. The declaration reads as follows: “I hereby give consent for my children, S. and M., born 19.04.2000 in Bielefeld, to be adopted by the married couple identified under no. [...] on the list of the Bielefeld City Youth Office. I declare this for the use of the competent family court. I am aware that this declaration cannot be revoked. I have been instructed by the civil law notary as to the legal consequences of the adoption, in particular the fact that all kinship of the children and their children to me and my relatives will cease as will all duties and rights that follow from kinship. Although I do not know the names of the future parents of my children I trust that the Bielefeld City Youth Office has made a proper choice regarding the parents and respected the interests of the children. In case the family court wishes to inform me about the beginning or the end of care, the beginning or the end of guardianship regarding my children or about the granting of adoption, I hereby empower the Bielefeld City Youth Office to receive that information for me.” 18. As the identity of the natural father of the children remained unknown, he could not consent to or object to the adoption. 19. After the declaration of consent had been made, the applicant, the prospective adoptive parents and the twin infants met again in person. On 25 November 2000 an oral agreement was reached between the prospective adoptive parents and the applicant at a meeting at Stormarn District Social Services in the presence of a staff member. It was considered that the adoptive parents would send a short report together with photographs of the children to the applicant once a year through the Bielefeld Youth Office. Whether this agreement laid down any rules regarding regular meetings between the children and the applicant is disputed. A personal meeting in summer 2001 was considered, but did not take place. 20. On 1 February 2001 the future adoptive parents declared in a deed before a civil law notary that they wished to adopt the twin sisters S. and M. 21. In March 2001 the District Administrator (Landrat) of Stormarn District, Department of Social Services and Adoption gave an expert opinion on the development of the children in the care of the prospective adoptive parents. 22. On 21 June 2001 the guardianship division of the Reinbek District Court (proceedings no. 2 XVI 1/01) held a hearing with the prospective adoptive parents in the presence of the twins. The record of the hearing reads: “It was debated how the children have been getting on in the family. Particular attention was paid to addressing anxieties resulting from the fact that the natural mother is obviously having enormous difficulties coping on a psychological level with the fact that she has given away her children. There are signs, given that a half-open adoption was agreed on, which lead to the conclusion that the mother seeks contact with the twins. However, the arrangement involving the staff of the Youth Office and the natural mother remains valid, namely, that photographs of the children are to be sent annually to the natural mother. The children will also be told early on that they were adopted.” 23. On the same day the Reinbek District Court concluded the adoption of S. and M. and declared them the legitimate children of the adoptive parents. The family and the given names of the children were changed accordingly. C. Proceedings to declare the applicant’s consent to adoption void 24. On 11 April 2002 the applicant commenced proceedings before the Bielefeld District Court in order to declare her consent to the adoption void. The court transferred the case to the competent Reinbek District Court (no. 2 XVI 6/02). The applicant argued that the adoption was void because the father of the child had not consented to the adoption. She further argued that at the time of giving her consent she had been either in a temporary or in a pathological state of mental disturbance, which had prevented the free exercise of her will. She had not been aware of what she had been doing. She argued – referring to medical evidence – that she had been suffering from an “aggravated reactive form of depression with acute risk of suicide” since 1992, when she had been traumatised by the stillbirth. 25. The guardian ad litem of the children argued that a revocation of the adoption would be against the best interests of the children, as since their birth they had been almost continuously in the care of the adoptive parents who had established a very good parental relationship with them. 26. In reaction to the arguments of the guardian ad litem the applicant partly withdrew her application with regard to custody rights and made clear that her aim was no longer to integrate the children into her own family. She acknowledged that the children were well cared for and fully settled in the adoptive family. She underlined that her aim was to regain kinship in order to have a right to contact with the children. In her view her vulnerable situation at the time of the birth had been exploited by the Bielefeld Youth Office; she now felt that she had been unduly influenced to put the children up for adoption. 27. The Reinbek District Court procured a psychiatric opinion on whether the applicant had been temporarily legally incapable of acting at the time of consenting to the adoption. The expert contacted the applicant, her psychoanalyst at the time and her long-term gynaecologist. According to the psychiatric expert the applicant had been in a situation of extreme conflict from the time she had become aware of her pregnancy. This had aggravated the depression she was already suffering from due to the accidental stillbirth in 1992. He put the applicant’s decision to put the twin sisters up for adoption down to her desire to “get her husband back”. He diagnosed a certain weakness in the applicant’s personality and a dependency on male authority. However, he could not diagnose any past or present psychotic illnesses and therefore concluded that although she had been suffering from a deep inner conflict at the time of consenting to the adoption, the applicant had been legally capable of making a decision on her own. 28. On 4 June 2003 the court heard the applicant, who explained how, in her view, the Bielefeld Youth Office had unduly used her wish to see her children in the summer of 2000 in order to pressurise her into signing the adoption declaration. 29. In a decision of 10 June 2003 the Reinbek District Court dismissed the applicant’s claim. It acknowledged the situation of extreme conflict the applicant had been in at the time of consenting to the adoption and the psychological implications of that. It stated that solutions other than putting the children up for adoption might have been available to resolve the applicant’s personal crisis. In line with the expert opinion, however, the court held that the applicant had still been capable of making decisions. Furthermore, the court stated that the applicant had no legal standing to rely on the lack of consent of the children’s father to the adoption. 30. Since the applicant did not appeal against the decision, it became final. D. The proceedings concerning contact and/or information rights of the applicant 1. Proceedings before Reinbek District Court 31. On 14 November 2002 the applicant filed proceedings (no. 1 F 32/02) for contact with the children and the right to receive information about them at the Reinbek District Court. She argued that she had been promised meetings with the children every six months and letters and photos of them. A meeting with the children in June 2001 had been scheduled according to the agreement, but did not take place because the responsible member of Bielefeld Youth Office was on extended leave. No other member of the Youth Office had replaced the absent staff member. In September 2001 the applicant received photos of the children. When she mentioned that she was thinking about revoking her consent to the adoption, staff of the Bielefeld Youth Office threatened to stop her contact with the children. A letter that the applicant wrote to the adoptive parents and handed over to the Bielefeld Youth Office was returned with the remark that the applicant should seek psychological treatment. The applicant based her claim for contact on Article 1666 and additionally on Article 1685 § 2 of the Civil Code (see “Relevant domestic law” below). Her claim for the right to receive information about the children was based on Article 1686 of the Civil Code. 32. On 2 July 2003 the adoptive parents were heard. They opposed the claim of the applicant and asked for it to be dismissed. They referred to the legal basis of adoption under the Civil Code, which only provided for anonymous adoption. According to the hearing record the adoptive parents declared that they still intended to inform the children about the adoption before they started primary school. They had planned to see the mother of the children together with the children in spring 2001. This meeting had been set up for the sole benefit of the applicant, as the children would not have benefited from it. They had had the intention of sending letters to the applicant with information about the children. Now, in view of the court proceedings, they felt insecure and preferred to wait for the court decisions. 33. In a decision of 21 July 2003 the Reinbek District Court dismissed the applicant’s request for contact with the children. According to the court Article 1684 of the Civil Code was not applicable to the applicant’s case as she had lost her legal status as a parent as a result of the adoption. An analogous application of the Article was, according to a decision of the Federal Constitutional Court of 9 April 2003 (no. 1 BvR 1493/96), not possible. Article 1685 of the Civil Code was applicable, but would not grant contact rights to the applicant as she did not fulfil the legal requirements. The applicant could not be considered as a person who had cared for the children for an extended period of time. In fact, she had only cared for them for two weeks. Even if the criteria of the Federal Constitutional Court in the above-mentioned decision – whether there was a social and family relationship – were applied, the applicant could not be granted contact, as she had not created a significant social and family relationship with the children. The time of pregnancy and the two weeks after the birth did not suffice. The Civil Code grants to the adoptive parents the sole right to establish, grant or deny contact with the children even in respect of the natural mother. Furthermore, the court argued that the children, who were only three years old, might be overwhelmed by the fact that they had two mothers. 34. On 28 July 2003 the court also dismissed the applicant’s claim in regard to the right to receive information about the children. Article 1686 of the Civil Code was not applicable, as the applicant was not a parent any more. Insofar as Article 1686 might be construed more widely, it would not apply to the applicant as her case did not fall under the scope of Article 1685 of the Civil Code. 2. Proceedings before the Schleswig Court of Appeal 35. On 11 August 2003 the applicant filed an appeal with the Schleswig Court of Appeal. She mainly complained that the Reinbek District Court had neither decided on Article 1666 of the Civil Code as a potential basis of her claim nor on whether a contractual agreement existed; furthermore, her petition for an expert opinion on the children’s best interests had been ignored. She further argued that the criteria of a “long duration”, when applied to parent-child relationships, had to be interpreted from the perspective of the child, whose concept of time differed from that of adults. The natural mother was always a “relevant person” in the sense of Article 1685 of the Civil Code, and this evaluation did not change even after the natural mother ceased to have legal responsibilities. Regarding the right to information, she argued that although she had consented to the adoption, she remained the natural mother and the constitutional protection of the family applied to her. Even the Federal Constitutional Court had acknowledged that during pregnancy a psycho-social relationship between mother and the foetus was established (judgment of 29 January 2003 – 1 BvL 20/99 and 1 BvR 933/01). Lastly, she complained about the length of the proceedings. 36. On 22 October 2003 the applicant was granted legal aid. 37. On 30 January 2004 the Schleswig Court of Appeal (10 UF 199/03 and 10 UF 222/03) dismissed the applicant’s appeal against the decisions of the Reinbek District Court of 21 and 28 July 2003. Two hearings, one on 15 December 2003 and the other on 30 January 2004, had taken place. Regarding the length of the proceedings before the district court, the Schleswig Court of Appeal found that that court had dealt adequately with the complex case within seven and a half months. Concerning the contact rights of the applicant, the court found that only Article 1685 Civil Code was applicable. Although the applicant was the children’s natural mother, she did not belong to the circle of people who had lived in “domestic community” with the child for a long period of time. According to the court, only foster parents are covered by this terminology. Furthermore, in order to determine “a long period of time” one had to establish whether a child had come to accept that his or her “relevant surroundings” (Bezugswelt) were with the individual in question. In the present case, the time of pregnancy was irrelevant, as an unborn child does not have a concept of its surroundings. Article 1685 Civil Code was in line with the constitutional protection of the family. The natural mother ceased to have contact or custody rights at the moment of adoption. The legal provisions regarding adoption were aimed at the undisturbed development of the child, and they served the best interests of the adopted child, who had to be fully integrated into the adoptive family; the biological family became irrelevant in accordance with the law. Even if the criteria of the judgment of the Federal Constitutional Court of 9 April 2003 regarding the natural father of a child born out of wedlock were applied, the natural mother would have to have lived with the children for a considerable time, which was not the case here. As the applicant knew, the right to contact on the basis of a contractual agreement could not be enforced by the family courts, as they were not empowered to regulate such matters. Article 1666 of the Civil Code did not give grounds for a different solution. 38. Having considered the claim for the right to receive information about the children under Article 1686 of the Civil Code, the court found that the applicant had ceased to be a parent at the moment of adoption. As the legal basis was unambiguous and the circle of people who had a right to such information was strictly limited to the parents, the court found no room for a different interpretation. 3. Proceedings before the Federal Constitutional Court 39. On 8 March 2004 the applicant raised a constitutional complaint regarding the denial of her rights to receive information about and have contact with the twin sisters after their adoption. 40. In a decision of 13 December 2007, served on the applicant’s representative on 19 December 2007, a panel of three constitutional judges refused to admit the constitutional complaint. E. Other developments and proceedings 41. The applicant also commenced proceedings in June 2003 concerning the appointment of a guardian ad litem for the twin sisters, in order for the children to be able to raise a constitutional complaint against the adoption decision of the guardianship division of the Reinbek District Court of 21 June 2001 (no. 2 XVI 1/01). These proceedings are the issue of another complaint before this Court (application no. 30296/08). 42. The applicant divorced her husband and is now remarried. She had a child with her new husband in 2003. 43. By letter of 16 December 2011 this Court informed the applicant that on 3 December 2011 the Law on a remedy against lengthy court proceedings and criminal investigations (Federal Law Gazette Part I, 2011, page 2302 et seq.) had come into force in the Federal Republic of Germany. II. RELEVANT DOMESTIC LAW A. Article 6 § 1 and 2 of the Basic Law “(1) Marriage and the family shall enjoy the special protection of the State. (2) The care and upbringing of children is the natural right of parents and a duty primarily incumbent upon them. The State shall watch over them in the performance of this duty.” B. Relevant provisions of the Civil Code 1. Parental custody, principles 44. Article 1626 provides that parents have the duty and the right to care for their minor children (parental care). Parental custody encompasses both care for the person and for the property of the children. 45. By judgment given on 29 January 2003 (1 BvL 20/99, 1 BvR 933/01) the Federal Constitutional Court accepted the legislator’s decision originally to grant parental authority over children born out of wedlock to the mother. The Federal Constitutional Court considered that, quite apart from the biological bond, mother and child developed a relationship during pregnancy which was continued after birth. 2. Provisions on adoption 46. Article 1747 stipulates that the consent of the parents is necessary for the adoption of a child. Consent may not be given until the child is eight weeks old. It is effective even if the person who gives consent does not know the adoptive parents, who have already been chosen. 47. Article 1750 provides that the consent must be declared to the family court and recorded by a notary. The consent becomes effective on the date it is received by the family court. It may not be given subject to a condition or a stipulation as to time. It is irrevocable. 48. Pursuant to Article 1751 § 1, after the consent of one parent to adoption the parental custody of this parent is suspended and the right to have personal contact with the child may not be exercised. 49. Pursuant to Article 1754, insofar as it is relevant to this case, adoption has the effect that the adopted child attains the legal status of the child of the adoptive parents. Parental custody is held by the adoptive parents jointly. Article 1755 provides that when the adoption takes effect, the relationship of the child and its descendants to its previous relatives and the rights and duties arising from this are extinguished. 50. Article 1758 § 1 provides that facts pertaining to the adoption and its circumstances may not be revealed or inquired into without the approval of the adoptive parent and of the child, unless special reasons of public interest make this necessary. 51. The terms “open” or “half-open” adoption are not used in the Civil Code. 3. Provisions on contact with a child 52. Under Article 1684 § 1, a child is entitled to have contact with both parents; each parent is obliged to have contact with, and entitled to have contact with, the child. 53. Under Article 1685 §§ 1 and 2 in the version applicable when the courts of first instance and the appeal court decided in this case, grandparents and siblings had a right to contact the child if this served the best interests of the child. The same applied to the spouse or former spouse and the civil partner or former civil partner of a parent, where this person had lived in domestic community with the child for a long period, and to persons with whom the child had spent a long period of time as a foster child. 54. Under the current version –­­ valid since 23 April 2004 – persons with whom the child has a close relationship (enge Bezugspersonen) have a right to contact with the child if it serves its best interests and if they have or have had “actual responsibility” for the child (a “social and family relationship”). It is assumed that actual responsibility has been taken if the person has lived for a long period of time in domestic community with the child. The law had to be changed because the Federal Constitutional Court, by judgment of 9 April 2003 (1 BvR 1493/96, 1724/01), declared Article 1685 in its old version incompatible with Article 6 § 1 of the Basic Law regarding natural fathers who had a “social and family relationship” with their children. 4. Provision on information on a child 55. In accordance with Article 1686, each parent may, when it is justified, request information from the other parent on the personal circumstances of the child, to the extent that this is not inconsistent with the best interests of the child. Disputes are decided by the family court. 5. Provision on urgent measures in the best interest of the child 56. Pursuant to Article 1666 in the version applicable before July 2008 the family court was empowered to take the necessary measures if the parents were not willing or were not able to avert a danger to the physical, mental or psychological best interests of a child caused by abuse of parental custody, neglect of the child or by any other failure of the parents to carry out their duty. C. Law on a remedy against lengthy court proceedings and criminal investigations 57. Under this Act (Gesetz über den Rechtsschutz bei überlangen Gerichtsverfahren und strafrechtlichen Ermittlungsverfahren), which came into force on 3 December 2011, a national remedy against the excessive length of court proceedings and criminal investigations was created. According to its Article 23, the transitory provision, the new remedy is applicable to pending cases as well as to cases where the proceedings have terminated on the national level but which already form part of an application to the European Court of Human Rights. D. International Conventions 1. 1967 European Convention on the Adoption of Children 58. Germany signed the 1967 Convention in April 1967 and ratified it in November 1980. It entered into force in Germany on 11 February 1981. The relevant provisions of the Convention read as follows: “Article 20 1. Provision shall be made to enable an adoption to be completed without disclosing to the child’s family the identity of the adopter. 2. Provision shall be made to require or permit adoption proceedings to take place in camera.” 2. European Convention on the Adoption of Children (revised 2008) 59. The revised European Convention on the Adoption of Children was opened for signature on 27 November 2008 and entered into force on 1 September 2011. Germany has not signed the revised Convention. The relevant provisions of the 2008 Convention read as follows: “Article 22 1. Provision may be made to enable an adoption to be completed without disclosing the identity of the adopter to the child’s family of origin. 2. [as Article 20 § 2 above].” THE LAW I. ALLEGED VIOLATION OF ARTICLE 8 OF THE CONVENTION 60. The applicant complained that the decisions of the German courts denying her the right to have contact with and receive information about the children of whom she is the natural mother violated her right to respect for her family and private life under Article 8 of the Convention, which reads as follows: “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.” 61. The Government contested that argument. A. Admissibility 62. 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 applicant’s submissions 63. The applicant emphasised in particular that her consent to the placement of her children for adoption did not automatically end her “family life” within the meaning of Article 8 of the Convention. By signing the deed she had merely waived her right as a legal parent, but not as a natural mother. 64. The applicant stressed that as the natural mother of the adopted children, contact with them and information about their well-being formed at least a part of her “private life”, as it concerned an important part of her identity even though she had ceased to have legal rights over the children. Refusal to allow a natural mother contact with her child after it had been adopted was disproportionate, especially in this case, where the adoptive parents, the Bielefeld Youth Office and the applicant had agreed to a “half‑open” adoption, which meant that the applicant would be informed about the development of the children and would be able to meet them twice a year. 2. The Government’s submissions 65. The Government argued that there had been no interference with the applicant’s right to respect for her family life. All forms of family relationship had been extinguished at the latest at the time of the adoption. Citing Schneider v. Germany, no. 17080/07, § 80, 15 September 2011, the Government pointed out that biological kinship between a biological parent and child alone, without any further legal and factual elements indicating the existence of a close personal relationship, was insufficient to attract the protection of Article 8 of the Convention. The Government noted that in the case at hand the children never lived with the applicant. 66. The Government conceded that the applicant’s relationship with her adopted children might fall within the scope of Article 8 of the Convention under the notion of “private life”. They acknowledged that the fact of the children’s existence would always be an important aspect of the applicant’s life history, given that she was their natural mother. However, they doubted that the decisions of the domestic courts regarding contact and information rights infringed the applicant’s right to respect for her private life. The Government pointed out that the applicant had been informed about the legal effects of the placement order. They further stressed that the alleged arrangements concerning a “half-open” adoption were made only after the applicant had placed the children for adoption. At the time of consenting to the adoption, the applicant had had no grounds whatsoever to assume that she would be able to continue any form of relationship with the children. 3. Assessment by the Court (a) Whether there has been an interference or a positive obligation 67. The Court observes at the outset that the instant application exclusively concerns the domestic courts’ refusal to grant the applicant contact with and information about her natural children. The applicant does not, in fact, contest the validity of her consent to the placement of the newborn children for adoption. 68. The Court notes that the relationship of the applicant with her children fell under the protection of Article 8, under the notion of “family life”, at the time when the children were born. The relationship between the applicant and the children might have ceased to fall within the scope of “family life” when the applicant signed the deed which irrevocably placed the children for adoption at the civil law notary’s office on 9 November 2000. 69. The Court reiterates that biological kinship between a natural parent and a child alone, without any further legal or factual elements indicating the existence of a close personal relationship, might be insufficient to attract the protection of Article 8 (see Schneider v. Germany, cited above, 17080/07, § 80, and Hülsmann v. Germany (dec.), no. 33375/03, 18 March 2008). Notwithstanding that the Court has in some cases considered that even “intended family life” might, exceptionally, fall within the ambit of Article 8, (see Anayo v. Germany, no. 20578/07, § 57, 21 December 2010), the Court observes that in the present case the existing family relationship was intentionally severed by the applicant. However, the Court considers that the determination of remaining or newly established rights between the applicant, the adoptive parents and her biological children, even if they fall outside the scope of “family life”, concern an important part of the applicant’s identity as a biological mother and thus her “private life” within the meaning of Article 8 § 1. 70. The Court observes that the applicant complains about the decisions of the German courts refusing her the right to have contact with, and the right to receive information about, the adopted children. The Court reiterates that while the essential object of Article 8 is to protect the individual against arbitrary interference by the public authorities, it does not merely compel the State to abstain from such interference: in addition to this negative undertaking, there may be positive obligations inherent in an effective respect for private or family life. In the instant case, there are elements which suggest that the German courts’ decisions could be considered in the light of a positive obligation. However, the boundaries between the State’s positive and negative obligations under Article 8 do not lend themselves to precise definition. The applicable principles are nonetheless similar. In determining whether or not such an obligation exists, regard must be had to the fair balance which has to be struck between the general interest and the interests of the individual; and in both contexts the State enjoys a certain margin of appreciation (see, for instance, Mikulić v. Croatia, no. 53176/99, § 58, ECHR 2002‑I; Evans v. the United Kingdom [GC], no. 6339/05, § 75, ECHR 2007‑I; and S.H. and Others v. Austria [GC], no. 57813/00, § 88, ECHR 2011). (b) Justification under paragraph 2 of Article 8 71. The Court will thus continue its examination by determining whether the impugned court decisions were “in accordance with the law” pursued an aim or aims that are legitimate and can be regarded as “necessary in a democratic society”. (i) In accordance with the law 72. The Court notes that neither Article 1684 nor Article 1685 of the Civil Code conferred on biological parents a right to have contact with their children as such. The same can be said for Article 1686 of the Civil Code which does not give them a right to have information about their adopted children. 73. The Court further notes that when examining the applicant’s request the domestic courts did not limit their legal analysis to a literal reading of the provisions of the Civil Code. In conformity with a decision of the Federal Constitutional Court, they construed the named provisions beyond their literal wording insofar as they asked whether a “social and family relationship” between the children and the applicant had already been established and whether for this reason contact would serve the best interests of the children. In applying this standard the domestic courts took the individual circumstances of the case into account. In coming to the conclusion that such a relationship had not yet been established between the applicant and the twin children, the domestic courts emphasised in particular the short period of nineteen days that they had actually spent together after the children’s birth. In this context, the Court reiterates that is is not its task to deal with errors of fact or law allegedly committed by a national court unless and insofar as they may have infringed rights and freedoms protected by the Convention (see Garcia Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I). 74. Under the pertinent provisions, the termination of the applicant’s legal right as a parent is the consequence of her consent to the deed before the civil law notary. By this act her rights to contact with the children and information about them terminated. In conformity with the statutory law, the applicant was made aware of the legal consequences of placing the children for adoption by a civil law notary prior to signing the adoption deed. The Court notes that the explanations given by the civil law notary regarding the statutory law were not in dispute. According to the declaration adopted before the notary, there was no allusion made to a “half-open adoption” in this context. The Court further notes that civil law notaries are lawyers who have undergone special counseling training before being admitted to the notary bar. 75. The Court observes that the domestic courts had established in separate proceedings that the adoption deed in the pertinent case was valid. The domestic courts established, on the basis of an expert report, that the applicant had been capable of understanding the impact of the adoption deed and of acting accordingly. As a consequence of this the applicant’s parental rights were finally extinguished when the adoption took effect in accordance with Article 1755 of the Civil Code. (ii) Legitimate aim 76. The Court observes that the German provisions on anonymous adoption, by not providing a right to contact with and information about the adopted children, aim at protecting the adopted child’s private and family life. At the core of this lies the intention to safeguard the adopted child’s right to develop and bond with his or her adoptive parents. The same applies to the adoptive parents who also hold a right to protect their private and family life, including a corresponding right to bond with their adopted children and to develop undisturbed family life. In pursuing this aim the German provisions are in conformity with Article 20 of the 1967 European Convention on the Adoption of Children, as well as with Article 22 of the 2008 revised version of that Convention, although the Court takes note that Germany has neither signed nor ratified this revised Convention. The Conventions provide for anonymous adoptions, the purpose of which, according to the explanatory reports of those conventions, is to avoid difficulties which may arise from the natural parents’ knowledge of the adopter’s identity. The Court observes in this context that even if the more recent Convention allows for less strict regulations on adoption, it does not favour such an approach. In this context it is also necessary to take into account if a State has rules on foster care which allow natural parents to retain, to a great extent, their legal status as parents. This is the case for Germany. The Court notes that the applicant was made aware of the existence of foster care prior to the adoption process even if, as the applicant alleges, the information given was not comprehensive (compare paragraph 12, above). 77. The decision of the Schleswig Court of Appeal was aimed at complying with the legislator’s will to give preference to a newly established family relationship between the children and their adoptive parents, with whom the children actually lived and who were providing parental care on a daily basis. The courts further emphasised the importance of allowing the very young children to develop in their adoptive family without disruption. 78. In the light of these considerations the Court accepts that the decisions at issue pursued the legitimate aim of protecting the rights and freedoms of others. (iii) Necessary in a democratic society 79. The question the Court now has to address is whether the decisions of the domestic courts with regard to contact and information were necessary to pursue the aforementioned aim and struck a fair balance between the rights of the children in question, the adoptive family and the private life of the applicant as the children’s natural mother. 80. In this context the Court notes that the adoptive parents had given – a representative of the Youth Office being present – the applicant reason to expect a “half-open” adoption and had consented orally to at least an exchange of information about the children after the adoption. 81. Although the terms “open” and “half-open” adoption are not used in the Civil Code, the Court takes note of the Government’s argument that German law permitted “open” and “half-open” forms of adoption. Under such an agreement there could be contact of a greater or lesser degree of intensity – either direct or mediated by the Youth Office – between the adoptive parents, the child and the biological parents. The Government further explained that such forms of adoption were dependent on the consent of the adoptive parents, who held custody rights and exercised parental care in the best interests of the child. Regarding the agreement in the case at hand, the Government emphasised that it only contained reference to the applicant’s right to have information about the children. The Government assessed the legal value of such arrangements as mere declarations of intent which were not enforceable against the adoptive parents’ will. According to the Government, making such decisions enforceable was not considered expedient as adoptive parents should have freedom in the exercise of their custody rights. The Government further pointed to Article 1750 of the Civil Code, which stipulated that a declaration of consent to adoption could not be made subject to any condition or have any condition attached to it later. 82. The applicant argued, in line with the Government, that an “open” or “half-open” adoption only differed from a classic adoption to the extent that details as to the identity of the adoptive parents were disclosed. Concerning the “agreement”, she emphasised that she had demanded that an agreement on contact rights and information be made before she signed the deed ceding her parental rights. However, the Youth Office had urged her to cede her rights first and had only afterwards arranged a meeting between her and the adoptive parents. 83. The Court notes that nothing indicates that either the Youth Office or the prospective adoptive parents had wanted to deviate from the German statutory law on adoption, which provides for an anonymous adoption but permits disclosure of identity by the adoptive parents themselves. 84. The Court emphasises that the oral arrangements between the applicant and the adoptive parents were concluded after the applicant had been informed by an independent lawyer, a civil law notary, about the legal consequences of her intention to declare her irrevocable consent to the adoption. The Court notes that the requirement that formal legal advice be provided by an independent lawyer is an essential safeguard against misunderstandings of the nature of the deed, which cannot be revoked and cannot have conditions attached to it later. 85. To the Court this clearly indicates that the applicant understood the “arrangements” in the way the Government described them: namely, as a declaration of intent in the context of a prospective voluntary setting aside of anonymity by the adoptive parents. This is also made clear by the specific circumstances of the conclusion of the agreement which was only made orally and did not contain any details on the right to information and the right to contact. 86. The adoption process, seen as a whole and including the court proceedings, was fair and ensured the requisite protection of the applicant’s rights. The Court reiterates that the legal rights of the applicant with regard to her biological children were severed as a result of acts she had taken in full knowledge of the legal and factual consequences. In view of this the Court finds the decision of the German authorities to attach greater weight to the privacy and family interests of the adoptive family to be proportionate. There is no indication that the domestic courts failed to sufficiently establish the relevant facts, in particular the personal links between the applicant and the children, although they did not order an expert opinion on the children’s best interests. As the children were adopted as newborns and were still very young at the time of the domestic proceedings, the interests of the adoptive family to enjoy and build a family life together with the children undisturbed by attempts by the children’s biological parent to re-establish contact prevailed. 87. The foregoing considerations are sufficient to enable the Court to conclude that there has not been a violation of Article 8 of the Convention. II. ALLEGED VIOLATION OF ARTICLE 14 TAKEN IN CONJUNCTION WITH ARTICLE 8 OF THE CONVENTION 88. The applicant further complained under Article 14 of the Convention taken in conjunction with Article 8 that she was discriminated against in comparison to step- or foster parents, who had a potential right to contact with children formerly in their care if that contact was deemed suitable for the children. 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.” 89. The Court notes that the domestic courts applied Articles 1684 § 1 and 1685 §§ 1 and 2 of the Civil Code in exactly the way they would have done if the applicant had been either a stepmother or a foster parent. It observes, in particular, that even a stepmother or foster parent would not have qualified for such rights in the applicant’s position, because the short period of time she actually lived with her natural children, did not, in the domestic courts’ view, allow her to establish a social and family relationship with them. It follows that the applicant’s complaints under Article 14 in conjunction with Article 8 concerning both the guardianship and contact proceedings must be rejected as manifestly ill-founded, pursuant to Article 35 §§ 3 (a) and 4 of the Convention. III. ALLEGED VIOLATION OF ARTICLES 6 AND 13 OF THE CONVENTION 90. The applicant had originally complained that the length of the proceedings before the domestic courts had been excessive and that the domestic law did not provide for an effective remedy. 91. By letter of 27 June 2012 the applicant informed the Court that she did not wish to pursue her complaint under Article 6 and Article 13, as she was not inclined to make use of the new domestic remedy against lengthy court proceedings. 92. The Court notes that the applicant wishes to withdraw her complaint as she does not wish to pursue it at the domestic level. The circumstances therefore lead to the conclusion that the applicant does not intend to pursue her application in this regard (Article 37 § 1 (a) and (b) of the Convention). In addition, there is no reason pertaining to respect for human rights as defined in the Convention or its Protocols that requires the Court to continue the examination of this complaint (Article 37 § 1 (c) in fine). Accordingly, these complaints are to be struck out. FOR THESE REASONS, THE COURT 1. Decides, unanimously, to strike out the application out of its list of cases in so far as it relates to the complaints under Article 6 § 1 and Article 13 of the Convention; 2. Declares, unanimously, the complaint under Article 8 of the Convention admissible and the remainder of the application inadmissible; 3. Holds, by five votes to two, that there has been no violation of Article 8 of the Convention. Done in English, and notified in writing on 5 June 2014, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Claudia WesterdiekMark VilligerRegistrarPresident In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the separate opinion of Judge Power-Forde joined by Judge Zupančič is annexed to this judgment. M.V.C.W. DISSENTING OPINION OF JUDGE POWER-FORDE JOINED BY JUDGE ZUPANČIČ I accept that the respondent State is entitled, in principle, to make provision within its legislation for the lawful adoption of children. I take no issue with the permanent effects of adoption as set out in §1754 and §1755 of the German Civil Code. Pursuant to those provisions, adoption changes the legal status of the child vis-à-vis his or her adoptive parents. Further, the relationship of a child to his or her birth mother and the rights and duties arising therefrom are extinguished upon the making of an adoption order. My difficulties in this case relate to the State’s positive obligations under Article 8. My concerns are somewhat accentuated by the very proactive role taken by the authorities in encouraging the applicant to have her children adopted. Though, clearly, overwhelmed by the situation in which she found herself, it would appear that she was, to say the least, discouraged from exploring alternatives to adoption. This can be seen in the fact that notwithstanding their knowledge of her obvious personal and financial difficulties, the applicant was advised by the authorities that she would have to pay for foster care in the event that she pursued that option. My difficulties with the State’s discharge of its positive obligations are two-fold. They concern, firstly, the State’s failure to provide clear legal principles governing the operation of so-call ‘half-open’ adoptions and, secondly, its failure to ensure that independent evidence of the applicant’s capacity to consent to adoption was available having regard to her particular vulnerability at the time of the events in question. The Absence of Legal Clarity in Relation to ‘Half-open’ Adoption The government acknowledges that German law permits of such an arrangement as a ‘half-open’ form of adoption.[1] This, depending on the circumstances, may involve some contact between the birth mother and her child post adoption and may be mediated by the Youth Welfare Office. The government cites Section 1626(1) of the Civil Code as the legal basis to such half-open adoptions. In addition to this acknowledgment, it is clear that the domestic courts in Germany also recognise the concept of ‘half-open’ adoption. The Reinbek District Court which, on 21 June 2001, made the adoption order in this case confirmed that ‘a half-open adoption was agreed on.’ It further confirmed that arrangements made between the applicant, the adoptive parents and the Youth Welfare Office in this case ‘remain valid.’ Despite such confirmation from the respondent State, the majority notes that the term ‘half-open adoption’ is not to be found in the German Civil Code. The uncertainty thus begins. Further, notwithstanding the fact that the validity of the tri-partite agreement was noted by the domestic court that made the adoption order in this case, it appears that this ‘valid’ agreement was entirely incapable of being enforced if the adoptive parents choose not to honour its terms. It is not entirely correct to assert (as does the majority) that the applicant ceded her rights at the moment she signed her consent to adoption on 9 November 2000. Under domestic law, her right to parental custody was ‘suspended’ at that stage. Her consent only became effective and thus, irrevocable, on the date it was ‘received by the family court’. No other court date being mentioned in the judgment such receipt, it may be assumed, became effective on 21 June 2001 when the Court took judicial notice of the decision of the applicant together with the half-open nature of the adoption agreed upon between the three parties. It then made the adoption order, accordingly. It was only at that point that the applicant’s rights which, previously had been suspended, were now extinguished. Importantly, during that six month period and before the adoption order was made, the Adoption and Special Care Department stated in an expert report that an agreement had been reached in November 2000 (that is, just two weeks after consent had been declared but six months prior to the making of the adoption order) - that the adoptive parents would, once a year, send photographs and a report.[2] This agreement, to which the authorities were party, clearly, led the applicant to believe that she would continue to receive information about her children after they had been adopted. Whilst the district court recognised that photographs would be sent to her, annually, this did not transpire after the adoption order was made. The adoptive parents retained the exclusive power to decide whether or not such an agreement was to be honoured and the applicant was left without recourse. The fact that statutory bodies can enter into ‘half-open’ adoption agreements with birth mothers before an adoption order is made creates, unfortunately, the entirely false and misleading impression that such agreements can have a binding effect upon the subsequent adoption that follows. There can be few, if any, decisions of greater magnitude in a person’s private or family life than the decision to allow one’s children to be adopted. Given the gravity of what is issue, there ought to be no room for the kind of vagueness and uncertainty that prevailed in this case. There is, to my mind, a positive obligation on a State that permits of such ‘half-open’ adoptions to ensure that legal clarity is unequivocally available to a vulnerable birth mother who enters into such a pre-adoption arrangement. Where the State is party to or involved in the making of such an agreement with a birth mother, it is incumbent upon the authorities to ensure that she is left in no doubt as to its utter worthlessness in the event that adoptive parents withdraw therefrom after an adoption order is made. To my mind, the State should not be complicit in a situation where vulnerable mothers take such a vital decision concerning their private and family life based on agreements that are entirely unenforceable. The general lack of clarity and the failure to provide the applicant with any procedures whereby the validity of the ‘half‑open’ adoption agreement could have been tested and, if necessary, enforced demonstrates a failure on the part of the respondent State to have clear and unambiguous legal principles regulating such a vital area of the applicant’s private and family life. The Absence of Evidence of Capacity to Consent There is clear evidence before the Court that the applicant was psychologically traumatised at the time when she made her decision to consent to adoption. The domestic authorities were aware of the fact that the applicant had been suffering from ‘depression’, ‘panic attacks’ and ‘suicidal tendencies’ (§ 11). It is common knowledge that such conditions may have an impact upon a person’s capacity to make a free and informed decision. Given the obvious psychological difficulties under which the applicant laboured shortly after having given birth, it seems to me that the authorities were obliged to dispel any doubts as to her capacity to make a free and informed consent prior to encouraging and facilitating the adoption of her children. Despite earlier diagnoses of ‘depression’, ‘panic attacks’ and ‘suicidal tendencies’, no objective psychiatric assessment of the applicant’s capacity to consent was made at the relevant time. A belated examination of her earlier capacity cannot replace the need for such an assessment to be made at the time when her decision was taken. To my mind, once on notice of such clear vulnerability on the part of the applicant, the authorities were obliged to ensure that it had independent expert evidence of capacity to consent prior to its facilitation and encouragement of adoption in this case. I do not suggest that in every case of adoption the authorities are obliged to obtain independent expert evidence of capacity to consent. However, where there are clear indications that questions arise in relation to such capacity then, in my view, such an obligation arises. For the reasons set out herein, I find that the State failed to discharge its positive obligations under Article 8 of the Convention and that there has therefore been a violation of that provision in this case. [1]1. See in its submissions of 13 June 2012 at § 23. [2]1. Whilst the judgment notes that the agreement was reached ‘in the presence of’ the authorities, it is clear from the submissions received that their role was a good deal more proactive than that of passive observers. The Government accepts that a written agreement was reached about the photographs and reports prior to the adoption order being made. It points to a letter sent by the adoptive parents to the applicant in March 2001 which refers to their ‘agreement reached with the mother and the Youth Welfare Officer’.

COURT OF APPEAL FOR ONTARIO CITATION: Eks v. Tadeu, 2020 ONCA 456 DATE: 20200708 DOCKET: C67195 Feldman, Fairburn and Nordheimer JJ.A. BETWEEN Susan Elizabeth Eks Plaintiff/Defendant by Counterclaim (Respondent) and Kerri Lynn Tadeu Defendant/Plaintiff by Counterclaim (Appellant) Christopher Du Vernet and Carlin McGoogan, for the appellant David M. Adams and Matthew E. Taft, for the respondent Heard: in writing On appeal from the judgment of Justice Graeme Mew of the Superior Court of Justice, dated June 17, 2019, with reasons reported at 2019 ONSC 3745. COSTS ENDORSEMENT [1] On June 30, 2020 we dismissed this appeal. In doing so, we awarded costs to the respondent in the amount of $3500. [2] Unbeknownst to the panel, prior to the release of our decision, counsel had written to the court to advise that the parties had reached an agreement on the costs of the appeal. Their agreement was, in part, that if the appeal was dismissed the respondent would receive $11,000 for costs, inclusive of disbursements and HST. [3] In light of the parties’ agreement, we amend our reasons to provide that the appellant will pay to the respondent her costs of the appeal fixed in the amount of $11,000, inclusive of disbursements and HST. “K. Feldman J.A.” “Fairburn J.A.” “I.V.B. Nordheimer J.A.”

Mrs Justice Slade: These are the reasons for granting interim injunctive relief in an Order drawn up on 14 August 2014. The Claimant, a partner in and chairman of a firm of solicitors ('the firm') applied for an interim injunction under section 3(1) of the Protection from Harassment Act 1997 ('PHA') to restrain the Defendants and the individuals the Second Defendant is alleged to represent from harassing him and the individuals he represents. The First Defendant, Mr Beach, a former client of the firm, is alleged to have posted material on websites he controls and to have provided material for a website or websites which the Second Defendant, Mr Kordowski, controls. These actions are said to constitute harassment of the Claimant and those whom he represents. These include other partners in the firm named on the websites. Interim injunctive relief was sought to obtain removal of such material from the internet and to prevent the Defendants from re-instating it. Further, interim relief was sought to restrain the Defendants from harassing other current or future partners or employees of the firm. Letters of claim sent to the Defendants on 30 July 2014 were not answered. At the hearing of the application for an interim injunction on 13 August 2014 the Claimant was represented by Mr Godwin Busuttil of Counsel. Neither Defendant appeared or was represented. Mr Busuttil submitted that pursuant to CPR 23.11(1) the hearing of the application should proceed in the absence of the Defendants. On 6 August 2014 solicitors for the Claimant sought to have served on each Defendant documents including the Application Notice for the interim injunction together with a Draft Order, the Claim Form, Particulars of Claim and witness statements including that of the Claimant. In his witness statement of 8 August 2014, Andrew Kemp, process server, stated that on 6 August 2014 he went to the farm where Mr Beach lives. He was informed that Mr Beach lived in a bungalow on the farm. At 15:05 he rang on the bell outside one of two bungalows. A lady spoke to him. She confirmed that Daniel Charles Beach continued to reside at the address and would receive anything left there for his attention. The process server effected service by handing the documents to the lady after she confirmed that she would pass the papers to Daniel Charles Beach upon his return to the property. In his witness statement of 8 August 2014 Julian Rozario, process server, stated that on 6 August 2014 he attended an address in Essex. After receiving no reply to his repeated knocking he sought to serve the Application Notice and other documents on Mr Kordowski by leaving them on the doorstep of the property. During the course of the hearing on 13 August 2014 I was told by Mr Busuttil that his solicitor had just been informed that Mr Kordowski was no longer living at the address where Mr Rozario had left the papers. The application for an interim injunction was to be on notice. Despite a submission by Mr Busuttil that I should hear the application for relief against Mr Kordowski without notice, once it was known that service on him had not been effected in accordance with the CPR, in my judgment, as had been the Claimant's intention, he should be given notice of the substantive application. I decided that the application for an interim injunction should not proceed against Mr Kordowski without notice. However I was satisfied that there was a real risk that he may have come into possession of the Litigation Papers which were also sent to him by email in addition to being left for him at his previous address and that unless restrained he may disseminate information in the Litigation Papers which was the subject of any interim injunction granted against Mr Beach. Accordingly an Order was given on an urgent without notice basis restraining him from publishing, communicating or disclosing such papers, with the exceptions there set out. On the evidence of Mr Kemp I was satisfied that Mr Beach had been served in accordance with CPR 6.26 with the Notice of Application, the Particulars of Claim and accompanying documents. The requirements of CPR 23.7 had been satisfied. Further I was satisfied that he had been served with the Claim Form in accordance with CPR 7.5. Mr Beach did not appear at the hearing and had given no reason for failing to do so. Having regard to the overriding objective and exercising my discretion under CPR 23.11(1) I heard the application for an interim injunction against Mr Beach in his absence. Mr Busuttil applied for an Order under CPR 39.2(3)(a), (c) and (g) that the hearing of the application for injunctive relief be held in private on the basis that publicity would defeat the purpose of the application and that a private hearing was necessary in the interests of justice. Counsel contended that making public the identity of the offending websites, their content and the identity of the Claimant and those he represents would be likely to lead to others accessing the material causing the Claimant and those he represents further harassment. Whilst I accepted that publication of such matters could defeat the object of the proceedings, balancing this risk with the important general rule that a hearing is to be in public, in my judgment the concern of the Claimant could be met by making a different Order. Being satisfied that it was strictly necessary to do so, pursuant to section 6 of the Human Rights Act 1998 ('HRA'), CPR 39.2 or section 11 of the Contempt of Court Act 1981 I made an Order that certain matters be withheld from the public in the proceedings before the Court. These are the name of the Claimant, the names of the individuals who the Claimant represents in these proceedings who are identified as the Listed Protected Parties in a Confidential Schedule, the name of the Claimant's firm and the domain names of the websites identified in a Confidential Schedule. As a consequence of these Orders, I gave the Claimant permission to amend the Claim Form and Particulars of Claim. This was necessary to preserve the anonymity of the Claimant, the Listed Protected Parties and the relevant websites. Adopting the approach endorsed by Mr Justice Tugendhat in The Law Society v Kordowski [2011] EWHC 3185 (QB), [2014] EMLR 2 in respect of the claims made in those proceedings by a firm of solicitors and a solicitor, Mr Busuttil explained that these proceedings are brought by the Claimant both in his personal capacity and, pursuant to CPR 19.6, in a representative capacity. Those represented by the Claimant were said to be (a) individuals in his firm who are named on and are being harassed by material on the websites, (b) current and future employees of the firm who are not named on the websites but who are at risk of being harassed by the Defendants in the future, particularly by the websites and (c) all lawyers and other persons acting for the Claimant in these proceedings each of whom is at serious risk of being unlawfully harassed by the Defendants. The proceedings are brought against Mr Kordowski both personally and as a representative of all other individuals who are involved with him in the operation and publication of a website operated by him. CPR 19.6 provides: "(1) Where more than one person has the same interest in a claim— (a) the claim may be begun; or (b) the court may order that the claim be continued, by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest." The Third Claimant in the Law Society case, an individual solicitor, brought proceedings: "…on his own behalf and in a representative capacity under CPR r19.6 on behalf of all solicitors in England and Wales and other individuals involved with or connected to the legal profession that are at serious risk of being named on the relevant website. It was contended that the Third Claimant had a common interest and/or grievance in relation to the litigation with those he represented, namely: preventing the harassment of individual solicitors; and preventing the breaches of the Data Protection Act 1998; and the relief sought is beneficial to all." [160] Tugendhat J held: "In my judgment the proceedings by the Second and Third Claimant in respect of the claims for harassment and under the DPA should be continued as they have been begun. Solicitors who have not been named have an interest in the injunction in so far it is quia timet. Consent to be represented is not required, as the authorities show. The class is readily identifiable once persons or firms are named on the website. An injunction would be equally beneficial to all. [162] The common interest arises from the fact that the claim as pleaded is made in respect of a course of conduct, which includes data processing, which is the same or similar in relation to all the Represented Parties. The common grievance arises from the facts pleaded regarding the operation of the website… [163]" The basis for the Claimant continuing these proceedings in a representative capacity is analogous to that in the Law Society case. However of those sought to be represented I was not satisfied that the category of "future employees of the firm" was sufficiently identifiable to be included. The proceedings are brought against Mr Beach and Mr Kordowski on behalf of himself and in a representative capacity. Having regard to the fact that the hearing of the application as against Mr Kordowski was treated as ineffective and did not proceed except in so far as it concerned the without notice application concerning consequential Orders regarding the Litigation Papers, no determination was made regarding the continuation of proceedings against Mr Kordowski in a representative capacity under CPR 19.6. In support of his application for an injunction, the Claimant relied upon his witness statement of 1 August 2014 of 101 pages with 11 exhibits containing many pages. Also before the Court were witness statements from three other partners of the firm. A chronology of key events was prepared by Mr Busuttil. Since the hearing of the application for interim relief before me did not proceed against Mr Kordowski the summary of key events below does not include those principally involving him. The key events relating to the application against Mr Beach include the following: 18.1. Between 2006 and 2010 the Claimant's firm was instructed by Mr Beach on a number of matters including, in particular, a Public Inquiry on a planning matter. 18.2. Between mid-2010 and the beginning of 2011 Mr Beach pursued a number of complaints about the firm. 18.3. In November 2010 Mr Beach published a defamatory posting concerning the firm, the Claimant and another partner at the firm on a website operated by Mr Kordowski. 18.4. In 2011 the firm issued proceedings against Mr Kordowski regarding the November 2010 posting and an interim injunction was granted. Following the entering of judgment against Mr Kordowski in the Law Society proceedings on 15 November 2011 the firm discontinued their proceedings. 18.5. In the spring of 2012 Mr Beach registered and took ownership of three domain names incorporating that of the firm. 18.6. In April 2012 the firm wrote to Mr Beach to complain about his registration and use of one of the domain names. Mr Kordowski replied on Mr Beach's behalf indicating that he was his agent and requesting that all future communications on the matter be directed to him. 18.7. In May 2012 Mr Beach registered and took ownership of two other domain names. 18.8. At the end of 2012 the firm instituted passing off proceedings regarding the use by Mr Beach of one of the domain names. 18.9. On 28 March 2013 the firm wrote to both Defendants stating that they considered them to be pursuing a course of conduct that amounted to harassment of its employees and acting in breach of the injunctions granted by Mr Justice Tugendhat in the Law Society case. There was no reply and the websites remained online. 18.10. On 29 April 2013 solicitors for the Claimant wrote to Google asking them to remove the Beach and Kordowski websites from their search engine results. Google replied on 20 May 2013 that as the person responsible for the material on the listed pages appeared to be Mr Daniel Beach and that as he was not named in the Order in the Law Society case they had not voluntarily removed the material. 18.11. On 7 March 2014 an order was made requiring Mr Beach to transfer two domain names to the firm. He has not done so and the websites remain online. 18.12. On 30 July 2014 Letters of Claim in the current proceedings were sent to the parties. 18.13. On 6 August 2014 the current proceedings and application for interim relief were issued. Screenshots of postings on Mr Beach's websites available to view on 30 July 2014 were exhibited to the statement made by the Claimant. These include the allegation by Mr Beach on one of his websites that while the firm was being paid over £200,000 to represent him at a planning inquiry they were in talks with a development company to acquire his property. He alleged that the firm was using the inquiry to increase their fees to remove him from his property and business. Mr Beach reported the Claimant and another partner in the firm to the police for their conduct during the inquiry. He also made a complaint to the Law Society. Neither of these complaints was upheld. He publicised the making of these complaints on his website. Another posting names the firm in conjunction with an allegation of corruption, being betrayed and sold out. Mr Beach invites comments about the Claimant and his firm from readers of the website. Dissatisfied with the outcome of his complaint to the Law Society Mr Beach posted his complaint on a Kordowski website. Offensive material about the Claimant, his firms and lawyers in the firm relating to their dealings with Mr Beach appeared on a website which was apparently operated by Mr Kordowski. For example there was a posting on the website which alleged that the Claimant committed perjury by submitting a witness statement to the High Court containing blatant lies. It is said that such material must have been supplied by Mr Beach and that he can request its removal. The Beach and Kordowski websites contain highly unflattering caricatures of the Claimant and some of his partners which appear to be doctored images taken from the firm's website. One post is titled as being from Danny Beach, the First Defendant. He states that he put the caricature of the Claimant on the site to get the Claimant's and his partners' attention. The makers of the statements before the court write of the distress caused to them by these and the many other offensive postings made by or emanating from Mr Beach over a considerable period of time. Some have had enquiries about the postings from actual or potential clients. There is a real concern that the postings have affected and will affect their business and deter people from applying to work for the firm. They have an apprehension that in any meeting they will have to face questions about the offensive material and may be asked about it in a social context. The material has been on the internet for a number of years. Interim injunctive relief The Claimant sought an interim injunction to restrain the Defendants from harassing him and those he represents, in particular by making offensive and distressing postings on the websites they control. Since the granting of the relief sought was likely to affect the exercise of the Convention right to freedom of expression, section 12 of the HRA applies. Accordingly the interim relief sought was not to be granted "unless the court is satisfied that the applicant is likely to establish that publication should not be allowed". In Cream Holdings Ltd v Banerjee [2005] 1 AC 253 Lord Nicholls, with whom the other judges agreed, held at paragraph 22 of the degree of likelihood necessary to satisfy section 12: "…As to what degree of likelihood makes the prospects of success 'sufficiently favourable', the general approach should be that courts will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably ('more likely than not') succeed at the trial. In general, that should be the threshold an applicant must cross before the court embarks on exercising its discretion, duly taking into account the relevant jurisprudence on article 10 and any countervailing Convention rights." The Claimant brings his claim under the PHA. The PHA provides: "1(1) A person must not pursue a course of conduct— (a) which amounts to harassment of another, and (b) which he knows or ought to know amounts to harassment of the other. … (2) For the purposes of this section … the person whose course of conduct is in question ought to know that it amounts to or involves harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to or involved harassment of the other. (3) Subsection (1) …does not apply to a course of conduct if the person who pursued it shows— (a) that it was pursued for the purpose of preventing or detecting crime, … (c) that in the particular circumstances the pursuit of the course of conduct was reasonable. … 7(2) References to harassing a person include alarming the person or causing the person distress. (3) A 'course of conduct' must involve— (a) in the case of conduct in relation to a single person (see section 1(1)), conduct on at least two occasions in relation to that person, …" In AVB v TDD [2014] EWHC 1442 (QB) Tugendhat J considered the authorities concerning the requirement to show a "course of conduct". At paragraph 52 Tugendhat J set out the summary of the law on harassment given by Simon J in Dowson v Chief Constable of Northumbria Police [2010] EWHC 2612 (QB) which was in part derived from the judgment of the House of Lords in Majrowski v Guy's and St Thomas' NHS Trust [2007] 1 AC 224. Simon J set out at paragraph 142 what a claimant must prove: "(1) There must be conduct which occurs on at least two occasions, (2) which is targeted at the claimant, (3) which is calculated in an objective sense to cause alarm or distress, and (4) which is objectively judged to be oppressive and unacceptable. (5) What is oppressive and unacceptable may depend on the social or working context in which the conduct occurs. (6) A line is to be drawn between conduct which is unattractive and unreasonable, and conduct which has been described in various ways: 'torment' of the victim, 'of an order which would sustain criminal liability'." In Thompson v James [2013] EWHC 515 (QB) Tugendhat J referred to harassment on the internet in paragraph 407: "There is nothing new about … campaigns of vilification: they have existed throughout history where one or more persons have wished to demonise another. But the internet has made them easier for individuals to conduct." The means of harassment used in the Claimant's case are those which were considered by Tugendhat J in Law Society v Kordowski. Tugendhat J accepted the submissions made on behalf the Third Claimant that: "61. The publication by the Defendant on the website of the name of the solicitors and individuals, including the Third Claimant, in the knowledge that such publications will inevitably come to their attention on more than one occasion and on each occasion cause them alarm and distress constitutes harassment under the PHA. Listing any of the Represented Individuals would also constitute harassment for the same reason. … 64. The publication is an ongoing one on a prominent website; accordingly the distress and alarm caused by the publication will also be continuous. It is reasonable to infer in every case that those posted would suffer such distress and alarm on at least two occasions." On the evidence before the Court, the attention of the Claimant and the represented individuals has been drawn to the Beach and Kordowski websites or their contents or it is to be inferred that this is likely to occur. The Claimant and his partners have seen and have been asked about the comments made by Mr Beach on the websites. The express intent of Mr Beach in one posting, that of 10 June 2012, was to try to attract the attention of the Claimant. The publications on the websites relied upon by the Claimant in this case allege corruption, failure to act in their client's interests, conflict of interest and untruthfulness. These statements are far more offensive than the unattractive and unreasonable conduct referred to in Dowson. They cross the line straying into "torment" of the subjects of the vilification. The necessary inference to be drawn from the material is that Mr Beach knew that his conduct constitutes harassment. If there were any doubt about this Mr Beach was so informed by letter dated 28 March 2013 from the Claimant's firm. On the material before the Court there appears to be no defence to the claim of harassment. The course of conduct does not fall into any of the categories set out in PHA section 1(3). The postings regarding the Claimant and those he represents on the offending websites have not been removed notwithstanding the judgment in the Law Society case, the letter from the Claimant's firm to Mr Beach of 28 March 2013, the letters of claim and the service of proceedings. Unless restrained by Order there was no reason to suppose that the postings would be withdrawn. I considered whether delay by the Claimant in seeking injunctive relief should lead to the refusal of such relief which otherwise would be granted. It may be said that delay indicates that the course of conduct by Mr Beach has not had the distressing effect claimed. However I was satisfied from the statements before the court that the postings by and about Mr Beach have caused and are causing the Claimant and the individuals named on the websites real distress. Whilst the Claimant waited for some time before taking action to obtain injunctive relief that delay has caused no apparent prejudice to the Defendants or diminished the strength of the claim for harassment. Pursuant to section 12(3) of the HRA no relief is to be granted so as to restrain publication before trial which might affect the exercise of the Convention right to freedom of expression unless the Court is satisfied that the Applicant is likely to establish that publication should not be allowed. I was so satisfied and granted injunctive relief in terms of the Order drawn up on 14 August 2014.

COURT OF APPEAL FOR ONTARIO CITATION: Royal Bank of Canada v. Datanet Wireless Inc., 2013 ONCA 706 DATE: 20131118 DOCKET: C57035 Cronk, Pepall and Strathy JJ.A. BETWEEN Royal Bank of Canada Plaintiff (Respondent) and Datanet Wireless Inc., Janet Nelson, Douglas Brent Hooton, 1754903 Ontario Ltd., VirtuallyAnywhere.ca Inc., Wayne Cook, and Toronto Dominion Bank Defendants (Appellant Janet Nelson) Jeffrey C. Silver, for the appellant Natalie Marconi, for the respondent Heard: November 12, 2013 On appeal from the order of Justice James M. Spence of the Superior Court of Justice, dated May 30, 2013. ENDORSEMENT [1] The appellant, Janet Nelson, appeals from the order of Spence J. of the Superior Court of Justice, dated May 30, 2013, dismissing her motion to set aside a default judgment granted against her on April 15, 2011.  By that judgment, the appellant and certain of her co-defendants were held liable to the respondent bank for damages for fraud in relation to a loan made to the defendant Datanet Wireless Inc. [2] The appellant advances four main grounds of appeal.  She argues, first, that the motion judge misapprehended and misapplied the governing test for setting aside a default judgment, in particular, the concept of an “arguable defence” under that test.  We do not accept this submission. [3] The motion judge explicitly addressed the applicable pre-requisites for the setting aside of a default judgment, as described in HSBC Securities (Canada) Inc. v. Firestar Capital Management Corp ., 2008 ONCA 894, 245 O.A.C. 47, leave to appeal to S.C.C. refused (2009), 399 N.R. 398 (note) (S.C.C.), Morgan v. Toronto (City) Police Services Board (2003), 34 C.P.C. (5th) 46, 169 O.A.C. 390 (C.A.) and related authorities.  He considered all the relevant factors in the context of the evidentiary record before him and concluded that the appellant had failed to satisfy any of the requirements for the setting aside of the judgment in question. He found that the appellant: (1) failed to provide a satisfactory explanation for her failure to appear on the motion to strike her statement of defence; (2) failed to furnish an adequate explanation for her delay of at least four months in moving to set aside the default judgment; and (3) failed to demonstrate that she had an arguable defence to the respondent’s action. [4] In our view, the motion judge’s identification of the relevant test and his consideration of the requirements for setting aside the default judgment reveal no error.  His pertinent findings were amply supported by the record.  We see no basis for appellate intervention with his findings. [5] In particular, we note that there was evidence before the motion judge from both a Bank official and one of the co-defendants that almost one-half of the loan proceeds advanced by the respondent bank for the benefit of Datanet Wireless Inc. was transferred to a bank account controlled by the appellant in her personal capacity on the same day that the funds were advanced.  In the face of this powerful, inculpatory evidence, the appellant’s only explanation for the use of the loan proceeds was a bald denial that she personally had received any of the funds advanced by the respondent. [6] Second, the appellant contends that she was denied natural justice and procedural fairness when her pleading was struck and that this excuses her default.  The record belies this contention. [7] The appellant’s statement of defence was struck by court order dated February 11, 2011.  As we have said, default judgment was granted on April 15, 2011.  The appellant was informed in mid-November 2010 that her former lawyers intended to seek an order removing them from the record.  She was also informed, as early as November 26, 2010, that the respondent`s motion to strike her statement of defence was scheduled to proceed on February 11, 2011. [8] Notwithstanding this advance notice, the appellant elected not to participate in either motion, instead ostensibly relying on her brother – a co-defendant who, like the appellant, had been accused of fraud by the respondent – to protect her interests.  Having decided for her own reasons to pursue this course of action, the appellant was not entitled to notice of any further steps taken by the respondent to collect the monies owed to it. [9] Third, the appellant claims that the motion judge erred by finding that there was undue delay in bringing the motion to set aside the default judgment.  We disagree. [10] Delay was but one factor considered by the motion judge when determining whether to set aside the default judgment.  Although the appellant maintains that she did not learn of the default judgment until she attended her examination-in-aid-of-execution in mid-December 2011, she took no steps to contact counsel until mid-April 2012.  By her own admission, the appellant had learned of the default judgment in December, approximately four months earlier. [11] In these circumstances, the motion judge did not err in finding that the appellant had delayed, without adequate explanation, in moving to set aside the default judgment.  By the time she did so, the respondent had compromised its claims against, and hence its ability to recover its judgment from, certain of the other key defendants.  This, too, was a factor that told against granting the discretionary relief sought by the appellant. [12] Finally, the appellant argues that the motion judge applied the foregoing factors as though they were rigid rules and without balancing the prejudice to the parties or the interests of justice. We disagree. The appellant failed to satisfy any of the factors and the respondent demonstrated actual prejudice. The motion judge was clearly of the view that the interests of justice did not favour setting aside the default judgment. [13] The appeal is dismissed.  The respondent is entitled to its costs of the appeal, fixed in the amount of $25,000, inclusive of disbursements and all applicable taxes. “E.A. Cronk J.A.” “S.E. Pepall J.A.” “G.R. Strathy J.A.”

B. Majmudar and M.J. Rao, JJ. Leave granted. We have heard learned Counsel for the parties finally. In our view, the order passed by the High Court cannot be sustained. The services of the appellant-Chowkidar were terminated by respondent No. 1 Board. The date of termination is November 12, 1975. He raised an industrial dispute though belatedly in March, 1983. Ultimately reference was made by the appropriate Government on April 17, 1984. The Labour Court adjudicated the reference and took the view that the termination was illegal. But companysidering the delay in raising the dispute, as a package 50 back wages were directed to be granted to the appellant with reinstatement. Respondent No. 1 carried the matter in appeal before the High Court under Article 226 of the Constitution of India.

ORDER OF THE COURT (Eighth Chamber) 25 November 2010 (*) (Appeal – Community trade mark – Regulation (EC) No 40/94 – Articles 8(1)(b) and (5), 73, 74 and 79 – Figurative mark A+ – Opposition by the proprietor of the Community word mark AirPlus International – Opposition rejected) In Case C‑216/10 P, APPEAL under Article 56 of the Statute of the Court of Justice of the European Union brought on 4 May 2010, Lufthansa AirPlus Servicekarten GmbH, established in Neu-Isenburg (Germany), represented by R. Kunze, Rechtsanwalt, appellant, the other parties to the proceedings being: Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by D. Botis, acting as Agent, defendant at first instance, Applus Servicios Tecnológicos SL, established in Barcelona (Spain), intervener at first instance, THE COURT (Eighth Chamber), composed of K. Schiemann, President of the Chamber, A. Prechal and E. Jarašiūnas (Rapporteur), Judges, Advocate General: P. Mengozzi, Registrar: A. Calot Escobar, after hearing the Advocate General, makes the following Order 1 By its appeal, Lufthansa AirPlus Servicekarten GmbH (‘Lufthansa AirPlus Servicekarten’) seeks to have set aside the judgment of the General Court of the European Union of 3 March 2010 in Case T-321/07 Lufthansa AirPlus Servicekarten v OHIM – Applus Servicios Tecnológicos (A+) (‘the judgment under appeal’), by which the General Court dismissed the action brought by the appellant against the decision of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 7 June 2007 (Case R 310/2006-2, ‘the contested decision’) dismissing the appeal brought against the decision of the Opposition Division of OHIM which in turn had rejected the opposition filed by the appellant against the application for registration of the figurative mark A+. Legal context 2 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) was repealed by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1), which entered into force on 13 April 2009. However, in view of the date of the facts, the present proceedings remain governed by Regulation No 40/94. 3 Article 8 of Regulation No 40/94, entitled ‘Relative grounds for refusal’, provides: ‘1. Upon opposition by the proprietor of an earlier trade mark, the trade mark applied for shall not be registered: … (b) if because of its identity with or similarity to the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; the likelihood of confusion includes the likelihood of association with the earlier trade mark. … 5. Furthermore, upon opposition by the proprietor of an earlier trade mark within the meaning of paragraph 2, the trade mark applied for shall not be registered where it is identical with or similar to the earlier trade mark and is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered, where in the case of an earlier Community trade mark the trade mark has a reputation in the Community and, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.’ 4 Under Article 73 of the regulation, entitled ‘Statement of reasons on which decisions are based’: ‘Decisions of the Office shall state the reasons on which they are based. They shall be based only on reasons or evidence on which the parties concerned have had an opportunity to present their comments.’ 5 Article 74 of the regulation, entitled ‘Examination of the facts by the Office of its own motion’, provides: ‘1. In proceedings before it the Office shall examine the facts of its own motion; however, in proceedings relating to relative grounds for refusal of registration, the Office shall be restricted in this examination to the facts, evidence and arguments provided by the parties and the relief sought. 2. The Office may disregard facts or evidence which are not submitted in due time by the parties concerned.’ 6 Article 78 of the regulation, entitled ‘Restitutio in integrum’, states in paragraph 1: ‘The applicant for or proprietor of a Community trade mark or any other party to proceedings before the Office who, in spite of all due care required by the circumstances having been taken, was unable to observe a time-limit vis-à-vis the Office shall, upon application, have his rights re-established if the non-observance in question has the direct consequence, by virtue of the provisions of this Regulation, of causing the loss of any right or means of redress.’ 7 Article 79 of Regulation No 40/94, entitled ‘Reference to general principles’, provides: ‘In the absence of procedural provisions in this Regulation, the Implementing Regulation, the fees regulations or the rules of procedure of the Boards of Appeal, the Office shall take into account the principles of procedural law generally recognised in the Member States.’ Background to the dispute 8 On 13 November 2002, Applus Servicios Tecnológicos SL, formerly Agbar Automotive SL (‘Applus Servicios Tecnológicos’), filed an application for registration of a Community trade mark with OHIM for various goods and services in Classes 9, 35, 36, 40, 41 and 42 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended. The mark in respect of which registration was sought is the figurative sign reproduced below: 9 On 29 December 2003, Lufthansa AirPlus Servicekarten filed a notice of opposition, under Article 8(1)(b) of Regulation No 40/94, against registration of that mark in respect of all the services to which it referred. The opposition was based on the earlier Community word mark AirPlus International, registered under number 2 335 693 on 26 September 2002, which also related to various goods and services in Classes 9, 35, 36 and 42 of the Nice Agreement. 10 By decision of 22 December 2005, the Opposition Division of OHIM rejected the opposition. 11 On 12 January 2006 Lufthansa AirPlus Servicekarten filed a notice of appeal with OHIM against that decision. 12 That appeal was dismissed by the contested decision on the ground that there was no likelihood of confusion between the marks at issue. The action brought before the General Court and the judgment under appeal 13 By application lodged at the Registry of the General Court on 28 August 2007, Lufthansa AirPlus Servicekarten brought an action seeking annulment of the contested decision and refusal to register the trade mark applied for. In support of its action it relied on four pleas in law, alleging infringement of Articles 8(1)(b) and (5), 73, 74 and 79 of Regulation No 40/94. 14 By the judgment under appeal, the General Court dismissed the action and ordered Lufthansa AirPlus Servicekarten to pay the costs. However, by order of 19 May 2010, handed down after the present appeal was lodged, the General Court, rectifying the judgment under appeal, held that Applus Servicios Tecnológicos should bear its own costs. 15 In dismissing the first plea in law, the first part of which related to the assessment of the likelihood of confusion within the meaning of Article 8(1)(b) of Regulation No 40/94, and the second part of which related to the reputation of the earlier mark within the meaning of Article 8(5), the General Court held, first of all, that the Second Board of Appeal of OHIM had been right to find that the signs at issue were not visually similar, that, overall, they were not similar phonetically and that there was a low degree of conceptual similarity between them. The Court also found that the Board had been right to find that, in light of the significant differences between the signs at issue, it was not necessary to determine whether the goods covered by the marks at issue were similar. Secondly, the Court held that the Board had been right to find that Article 8(5) of Regulation No 40/94 was not applicable, given that the signs at issue were neither identical nor similar. 16 The second plea in law, in essence alleging that the statement of reasons for the contested decision was insufficient, was dismissed on the grounds that the decision did disclose in a clear and unequivocal manner the reasoning followed by the Second Board of Appeal of OHIM and that, for reasons of economy of procedure, the Board was entitled not to conduct a full examination of all the arguments put forward by the appellant. 17 As regards the third plea in law, alleging infringement of Article 74 of Regulation No 40/94, by which the appellant argued that the Second Board of Appeal of OHIM ought to have based its decision on undisputed facts and ought not to have taken into consideration the observations submitted by Applus Servicios Tecnológicos out of time, on 11 December 2006, the General Court pointed out that OHIM enjoyed a wide discretion to decide, while giving reasons for its decision in that regard, whether or not to take into account facts which the parties had not put forward or evidence that they had not produced in due time. It also noted that the contested decision stated that the observations in question had been received in due time, further to an extension of time granted by OHIM. 18 Lastly, the General Court dismissed the fourth plea in law, alleging infringement of Article 79 of Regulation No 40/94, by which the appellant complained that OHIM had not informed it of the change in the owner of the Community trade mark application and had thus breached its right to a fair hearing. The Court noted, in this connection, that only the name of the owner had changed and that the appellant had not stated how that change had adversely affected its procedural rights. Forms of order sought before the Court of Justice 19 The appellant claims that the Court should set aside the judgment under appeal and order OHIM to pay the costs. 20 OHIM contends that the Court should dismiss the appeal and order the appellant to pay the costs. The appeal 21 Under Article 119 of its Rules of Procedure, where an appeal is, in whole or in part, clearly inadmissible or clearly unfounded, the Court may at any time, acting on a report from the Judge-Rapporteur and after hearing the Advocate General, dismiss the appeal by reasoned order without opening the oral procedure. 22 In support of its appeal, Lufthansa AirPlus Servicekarten maintains that the General Court misconstrued the relevant provisions of Regulation No 207/2009. However, given that the contested decision was adopted prior to the entry into force of that regulation, it must be considered that the provisions with which the appeal is concerned are in fact the corresponding provisions of Regulation No 40/94, the regulation applicable to the present dispute. 23 Furthermore, whilst the appellant puts forward six pleas in law, it must be observed that the sixth plea relates to the General Court’s ruling on costs. That ruling has, however, since given rise to the rectificatory order mentioned above and, consequently, the plea is now devoid of purpose. 24 The five pleas in law which remain to be examined in essence allege, respectively, infringement of Articles 8(1)(b), 8(5), 73 and 74 of Regulation No 40/94 and breach of the general principles referred to in Article 79 of that regulation. The first plea in law 25 The first plea in law put forward by the appellant, which in essence alleges infringement of Article 8(1)(b) of Regulation No 40/94, comprises two parts. In the context of the first part of the plea, the appellant complains that the General Court held, in paragraph 43 of the judgment under appeal, that the Second Board of Appeal of OHIM had not erred in finding that there was no likelihood of confusion without first determining whether the goods covered by the marks at issue were similar, holding that the lack of similarity between the signs was sufficient to rule out any such likelihood. That conclusion, the appellant submits, failed to take into account the interdependence between the similarity of the signs and that of the goods or services, which must be taken into account in the global assessment of the likelihood of confusion. The conclusion arose from a restrictive interpretation of the likelihood of confusion and failed to take into account the identical nature of or significant similarity between the goods and services in question and the enhanced distinctiveness and reputation of the earlier mark. 26 However, the Court has pointed out on numerous occasions that, for the purposes of applying Article 8(1)(b) of Regulation No 40/94, the likelihood of confusion presupposes both that the mark applied for and the earlier mark are identical or similar, and that the goods or services covered in the application for registration are identical or similar to those in respect of which the earlier mark was registered. Those conditions are cumulative (Case C-106/03 P Vedial v OHIM [2004] ECR I-9573, paragraph 51; Case C-234/06 P Il Ponte Finanziaria v OHIM [2007] ECR I‑7333, paragraph 48; judgment of 11 December 2008 in Case C‑57/08 P Gateway v OHIM, paragraph 45; Case C-16/06 P Les Éditions Albert René v OHIM [2008] ECR I‑10053, paragraph 44; and order of 4 March 2010 in Case C-193/09 P Kaul v OHIM, paragraph 43). Thus, where there is no similarity between the earlier mark and the mark applied for, the reputation of the earlier mark and the fact that the goods or services concerned are identical or similar are not sufficient for it to be found that there is a likelihood of confusion between the marks at issue (C-254/09 P Calvin Klein Trademark Trust v OHIM [2010] ECR I‑0000, paragraph 53). 27 Thus, after finding that the signs at issue were dissimilar, the General Court clearly did not err in law in holding that the Second Board of Appeal of OHIM had been right to regard it as unnecessary to rule on the similarity of the goods covered by the marks at issue. 28 In the context of the second part of the first plea in law, the appellant submits that the General Court’s assessment of the similarity of the signs was mistaken and contradictory. Whilst the General Court emphasised that the assessment of the similarity of signs must focus on the marks considered as a whole, bearing in mind any distinctive and dominant elements, it gave its approval, wrongly, to a piecemeal assessment of the earlier mark. The General Court thus acknowledged, in paragraph 38 of the judgment under appeal, that the element ‘international’ of the earlier mark could not be disregarded entirely in assessing whether the marks at issue were similar phonetically and that it did not have such a low degree of distinctiveness by comparison with the ‘airplus’ element that it played no significant role in the earlier mark. That reasoning, if it were to be upheld, the appellant submits, would make it possible for the element ‘international’ to be monopolised even though it is descriptive. It could not, in any event, provide the basis for the conclusion that the acknowledged similarity in English between ‘A+’ and ‘airplus’ did not exist. 29 The appellant submits that the same mistake vitiated the conclusion reached in paragraph 42 of the judgment under appeal, which was that the concept ‘plus’ cannot be monopolised and that no opposition is likely to succeed simply because the marks at issue both refer to the word ‘plus’ or to the sign ‘+’. That was contrary to the principle that the trade marks to be compared must be assessed as a whole, putting particular emphasis on the characteristic components of the marks. Moreover, it is difficult to see how the pronunciation of the marks at issue, which is acknowledged to be similar in English, has no bearing on their overall similarity. 30 In this connection, the General Court was right to state, in paragraphs 28 and 38 of the judgment under appeal, that the global assessment of the likelihood of confusion, in relation to the visual, phonetic and conceptual similarity of the signs in question, must be based on the overall impression given by the signs, bearing in mind, in particular, any distinctive and dominant components. 31 It is clear from the findings made in paragraphs 38 and 40 to 42 of the judgment under appeal that, without contradicting its preceding pronouncements, the General Court did investigate whether the signs at issue contained distinctive or dominant elements and evaluated the relative importance of each of the elements of the signs, from a phonetic and conceptual point of view, so as to assess the overall impression given by the signs. 32 Thus, the General Court clearly did not err in law in finding in essence, in its unfettered assessment of the facts, that none of the component elements of the earlier mark was dominant or more distinctive than the others, that the element ‘international’ was not wholly without importance in the overall impression given by the earlier mark from a phonetic point of view and that, despite a certain similarity between the pronunciation of ‘A+’ and ‘airplus’ in English, the marks at issue were, as a whole, not phonetically similar. By going on to make a similar evaluation, from the conceptual point of view, of the relative importance of the element ‘plus’ of the earlier mark and of the sign ‘+’ of the mark applied for, the General Court again clearly did not err in law in finding, in essence, that the concept denoted by them was frequently used in trade marks and advertising, with the result that there was only a low degree of conceptual similarity between the signs at issue. 33 In so far as, by the second part of its first plea in law, the appellant complains that the General Court neglected to consider the alleged phonetic similarity, in English, between the elements ‘A+’ and ‘airplus’ of the marks at issue, in finding that these were not similar, suffice it to observe that that was an assessment of a factual nature and as such, save where the facts or evidence are distorted – which is not alleged in the present case – not subject to the review of the Court of Justice on appeal (see, to that effect, inter alia, Il Ponte Finanziaria v OHIM, paragraph 38 and the case-law cited). That being so, the present plea is therefore clearly inadmissible. 34 It follows that the first plea in law must be dismissed as being in part clearly unfounded and in part clearly inadmissible. The second plea in law 35 The appellant states, in support of this plea, that, contrary to the conclusion of the General Court in paragraph 51 of the judgment under appeal, the Second Board of Appeal of OHIM in essence infringed Article 8(5) of Regulation No 40/94 by refusing to deal with the application of that provision. The Board of Appeal had been wrong to reject its opposition based on that provision on the ground that the condition of similarity between the signs had not been satisfied. The provision in question merely requires that the relevant section of the public should establish a link between the mark having a reputation and the mark applied for, and the assessment of such a link must take into account all factors relevant to the circumstances of the case. 36 However, it must be recalled that the identity of or similarity between the marks at issue is a necessary precondition of the application of Article 8(5) of Regulation No 40/94 (Gateway v OHIM, paragraph 62, and Calvin Klein Trademark Trust v OHIM, paragraph 68). Consequently, after finding that the signs at issue were neither identical nor similar, the General Court clearly did not err in law in holding that the Second Board of Appeal of OHIM had not infringed that provision. 37 Therefore, the second plea in law must be dismissed as clearly unfounded. The third plea in law 38 By this plea, in essence alleging infringement of Article 73 of Regulation No 40/94, the appellant complains that the General Court held, in paragraph 64 of the judgment under appeal, that the Second Board of Appeal of OHIM was entitled, for reasons of economy of procedure, not to conduct a full examination of the arguments put forward, in particular those relating to the distinctiveness of the earlier mark, which could under no circumstances affect its decision. It submits that that approach, were it to be allowed, would undermine the protection of earlier trade marks that have been used extensively and in which investment has been made in order to prevent their unlawful appropriation. According to the appellant, Article 73 of Regulation No 40/94 should be construed in the light of general principles of law and the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950, which protects property. By failing to take account of its arguments, the Second Board of Appeal of OHIM denied the appellant its right to be heard and breached the duty to provide an impartial and comprehensive statement of reasons. 39 In this connection, as the General Court rightly recalled in paragraphs 59 and 60 of the judgment under appeal, the obligation upon OHIM to state reasons for its decisions, laid down in Article 73 of Regulation No 40/94, has the same scope as that which derives from Article 253 EC, which requires the disclosure, in a clear and unequivocal manner, of the reasoning followed by the institution which adopted the measure in question. That duty has two purposes: to allow interested parties to know the justification for the measure so as to enable them to protect their rights and to enable the Courts of the European Union to exercise their power to review the legality of the decision. 40 That duty can be fulfilled without necessarily responding expressly and exhaustively to all of the arguments put forward. 41 In the present case, the General Court held, in paragraph 63 of the judgment under appeal, that the contested decision disclosed in a clear and unequivocal manner the reasoning followed by the Second Board of Appeal of OHIM. It held in paragraph 64 of the judgment that, since the Board of Appeal had concluded that the signs at issue were dissimilar and that neither Article 8(1)(b) nor Article 8(5) of Regulation No 40/94 applied in this case, and since it had set out clear reasons in support of that conclusion, it was entitled not to conduct a full examination of the remaining arguments which could not affect its decision. In so doing, the General Court clearly did not misconstrue the scope of the duty to state reasons. 42 Furthermore, it should be pointed out that the appellant’s submissions that, in essence, such an approach undermines the protection of trade marks and fundamental rights, in particular the right to property, and that the Second Board of Appeal of OHIM, by ignoring its arguments, denied it its right to be heard and failed to be impartial are lacking in any legal basis. 43 It must, therefore, be held that the third plea in law is clearly unfounded. The fourth plea in law 44 The appellant complains that the General Court dismissed its plea alleging infringement of Article 74 of Regulation No 40/94, holding that the observations presented to the Second Board of Appeal of OHIM by Applus Servicios Tecnológicos were received in time, further to an extension of time duly granted it because of the breakdown of its fax machine. The Board of Appeal cannot, however, grant an extension of time after expiry of a deadline without circumventing the provisions of Article 78 of Regulation No 40/94 relating to resitutio in integrum and exceeding its powers. It was far from clear, contrary to the finding of the General Court, that an extension of time had been granted by the Second Board of Appeal of OHIM. That being so, the Board of Appeal had exceeded the powers conferred on it by Article 74 of Regulation No 40/94. 45 In this connection, it must be observed that, in paragraph 77 of the judgment under appeal, the General Court referred to paragraph 43 of the judgment in Case C‑29/05 P OHIM v Kaul [2007] ECR I-2213 and recalled that Article 74(2) of Regulation No 40/94 grants OHIM a wide discretion to decide, while giving reasons for its decision in that regard, whether or not to take into account facts or evidence which are not submitted in due time by the parties concerned. 46 Nevertheless, in paragraph 78 of the judgment under appeal, the General Court noted that paragraph 23 of the contested decision clearly stated that the observations in question had been received in time, further to an extension of time duly granted by OHIM to Applus Servicios Tecnológicos because the latter’s fax machine had broken down. 47 It must, therefore, be held that the General Court clearly did not err in law in dismissing the plea which the appellant raised before it, given that Article 61(2) of Regulation No 40/94 expressly provides that, in the examination of appeals, the Board of Appeal is to invite the parties, as often as necessary, to file observations, within a period to be fixed by the Board of Appeal, on communications from the other parties or issued by itself. Indeed, since the Second Board of Appeal of OHIM had been able, under that provision, regularly to repeat its invitation to file observations, the General Court was right to deduce from its finding in paragraph 78 of the judgment under appeal that the provisions of Article 74 of Regulation No 40/94 upon which the appellant relied in support of its action could not have been infringed in this case. 48 Consequently, the fourth plea must be dismissed as clearly unfounded. The fifth plea in law 49 In the context of this plea, the appellant states that, contrary to the General Court’s finding on this point, OHIM made a substantial procedural error by omitting to inform it of the change in the proprietor of the Community trade mark application or that Applus Servicios Tecnológicos had become a party to the opposition proceedings. Since there is no express provision concerning the manner in which a change in proprietorship during the course of opposition proceedings is to be dealt with, that amounted to a breach of general principles under Article 79 of Regulation No 40/94. In that the appellant had been deprived of the opportunity of presenting its observations on that change, its right to due process of law had been severely infringed and the proceedings had continued without its consent. 50 In this connection, the General Court noted, in paragraph 86 of the judgment under appeal, that only the name of the owner of the Community trade mark application had changed and that the appellant had not stated how that change had adversely affected its procedural rights. 51 It must therefore be held that, contrary to the appellant’s assertions, the owner of the application did not change during the course of the opposition proceedings; only its name changed. The appellant, who does not claim any distortion of the evidence produced to the General Court in this regard, has also failed to demonstrate to this Court how that change of name adversely affected its procedural rights. 52 The fifth plea must therefore be dismissed as being clearly unfounded. 53 It is apparent from all of the foregoing considerations that the appeal must be dismissed in its entirety as being, in part, clearly unfounded and, in part, clearly inadmissible. Costs 54 Under Article 69(2) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 118 of those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since OHIM has applied for costs and Lufthansa AirPlus Servicekarten has been unsuccessful, the latter must be ordered to pay the costs. On those grounds, the Court (Eighth Chamber) hereby orders: 1. The appeal is dismissed. 2. Lufthansa AirPlus Servicekarten GmbH shall pay the costs. [Signatures] * Language of the case: English.

N. Ray, J. This is an appeal by special leave from the judgment dated 26 May, 1970 of the High Court of Punjab and Haryana companyvicting the appellant Under Section 302 of the Indian Penal Code on two companynts and Under Section 307 of the Indian Penal Code and companyfirming the sentence of death passed on the appellant by the Sessions Court. There were seven accused. All of them were tried for the murderous assault on Charan Singh. The Sessions Court acquitted five accused and one of the accused had died previous thereto. The Sessions Court companyvicted the appellant. It is number necessary to refer to the facts of the prosecution case because Counsel for the appellant raised only two companytentions. First, that the cartridges which were recovered from the spot were number fired from the rifle which was recovered from the possession of the appellant. Secondly, that the number of magazine in the report of the forensic expert was number to be found in the rifle recovered from the possession of the appellant. The recovery of rifle from the possession of the appellant was spoken to by Gurdial Singh, P.W. 6. He went to the police station for securing his gun licence. In his presence the Assistant Sub-Inspector interrogated the appellant then disclosed that he had kept companycealed a rifle under a heap lying in his house. The prosecution witness stated that the appellant was taken to the village Ranivilla. The rifle was recovered from under the heap at the appellants house. Five live cartridges were also recovered along with the rifle. The other material evidence was that of Kartar singh. P.W. 7. He said that two empty cartridges, one live cartridge and one missed cartridge were taken into possession from the roof of the house of accused Baghailsingh. On the Baisakhi day 13 April, 1969, Mangal singh deceased, his brother Buta Singh deceased, his son Gharansingh, his wife Basant Kaur and others were present at his house. Some of those present there returned from Chola Sahib where they had gone to see the Baisakhi fair. In the twilight they heard some shouts and abuses. Mangal Singhs son saw the appellant armed with a rifle, and the other accused armed with weapons and arms. Accused Hardial Singh and Baghail Singh were standing on the roof of verandah which adjoined the house of Mangal Singh. Finding that the other accused companyld number enter the house of Mangalsingh as the door was closed, accused Baghail Singh and Harbans Singh shouted to the other accused to companye to the roof. The appellant and Mota Singh went to the roof of Baghail Singh. Charansingh, Mangalsingh, Mohindersingh, Butasingh and Gurdial Singh requested the appellant number to be aggressive. The appellant fired which hit Charan singh, The appellant fired again and hit Butasingh, The appellant fired yet another shot that hit Mangal Singh. Buta Singh and Mangalsingh died and Charansing was badly injured. The Sub-Inspector of Police who prepared the inquest report took into possession blood-stained earth from the spot and from the roof of Baghail Singhs house he picked up two empty-cartridges one missed cartridge and one live cartridge. The cartridges were sent to the Forensic Science Laboratory. There is the evidence of Dr. J.K. Sinha and his report is marked Exhibit P. 21. He said that two sealed parcels were received in the laboratory on 12 May, 1969. One of the sealed parcels companytained one 303 bore rifle marked A by him. That is the rifle received from the appellant. The second sealed parcel companytained two SOS fired crime cartridge cases and one 303 missed cartridge. His evidence was that the two fired crime cartridges had been fired through the 303 rifle. His opinion about the missed cartridge was that the firing impression of the 303 rifle marked A. He examined the two fired test cartridges He also examined the test cartridges under a companyparison microscope for individual characteristic markings present on them. He companypared the same with individual characteristic markings present on the fired or crime cartridges. On companyparison he found that the firing pin marks present on the test cartridges tallied with the firing pin marks present on the crime cartridges in their individual characteristics. Dr. Sinha said that the fired cartridges were fired through the rifle marked A and companyld number have been fired from any other rifle even of the same make and bore because every firing pin has its own individuality. He took photomicrograph which showed some of the similar individual characteristics. The rifle was under a sealed companyer. It was opened in this Court. The magazine chamber was found to have the same number as in the report Exhibit P. 10. The submission on behalf of the appellant that there was difference between the number of the rifle in the magazine chamber and in the report was therefore number acceptable. The entire evidence was rightly believed by the High Court.

FIFTH SECTION CASE OF CHERVONENKO v. RUSSIA (Application no. 54882/00) JUDGMENT STRASBOURG 29 January 2009 FINAL 06/07/2009 This judgment may be subject to editorial revision. In the case of Chervonenko v. Russia, The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of: Peer Lorenzen, President,Rait Maruste,Karel Jungwiert,Anatoly Kovler,Renate Jaeger,Mark Villiger,Zdravka Kalaydjieva, judges,and Claudia Westerdiek, Section Registrar, Having deliberated in private on 6 January 2009, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 54882/00) 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 Filipp Viktorovich Chervonenko (“the applicant”), on 17 January 2000. 2. The applicant, who had been granted legal aid, was represented by Ms K. Kostromina and Ms K. Moskalenko, lawyers practising in Moscow. The Russian Government (“the Government”) were represented by Mr P. Laptev and Ms V. Milinchuk, former Representatives of the Russian Federation at the European Court of Human Rights. 3. The applicant alleged, in particular, that the supervisory review conducted in the present case had violated his rights under Article 6 of the Convention and Article 4 of Protocol No. 7 to the Convention. 4. By a decision of 25 September 2006, the Court declared the application partly admissible. 5. The Government, but not the applicant, filed further written observations (Rule 59 § 1). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 6. The applicant was born in 1958 and lives in Moscow. 7. On 2 June 1996 the applicant had a quarrel with his neighbours and stabbed one of them with a screwdriver causing him fatal injury. On an unspecified date criminal proceedings were instituted against the applicant. He was charged under Article 108 § 2 of the RSFSR Criminal Code (Уголовный кодекс РСФСР) with “deliberate infliction of physical injury leading to the victim’s death”. 8. On 29 September 1997 the Kuntsevskiy District Court of Moscow examined the case at first instance. It requalified the applicant’s actions and found him guilty of “murder committed in circumstances where excessive force was used in self-defence” under Article 108 § 1 of the newly enacted Criminal Code of the Russian Federation (Уголовный кодекс РФ), which had entered into force on 1 January 1997. The court sentenced the applicant to a prison term of one year and eight months, which was calculated from 15 September 1996, when he was detained pending trial. 9. On 27 November 1997 the Moscow City Court upheld the judgment of 29 September 1997 at final instance. 10. While serving his sentence the applicant attempted to institute supervisory review proceedings against these decisions. His request was rejected by the Vice-President of the Moscow City Court on 2 March 1998. 11. In May 1998 the applicant was released after having served his sentence. 12. On 8 October 1998 the Vice-President of the Supreme Court of Russia lodged an application for supervisory review (протест в порядке надзора) of the court decisions of 29 September and 27 November 1997. In the application it was stated that although he had been indicted under Article 108 § 2 of the old Criminal Code, the applicant had been tried and convicted under a different provision, namely, Article 108 § 1 of the new Criminal Code. The new charge, as it was further argued, was more serious than the original charge as it implied, unlike the first one, an intention to cause death. However, Article 254 of the Code of Criminal Procedure (Уголовно-процессуальный кодекс РСФСР) prevented the trial court from amending charges unless it was to the benefit of the accused. 13. On 22 October 1998 the Presidium of the Moscow City Court granted the application for supervisory review. The Presidium decided to quash the court decisions on the grounds put forward in the application and to remit the case for a new examination at first instance. 14. On 16 July 1999 the Kuntsevskiy District Court found the applicant guilty under Article 108 § 2 of the old Criminal Code of “deliberate infliction of physical injury leading to the victim’s death”. The court sentenced the applicant to a prison term of six years. In deciding the actual term to be served, the court deducted from this period the prison term of one year and eight months already served by the applicant. On the same day the applicant started serving the remainder of the prison sentence. 15. On 31 August 1999 the Moscow City Court upheld the judgment of 16 July 1999 at final instance. 16. On 28 December 1999 the Vice-President of the Supreme Court of Russia lodged an application for supervisory review of the court decisions of 16 July and 31 August 1999. The application sought to have the case remitted for a new court examination. 17. On 27 January 2000 the Presidium of the Moscow City Court decided to grant the application. The Presidium found that: “... the sentence was quashed by the decision of the Presidium of the Moscow City Court of 22 October 1998 ... on the grounds that Article 254 of the Code of Criminal Procedure had been violated as the court qualified [the applicant’s] actions under a provision under which he had not been indicted, thus violating [the applicant’s] right to defence ... In accordance with Article 353 of the Code of Criminal Procedure, the imposition of a more severe penalty or application of a more serious criminal law on a new examination of a case at first instance [after it has been remitted by the appellate court] is allowed only if the initial sentence was quashed upon the prosecutor’s appeal ... on the grounds of an excessively lenient penalty ... Therefore, in the new examination of the case the court was not allowed to qualify [the applicant’s] actions under a more serious provision and impose a more severe penalty than initially imposed ...” 18. The Presidium decided once again to quash the court decisions and to remit the case for a new examination at first instance. It ordered the applicant to be released. 19. On 30 August 2000 the Kuntsevskiy District Court of Moscow examined the charges against the applicant and found him guilty under Article 111 of the old Criminal Code of “inflicting serious injuries in circumstances where excessive force was used in self-defence”. The court sentenced him to ten months’ imprisonment. Taking into account the prison terms already served, the court concluded that the punishment had already been executed. 20. No appeal was lodged against the judgment of 30 August 2000, which became final. II. RELEVANT DOMESTIC LAW A. Criminal Code 21. The RSFSR Criminal Code of 1960 provided that deliberate infliction of physical injury leading to the victim’s death was punishable by five to twelve years’ imprisonment. Article 111 provided that infliction of serious injuries in circumstances where excessive force was used in self-defence was punishable by up to one year’s imprisonment. 22. The Criminal Code of the Russian Federation, in force since 1 January 1997, provides that murder committed in circumstances where excessive force was used in self-defence is punishable by up to two years’ imprisonment (Article 108 § 1). The Code provides that criminal liability and the applicable penalty are determined by the law in force at the time of commission of the criminal act and that retrospective application of a law or penalty is not permissible unless it is to the advantage of the accused (Articles 8 and 9). B. Code of Criminal Procedure 23. Article 254 of the 1960 Code of Criminal Procedure (Уголовно-процессуальный кодекс РСФСР), applicable at the relevant time, provided that a case was examined in court only on the charge put before the court. The charge could be amended by the court provided that this did not worsen the defendant’s situation and did not violate his or her right to defence. 24. Section VI, Chapter 30, of the Code regulated the supervisory review procedure which allowed certain officials to challenge a judgment, which had entered into force, and have the case reviewed on points of law and procedure. The supervisory review procedure is to be distinguished from proceedings which review a case because of newly established facts. 25. Pursuant to Section 356 a judgment entered into force and was subject to execution as of the day when the appeal (cassation) instance issued its judgment. 26. Section 371 provided that the power to lodge an application for a supervisory review (an extraordinary appeal) may be exercised by the President and Vice-Presidents of the Supreme Court of Russia, the Prosecutor General and his Deputies, in respect of any judgment other than those of the Presidium of the Supreme Court, and by the Presidents of the regional courts in respect of any judgment of a regional or subordinate court. A party to criminal or civil proceedings may solicit the intervention of such officials for a review. 27. Section 373 laid down a limitation period of one year during which an application calling for the supervisory review of a conviction judgment could be brought, if such an application sought a harsher penalty. The same limitation period applied to an application brought against an acquittal. It ran from the day when the conviction or the acquittal entered into force. 28. According to Sections 374, 378 and 380, the application for supervisory review was considered by the presidium of the relevant court which examined the case on the merits, not being bound by the scope and grounds of the application. The presidium could either dismiss the application and thus uphold the earlier judgment, or grant the application. In the latter case it had to decide whether to quash the judgment and terminate the criminal proceedings, to remit the case for a new investigation, or for a new court examination at any instance, to uphold a first instance judgment reversed on appeal, or to amend and uphold any of the earlier judgments. 29. Section 382 provided that imposition of a graver punishment or application of a harsher criminal law in the examination of a case at first instance was allowed only if the initial sentence had been quashed upon supervisory review on the grounds seeking imposition of a graver penalty. THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AND OF ARTICLE 4 OF PROTOCOL No. 7 TO THE CONVENTION 30. The applicant alleged a violation of the guarantees provided for in Article 6 of the Convention and Article 4 of Protocol No. 7 to the Convention which read, in so far as relevant, as follows: Article 6 of the Convention “In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...” Article 4 of Protocol No. 7 “1. No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State. 2. The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case.” A. The parties’ submissions 31. The applicant claimed that he had been tried and convicted twice for the same criminal offence because he had had to return to prison after the first set of supervisory-review proceedings amending the charges against him, although he regarded his sentence as having been served in full. He also considered that the manner in which the courts had dealt with his case was contrary to the principle of legal certainty. He alleged that he had lodged a request for supervisory review because he expected the supervisory instance to establish that the judgment against him had been unlawful and acquit him of all charges. He could not have foreseen that it might entail detrimental consequences for himself, such as aggravation of the charge or extension of the sentence. He considered that the criminal proceedings, taken overall, had been conducted with gross unfairness and numerous procedural irregularities. 32. The Government contested the applicant’s allegations. They relied on Article 4 § 2 of Protocol No. 7, which expressly permitted the reopening of a criminal case if there had been a fundamental defect in the previous proceedings that might affect the outcome of the case. They claimed that the supervisory review in the present case fell within the scope of that provision. They pointed out that both sets of supervisory review were called for on the grounds of a fundamental defect in the previous proceedings which were detrimental to the applicant’s rights and which could affect the outcome of the case. They further submitted that the resulting judicial decision – the judgment of 30 August 2000 – had remedied the serious defects in both previous sets of proceedings and restored the applicant’s fundamental rights. Moreover, it had reduced the applicant’s sentence and apparently satisfied the applicant because he had lodged no appeal against it. They stated that any violation that had taken place in the criminal proceedings against him had been remedied by the subsequent quashing of the erroneous judgments. B. The Court’s assessment 33. The Court has previously examined cases raising complaints under the Convention in relation to the quashing of a final judicial decision (see Nikitin v. Russia, no. 50178/99, ECHR 2004-VIII; Bratyakin v. Russia (dec.), no. 72776/01, 9 March 2006; Fadin v. Russia, no. 58079/00, 27 July 2006; and Radchikov v. Russia, no. 65582/01, 24 May 2007). It reiterates that the mere possibility of reopening a criminal case is prima facie compatible with the Convention, including the guarantees of Article 6. However, the actual manner in which it is used must not impair the very essence of a fair trial. In other words, the power to reopen criminal proceedings must be exercised by the authorities so as to strike, to the maximum extent possible, a fair balance between the interests of the individual and the need to ensure the effectiveness of the system of criminal justice (see Nikitin, cited above, §§ 54-61). In the specific context of supervisory review, the Convention requires that the authorities respect the binding nature of a final judicial decision and allow the resumption of criminal proceedings only if serious legitimate considerations outweigh the principle of legal certainty (see Bratyakin, cited above). 34. The Court further notes that the complaints in the present case are different from those examined in the above-cited cases in that they do not concern the acts of quashing – which the applicant had each time solicited himself – but the manner in which the decisions to reopen the case, particularly the first one, were transposed in the ensuing judicial proceedings. 35. The Court is prepared to accept that granting supervisory review was justified both times by what appears to have constituted a “fundamental defect in the previous proceedings” and was brought in the applicant’s own interest. The first round of the retrial was intended to amend the charges so as to prevent the applicant from being convicted of a more serious offence than the one he had been indicted for. The supervisory review was thus granted on the assumption that the defect of the previous proceedings would be rectified for the applicant’s advantage only. The grounds for the second reopening were also valid and reasonable, namely, to rectify a violation of the applicant’s procedural rights in the second set of proceedings. However, the Court considers that the system of reopening of criminal case by means of extraordinary remedy should not function on the assumption that the procedure remains open-ended with a “final judgment” always amenable to modifications and reversals, a situation which would run counter to the very principles of res judicata and legal certainty 36. The Court notes that the judgment of 16 July 1999, as well as the appeal decision of 31 August 1999 ran contrary to the principle of legal certainty which is inherent in Article 6 § 1 of the Convention and which, in the circumstances of the present case, required the subordinate court to respect the purpose of the quashing of a final and binding judgment and the scope of the new examination defined by the superior court. By not pursuing the superior court’s instructions these judicial instances also encroached on the domestic statutory protection against reformatio in peius to which the applicant was entitled since the review was called for on the grounds of his interests. Moreover, the failure to do so necessitated the second set of supervisory review which involved yet another quashing of a final judicial decision. 37. The Court observes that the Government accepted that the first supervisory review, although initiated for the applicant’s benefit, resulted in what they called “a gravely unfair decision violating his rights and unlawfully extending his sentence”. However, the Government claimed that the second round of supervisory proceedings put matters right ensuring that the applicant was brought to justice without being deprived of the procedural guarantees prescribed by law. They contended that the second quashing effectively resolved the flagrant mistakes committed during the first round of retrial. However, in so far as they may be understood as claiming the loss of the victim status by the applicant after the second quashing, 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 Dalban v. Romania [GC], no. 28114/95, § 44, ECHR 1999-VI). While the authorities in the present case indeed acknowledged a violation of the applicant’s rights in the first set of re-trial, the Court considers that the second set of re-trial was insufficient by itself to eliminate the adverse effects of the quashed decisions, but that the notion of “redress” required some form of tangible compensation. It notes that the applicant served six months in excess of his original prison sentence. In the absence of any submissions by the parties concerning the possible avenues provided for in the domestic law for claiming compensation in respect of these periods, the Court cannot but observe that, as matters stand, no compensation has been paid to the applicant for the violation of the applicant’s right in the first trial. In such circumstances it concludes that the criminal proceedings against the applicant, taken as a whole, did not satisfy the requirements of a “fair hearing” guaranteed by Article 6 of the Convention. 38. As regards the applicability of Article 4 of Protocol No. 7 to supervisory-review proceedings, in the Nikitin case cited above the Court found as follows: “46. The Court notes that the Russian legislation in force at the material time permitted a criminal case in which a final decision had been given to be reopened on the grounds of new or newly discovered evidence or a fundamental defect (Articles 384-390 of the Code of Criminal Procedure). This procedure obviously falls within the scope of Article 4 § 2 of Protocol No. 7. However, the Court notes that, in addition, a system also existed which allowed the review of a case on the grounds of a judicial error concerning points of law and procedure (supervisory review, Articles 371-383 of the Code of Criminal Procedure). The subject matter of such proceedings remained the same criminal charge and the validity of its previous determination. If the request was granted and the proceedings were resumed for further consideration, the ultimate effect of supervisory review would be to annul all decisions previously taken by courts and to determine the criminal charge in a new decision. To this extent, the effect of supervisory review is the same as reopening, because both constitute a form of continuation of the previous proceedings. The Court therefore concludes that for the purposes of the ne bis in idem principle supervisory review may be regarded as a special type of reopening falling within the scope of Article 4 § 2 of Protocol No. 7.” 39. The Court observes that the judgment of 29 September 1997 of the Kuntsevskiy District Court of Moscow, which became final after the applicant’s appeal was rejected by the Moscow City Court on 27 November 1997, had been quashed on the grounds of serious procedural defects and that the case was reconsidered by two judicial instances, which delivered the final judgment. The latter judgment was subsequently quashed, also on the grounds of a serious procedural violation. As in the Nikitin case and other cases cited above, the subject matter of the new sets of proceedings consisted of the same criminal charge and the validity of its previous determination. Having regard to the above findings, the Court concludes that the supervisory review in the instant case constituted a reopening of the case owing to a fundamental defect in the previous proceedings, within the meaning of Article 4 § 2 of Protocol No. 7. Accordingly, the complaint raises no issues under Article 4 § 1 of Protocol No. 7 separate from that under Article 6 of the Convention (see Bratyakin, cited above, and Savinskiy v. Ukraine (dec.), no. 6965/02, 31 May 2005). 40. Therefore, the Court finds a violation of Article 6 § 1 of the Convention and finds that the applicant’s complaints raise no separate issue under Article 4 of Protocol No. 7 to the Convention. II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 41. 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 42. The applicant claimed 100,000 United States dollars in respect of non-pecuniary damage. 43. The Government contested the claim as excessive and considered that any finding by the Court of a violation would constitute sufficient just satisfaction in the present case. 44. The Court considers that the applicant must have suffered distress and frustration as a result of the harsher penalty imposed in the criminal proceedings following the supervisory review. Making its assessment on an equitable basis, it awards the applicant 2,000 euros for non-pecuniary damage, plus any tax that may be chargeable on that amount. B. Costs and expenses 45. The applicant did not submit any claims for costs and expenses. Accordingly the Court is not required to make any award under this head. C. Default interest 46. 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. Holds that there has been a violation of Article 6 of the Convention; 2. Holds that no separate issue arises under Article 4 of Protocol No. 7 to 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 2,000 (two thousand euros) in respect of non-pecuniary damage, 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 on that amount; (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 29 January 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Claudia WesterdiekPeer LorenzenRegistrarPresident

Opinion of Mr Advocate General Mancini delivered on 11 February 1988. - Hauptzollamt Hamburg-Jonas v Firma P. Krücken. - Reference for a preliminary ruling: Bundesfinanzhof - Germany. - Export refund - monetary compensatory amount - Advance fixing. - Case 316/86. European Court reports 1988 Page 02213 Opinion of the Advocate-General ++++ Mr President, Members of the Court, In proceedings between the Hauptzollamt ( Principal Customs Office ) Hamburg-Jonas and the company P . Kroecken of Mannheim, the Bundesfinanzhof ( Federal Finance Court ) seeks a ruling on the provisions relating to export certificates for cereals, in respect of which the refund and the monetary compensatory amount (" MCM ") have been fixed in advance . The questions relate in particular to Article 16 ( 4 ) of Council Regulation No 2727/75 of 29 October 1975 on the common organization of the market in cereals ( Official Journal 1975 281, p . 1 ) and to Article 2 ( 3 ) of Commission Regulation No 243/778 of 1 February 1978 ( Official Journal 1978 L 37, p . 5 ) which provides for the advance fixing of monetary compensatory amounts and at the same time limits the territorial validity of export certificates . The national court wishes to know whether that limitation prevents the grant of the refund at the rate fixed in advance where the goods are exported from a Member State other than that indicated when the certificate was issued . In the event of an affirmative answer, the Bundesfinanzhof asks whether, by virtue of the principle of the protection of legitimate expectations the refund must in special circumstances be granted to the exporter at the rate fixed in advance in any case . In May 1979 the company P . Kroecken (" Kroecken ") exported 1 250 tonnes of barley originating in France from the Federal Republic of Germany to Switzerland . The goods had been purchased from the French company Unifrex, which had transferred to Kroecken an extract from the export certificate relating to that consignment . The extract, which showed advance fixing of the export refund and of the MCM and bore the endorsement "valable en France", had been issued by the competent French authority, the Office national interprofessionnel des céréales ( ONIC ) to the French company Ramel, which in turn had assigned it to Unifrex . Initially that endorsement prompted the German customs officer at Idar-Oberstein to express doubts as to whether the export could be effected on the basis of an extract of the kind produced to him . Kroecken' s forwarding agent ( SGS Control GmbH of Mannheim ), however, drew his attention to Article 16 ( 3 ) of Commission Regulation No 193/75 of 17 January 1975 ( Official Journal 1975 No L 25, p . 10 ) according to which "certificates and extracts properly issued ... by the authorities of a Member State shall in each of the other Member States have the same legal effects as attach to (( national )) documents"; and the officer - either because he was convinced by the arguments put to him or because the export document showed that the goods were bound for Switzerland - withdrew his objections and proceeded to complete the formalities . However, his decision was not upheld by the customs authorities at a higher level . By order of 7 August 1979, made pursuant to Article 2 ( 3 ) of Regulation No 243/78 which restricts the validity of an export certificate to the Member State indicated in the application by the person concerned, the Hauptzollamt Hamburg-Jonas refused to accept the document produced by Kroecken as valid; consequently it paid Kroecken the MCM at the rate ruling when the goods were cleared through customs and not at the rate fixed in advance on the certificate . Kroecken reacted by submitting a complaint to the administrative authority and thereafter by instituting proceedings before the Finanzgericht ( Finance Court ) Hamburg . That court upheld its claim, observing that the limitation of the territorial validity of an export certificate recording advance fixing of the MCM affected only the latter and not the export refunds, the amount of which was the same in all the Member States . This led to an appeal on a point of law brought before the Bundesfinanzhof by the Hauptzollamt Hamburg-Jonas . By an interlocutory decision ( of 4 February 1986 ) that court held that the grant of the refund at the rate fixed in advance on the certificate was not conditional upon the territorial validity of that document; but subsequently, acceding to a request made by the appellant customs authority, it decided, by order of 29 October 1986, to stay the proceedings and refer the following questions to the Court for a preliminary ruling : ( a ) Does it follow from Community law ( Article 2 ( 3 ) of Commission Regulation ( EEC ) No 243/78, Article 16 ( 4 ) of Regulation ( EEC ) No 2727/75 of the Council ) that the advance fixing of an export refund contained in a licence submitted at the time of export is not applicable for the purposes of determining the export refund applicable to goods exported from a Member State if the licence ( which also contains an advance fixing of the monetary compensatory amount ) stipulates that it is valid for another Member State? ( b ) If so, is it possible in certain circumstances to apply the principle of the protection of legitimate expectations in such a case, with the result that the advance fixing of the export refund should none the less be applied? Finally, I should point out that in these proceedings written observations were submitted by the parties to the appeal before the national court, and by the Commission of the European Communities . The latter and Kroecken also presented oral argument at the hearing . For a better understanding of the facts which I have just outlined and of the problems on which the Court must give a ruling it is appropriate to give a summary of the Community legislation at issue ( but see also in that connection the article entitled "Le régime juridique des certificats d' importation, d' exportation et de préfixation" by Defalque in Revue trimestrielle de droit européen, 1984, p . 61 et seq .). As is well known, import and export certificates - that is to say the documents relied upon by the Community authorities for precise details of patterns of trade in agricultural products - were introduced by the various basic regulations on the common organization of the markets ( in the case of cereals, see Article 12 of Council Regulation No 2727/75 of 29 October 1975 ). In 1970 the Commission considered that it was appropriate to apply a number of common rules to them and for that purpose it issued Regulation No 1373/70 of 10 July 1970 ( Official Journal, English Special Edition 1970 ( II ), p . 439 ), later replaced by Regulation No 193/75 of 17 January 1975, cited earlier . Further measures were adopted subsequently; as a result, consolidation was necessary and this was achieved by the adoption of Regulation No 3183/80 of 3 December 1980 ( Official Journal 1980 L 338, p . 1 ) which is still in force . Within that complex of rules, the following points are relevant to the present case : ( a ) for every export to a non-member country it is necessary to produce a certificate which authorizes it and at the same time makes it obligatory ( Article 12 ( 1 ) of Regulation No 2727/75 and corresponding provisions for the other markets governed by common rules; Article 2 ( 1 ) of Regulation No 193/75; and Article 8 ( 1 ) of Regulation No 3183/80; ( b ) if the export refund is fixed in advance, the amount thereof is indicated on the certificate ( Article 12 ( 1 ) of Regulation No 2727/75; Article 2 ( 1 ) of Regulation No 193/75; and Article 8 ( 2 ) of Regulation No 3183/80; ( c ) it is possible to obtain extracts from certificates : they produce the same legal effects as certificates but only in respect of the quantity of goods for which they are issued ( Article 10 ( 2 ) of Regulation No 193/75 and Article 10 of Regulation No 3183/80 ); ( d ) certificates and extracts duly issued by the authorities in one Member State are valid throughout the Community and in the other Member States they produce the effects attaching to the equivalent national documents ( third subparagraph of Article 12 ( 1 ) of Regulation No 2727/75; Article 16 ( 3 ) of Regulation No 193/75; and Article 11 of Regulation No 3183/80 ). Let us now consider the advance fixing of MCMs . As is well known, they were introduced for the first time in 1969 and were applied generally by Regulation No 974/71 of the Council of 12 May 1971 ( Official Journal, English Special Edition 1970 ( I ), p . 257 ). The possibility of fixing them in advance was introduced in order to guarantee traders the required certainty in view of the frequent variations to which the MCMs were subject; this was done - albeit only for the purposes of trade with non-member countries - by Commission Regulation No 243/78 of 1 February 1978 ( subsequently replaced by Regulation No 1160/82, Official Journal 1982 L 134, p . 22, which in turn was re-cast in Regulation No 3155/85 of 11 November 1985, Official Journal 1985 L 310, p . 22 ). The second subparagraph of Article 2 ( 1 ) of that regulation provides that the amount may be fixed in advance only if the export refund is fixed at the same time . Moreover, in order to prevent speculative manoeuvres, Article 2 ( 3 ) provides that "where the monetary compensatory amount is fixed in advance the certificate and ... extracts therefrom shall be valid in only one Member State" and that the Member State must be designated "by the applicant on submission of the application for the advance fixing ...". The problem of coordination with other Community measures underlying the present case derives precisely from that provision . At this point I cannot fail to point out that Kroecken and the Commission conducted a detailed debate at the hearing concerning the validity of Article 2 ( 3 ) of Regulation No 243/78 in so far as it imposes a territorial limitation upon the validity of the certificates . As the Court is aware, that question was not raised by the Bundesfinanzhof; but it has now been established beyond doubt in decisions of this Court that it is legitimate for the Court to deal with problems of that kind even where the issue has not been raised by the national court . That principle was laid down for the first time in the Court' s judgment of 1 December 1965 in Case 16/65 C . Schwarze v Einfuhr - und Vorratsstelle foer Getreide und Futtermittel (( 1965 )) ECR 877 : "If it appears that the real purpose of the questions submitted by the national court is concerned rather with the validity of Community measures, it is appropriate for the Court to inform the national court at once of its view without compelling the national court to comply with purely formal requirements which would uselessly prolong the procedure under Article 177 and would be contrary to its very nature . Although this type of adherence to formal requirements may be defended in the case of litigation between two parties whose mutual rights must be subject to strict rules, it would be inappropriate to the special field of judicial cooperation under Article 177 which requires the national court and the Court of Justice ... to make direct and complementary contributions to the working out of a decision" ( p . 886 ). The Court' s subsequent pronouncements were no less significant . Thus, in its judgment of 3 February 1977 in Case 62/76 Strehl v Nationaal Pensioenfonds voor Mijnwerkers (( 1977 )) ECR 211, the Court, although requested to interpret Article 46 ( 3 ) of Regulation No 1408/71 and Decision No 91 of the Administrative Commission for Migrant Workers, considered by way of preliminary whether those measures were lawful and in fact declared them invalid . Then came the judgment of 13 December 1979 in Case 44/79 Hauer v Land Rheinland-Pfalz (( 1979 )) ECR 3727 . As requested, the Court interpreted Regulation No 1162/76 concerning wine-growing; but, in order to dispel the national Court' s doubts as to the compatibility of that interpretation with the protection of fundamental rights, it appraised the lawfulness of the measures in question in the light of those rights . Finally, in paragraph 7 of the judgment of 15 October 1980 in Case 145/79 Roquette Frères v French State,Customs Administration (( 1980 )) ECR 2917, the Court stated "Although, within the framework of the distribution of tasks between the national courts and the Court of Jstice for the implementation of Article 177 ... it is for the national courts to decide the relevance of the questions which are referred to the Court of Justice, it is for the Court of Justice to extract from all the information provided ... those points of Community law which, having regard to the subject-matter of the dispute, require interpretation or whose validity requires appraisal ". Of the dicta to which I have referred, perhaps the last is the most important, even though it might perhaps be observed that it was anticipated twice, in the judgments of 18 February 1964 in Joined Cases 73 and 74/63 NV Internationale Crediet - en Handelsverening Rotterdam and Others v Minister van Landbouw en Visserij (( 1964 )) ECR 1, and of 29 November 1978, in Case 83/78 Pigs Marketing Board v Redmond (( 1978 )) ECR 2347 ( paragraphs 25 and 26 ). The Court in fact no longer seeks in the wording of the question or the grounds thereof a reason for concluding that the national court, although purporting to ask merely interpretative questions, is in fact looking for a decision as to the validity of the Community measure at issue . The problem of validity is now examined on the Court' s own initiative purely on the basis of the documents before it . Let us now consider the present case . If the Court were to decline to examine the validity of Article 2 ( 3 ) of Regulation No 243/78 merely because the national court did not ask it to do so, Kroecken, which raised the matter at the hearing, would certainly raise it again before the same national court, and, being a court of last instance, the latter would be obliged to submit a question on it to the Court under the third paragraph of Article 177 . From the formal point of view such a course of action would be beyond reproach, but it would also run counter to the principle that legal proceedings should not be needlessly prolonged and to the need to ensure the utility of the preliminary-rulings procedure . So the question now is whether Article 2 ( 3 ) of Regulation No 243/78 is valid . Kroecken criticizes it on three counts, two of which relate to the infringement of legal provisions ( specifically, the third subparagraph of Article 12 ( 1 ) of Regulation No 2727/75 of the Council and Article 16 of Commission Regulation No 193/75 ) and the third relates to breach of the principle of proportionality . I shall consider them in that order . The first provision allegedly infringed states that "the import or export licence shall be valid throughout the Community ". According to the German company, Regulation No 243/78 makes an exception to that rule for which the Commission had no authority . The Commission on other hand considers that it was authorized for that purpose by two provisions : on the one hand, Article 12 ( 2 ) of Regulation No 2727/75 itself, which empowers it to fix the period of validity of licences and "other detailed rules for the application" of the system under the Management Committee procedure ( see Judgment of 26 June 1980 in Case 808/79 Pardini (( 1980 )) ECR 2103, paragraph 16 ); on the other hand, Article 6 ( 1 ) of Regulation No 974/71, cited earlier . That provision too entrusted the Executive with determination of the detailed rules for implementation of the regulation under the Management Committee procedure; but it also provided that such authority may entail "other derogations" from the regulations on the common agricultural policy . Of the two views put forward, I prefer that of the Commission, at least in so far as it is based on Regulation No 974/71 . The rules on MCMs, of which that regulation forms part, must in fact be regarded as constituting a lex specialis in relation to the measures establishing the common market organizations : and, by referring to "other derogations", the provision relied upon by the Commission furnishes incontestable proof of its status as such . By limiting the territorial validity of export certificates showing advance fixing of the MCM, the Commission thus lawfully exercised the power vested in it by Article 6 ( 1 ) of Regulation No 974/71 . No more acceptable is the second criticism, to the effect that Article 2 ( 3 ) of Regulation No 243/78 infringes Article 16 of Commission Regulation No 193/75, which attributes to certificates issued by the authorities in one Member State the effects attaching to the corresponding national documents . Both provisions emanate from the same source and it is obvious that the author is free to derogate from a rule which it adopted at an earlier stage . In the third place, Kroecken complains of infringement of the principle of proportionality . The limitation imposed on the validity of the certificate is, it contends, not strictly necessary for the attainment of the aims - in particular that of preventing speculation - which the Commisison intended to pursue . That complaint must likewise be rejected . As is well known, the advance fixing of MCMs raises the problem - a new problem, but one which was soon noticed by the legislature ( see the third and fifth recitals in the preamble to Regulation No 243/78 ) - of avoiding abuses for speculative ends; more specifically, that of ensuring that exporters in countries with weak currencies do not gamble on currency fluctuations occurring after the issue of the certificate, by exporting from that Member State which at the relevant time guarantees the best exchange rate . Now it seems to me that in order to satisfy that requirement there was only one possibility open to the Commission : that of limiting the territorial validity of certificates showing the advance fixing of the MCM to a single Member State, although allowing the trader concerned to specify which . Furthermore, it was recognized in the Pardini judgment to which I referred earlier that "the system of advance fixing ... was created in the interests of trade and ... in normal cases gives traders considerable benefits . If by requesting advance fixing traders take advantage of those benefits, it is ... just that they should bear the disadvantages which arise from the necessity, on the part of the Community, of preventing any abuse" ( paragraph 21 ). I shall return to this matter when answering the first question . At this stage I need merely point out that the discretionary power vested in the Commission by the applicable rules is certainly quite wide . I would add, inter alia in the light of the Pardini judgment, that the Commission exercised it for a purpose which might be described as being required of it and in any event was in conformity with the principle of proportionality . Having established the validity of Article 2 ( 3 ) of Regulation No 243/78 I must now consider the questions . It will be remembered that the Bundesfinanzhof asks the Court first of all to establish whether the limitation imposed by that provision on the territorial validity of export certificates showing advance fixing of the MCM extends to the advance fixing of export refunds also recorded on them . The answer suggested to the Court by Kroecken is of course that it does not . Kroecken starts by saying that it is necessary to distinguish between the export certificate contemplated in the provision at issue, the certificate showing advance fixing of the refund and the certificate showing advance fixing of the MCM . Particularly clear support for that distinction is to be found in the German text of that provision; and, whilst it is undeniable that the third recital in the preamble to the regulation allows the advance fixing of MCMs only where the levy or refund has also been fixed in advance, it is also true that the fifth recital is concerned solely with limiting the "Gultigkeitsdauer" of a certificate to the territory of a single Member State . That restriction relates therefore only to the period of validity : that being inter alia the wording used in the fourth recital in the French version of the measure . The conclusions to which the foregoing considerations lead are obvious : the three certificates represent distinct administrative acts and certainly cannot be regarded as forming a single whole because they are contained in the same document . There is thus nothing to prevent them from being subject to different rules and, in particular, there is nothing to prevent the limitation of territorial validity imposed with respect to MCMs from not being applied to the export refund system . Moreover, that view is expressed in the judgment of 8 April 1976 in Case 106/75 Merkur-Aussenhandel GmbH (( 1976 )) ECR 531, according to which the entitlement to the refund subsists even if the product exported is not the one for which the certificate was issued . Underlying that principle is an acknowledgment of the difference between the aims pursued by the rules on certificates and the rules on refunds : the first seek to offer the Community a means of forecasting movements of goods and the second is intended to offset the difference between Community prices and those prevailing on the world market . The opposite view is taken by the Hauptzollamt and the Commission . In their opinion the distinction advocated by Kroecken has no foundation : the three documents form a single and inseparable administrative measure, and for that reason the limitation imposed upon its validity must be taken to refer to all the effects which it is capable of producing . I associate myself with the latter view . Admittedly, as often happens with secondary law, certain problems are raised by the fact that the language versions of Article 2 ( 3 ) of Regulation No 243/78 do not coincide exactly . In the French, Italian and Dutch versions, for example, the measure which authorizes the export and that which fixes the refund and the MCM in advance are described by the same term "certificat", "certificato" and "certificaat "). By contrast, the German, English and Danish versions use different words "Lizenz" and "Bescheinigung", "licence" and "certificate" and "licence" and "attest "). Moreover, whilst in the German and Danish versions the limitation of territorial validity is linked to the "Lizenz" or "licens", in the English version it is linked to the "certificate ". It is thus understandable why Kroecken relies upon the German version : that version makes it appear certain that the limitation does not relate to advance fixing of the refund . As I said earlier, however, that conclusion is supported only by the Danish text . And it is contradicted by a decisive observation made by the Commission : Article 1 of Regulation No 193/75 ( now 3183/80 ) gives a definition of "licences" ( in German "Lizenzen ") which covers both those relating to exports (" Ausfuhrlizenzen ") and those relating to advance fixing (" Vorausfestsetzungsbescheinigungen "). The term thus has a generic meaning : and that makes it possible without difficulty to interpret Article 2 ( 3 ) of Regulation No 243/78 as meaning that, where the MCM is fixed in advance, the limit laid down thereby applies to all the certificates contained in the customs document . The view which I prefer is also supported by a number of considerations of legislative policy . As is apparent from the Pardini judgment, the advance fixing of MCMs is a benefit granted to traders carrying out operations from and to non-member countries, in so far as it enables them to make more accurate calculations and to offset the risks to which they are exposed as a result of fluctuations in world prices . Now, according to the rule cuius commoda eius et incommoda, those to whom benefits are granted must also bear the corresponding burdens . It is therefore reasonable that, having regard to the advance fixing, Community law should increase the amount of the security or, as in the present case, limit the validity of the certificate to only one country . But the measure under review is seen to be reasonable above all if account is taken of the fact that it facilitates avoidance of the risk of speculation illustrated by the Commission in its replies to the questions put to it by the Court . If a trader who had applied for advance fixing of the MCM were free to disregard the fixing and export from other Member States, there would be nothing to prevent him from choosing in every case the solution most favourable to him and the most onerous for the European Agricultural Guidance and Guarantee Fund ( EAGGF ). Consider the case where in a country with negative MCMs ( as was the case in France where the certificate concerned here was issued ) there was a devaluation and, consequently, an increase in the MCMs : the exporter would without doubt choose to pay the sums involved at the ( lower ) rate fixed in advance . Conversely, in the event of revaluation he would prefer to abandon the amount fixed in advance and pay the ( lower ) rate ruling on the day of export . And of course mutatis mutandis the same would happen in a State where the MCMs were positive . Limitation of the territorial validity of the certificate is therefore necessary in order to ensure that a facility designed to be in the interests of trade does not have a boomerang effect on the EAGGF . This can be illustrated by another example : a trader who had applied for and obtained advance fixing of the MCM and of the refund at the same time could, if he perceived it to be to his advantage, waive the MCM and export from a Member State other than that which he himself had chosen in advance; but he would retain - and this is the important point - at the expense of the EAGGF - the certainty and the probable advantages accruing to him from advance fixing of the refund . And that is not all . The Commission is certainly corrrect in its observation that the system' s guarantee mechanisms are based on the premiss that the certificates are unitary in character, as is proved by the fact that the obligations to which they give rise are covered by a single security . If the certificates could be separated into component parts the legislature would have had to provide for a security for each of the obligations deriving from them . Finally, it seems to me that Kroecken' s reference to the Merkur judgment is irrelevent . Admittedly, it is stated in that judgment that a trader is entitled to the refund even when he has exported goods other than those for which the licence was issued . But in that case the difference between the goods exported and the product indicated on the certificate was minimal and there was certainly no speculative intent underlying the consequent change in the customs classification . Furthermore, the refund was granted at the rate fixed for the product actually exported . In the second question the national court asks whether "in certain circumstances" the principle of the protection of legitimate expectations makes it necessary also to grant the refund at the rate fixed in advance . The hypothesis to which the question relates is based on the facts of the case : an exporter whose invalid certificate was initially accepted by the national authority is in a position to prove that, had he known that he would not receive a refund of the amount fixed in advance, he would have produced another certificate or else would have effected the export from the Member State in which the certificate produced was valid . Kroecken considers that the question should be answered in the affirmative, whilst the Hauptzollamt and the Commission observe that, since Kroecken' s representative contributed to the customs error, it is not entitled to any protection . For my part, I advocate a negative answer, but not on the same grounds as those put forward by Kroecken' s adversaries . The company asks for the application of a "fairness clause" similar to those which, in other areas of Community law, make it possible to limit the damage suffered by a person through an error for which he is not responsible or to uphold the legitimate expectations engendered in him by a particular course of conduct on the part of the administration ( see Article 5 of Council Regulation No 1697/79, Official Journal 1979 197 p . 1, on the post-clearance recovery of duties and Article 13 of Council Regulation No 1430/79 of 2 July 1979, Official Journal 1979 175, p . 1, on the repayment or remission of import or export duties ). But Kroecken is overlooking Article 8 ( 2 ) of Regulation No 729/70 of the Council of 21 April 1970, Official Journal, English Special Edition 1970 ( I ), p . 218, on the financing of the common agricultural policy, according to which "in the absence of total recovery (( of sums lost by reason of irregularities or negligence )), the financial consequences shall be borne by the Community, with the exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the Member States ". There is no doubt that in the present case the error ( if there was one ) was committed by the German customs authorities, and the conduct of the Community authorities is not at issue . Nor may it be objected that Article 8 ( 2 ) of Regulation No 729/709 is not applicable to this case . It is clear that there is a close analogy between the repayment of sums due and the payment of a refund at a rate higher than normal, if only because in both cases the expenses of the operation are to be paid out of the Community' s own resources . Finally, Kroecken' s case is undermined by a number of pronouncements of the Court, and in particular that of 13 November 1984 in Joined Cases 98 and 230/83 Van Gend en Loos (( 1984 )) ECR 3763, paragraph 20 . The Court held that no protection was available for a trader whose export certificates were initially accepted by the customs officials and then, after more detailed investigations, were considered by the same authorities to be invalid ( see also, with respect to aids, the judgment of 24 February 1987 in Case 310/85 Deufill (( 1987 )) ECR 901, paragraphs 24 and 25 ). The conclusion which I have reached does not of course deprive the aggrieved party of the possibility of bringing an action before the national court for compensation to be paid by the authorities responsible for the error which, in its view, caused it damage . In view of all the foregoing considerations, I suggest that the Court should give the following answers to the questions submitted to it for a preliminary ruling by the Bundesfinanzhof by order of 29 October 1986 in the proceedings pending before it between Hauptzollamt Hamburg-Jonas and the company P . Kroecken of Mannheim : ( a ) Article 2 ( 3 ) of Commission Regulation No 243/78 must be interpreted as meaning that the advance fixing of a refund is not applicable to the export referred to in a document which also records the advance fixing of the monetary compensatory amount - produced at the time of exportation from a Member State - where that document is valid in another Member State; ( b ) there is no reason to change that interpretation on the basis of the Community principle requiring the protection of legitimate expectations, even in the special circumstances described by the national court . (*) Translated from the Italian .

Wednesday 21 January 2009 THE LORD CHIEF JUSTICE: This is an application by Her Majesty's Attorney General under section 36 of the Criminal Justice Act 1988 for leave to refer to this court for review a sentence which she considers to be unduly lenient. We grant leave. The sentence was imposed on 10 October 2008 by His Honour Judge Cripps sitting at Aylesbury Crown Court. The offender is 28 years old. He was born in November 1979. He has no previous convictions. The indictment contained three counts. On 29 September the jury at trial were unable to agree on count 1, which alleged rape. They were discharged from returning a verdict. On count 2 they convicted the offender of rape involving penetration of the anus, and count 3, rape involving penetration of the vagina. The victim on both counts was the offender's wife and the mother of his two young children. They were separated. On the night of 28 September 2007 they both ended up in a bar in Milton Keynes. During the evening the offender called his wife a "whore", something he was to repeat to her in a text message later that evening. She went home. The children were staying with her parents. The offender pushed his way into the house. He was aggressive and under the influence of drink. The sexual offences then took place. The relationship had lasted for about ten years. They had lived together for nine years and they had been married for nearly five. They had two children: a girl aged 4 and a boy aged about 18 months. Some of the difficulties in their relationship arose because of the debts the offender had incurred in buying petrol on his wife's credit card. In August 2006, following a car crash in which he was injured, the offender needed physiotherapy. After the accident he appeared to his wife to be less interested in their marriage and so they separated. They continued to speak from time to time. There were occasions when their contact caused conflict; abusive words were used and there were emotional exchanges between them. On the day before the offence the offender threatened to leave for Spain, having failed an exam and left his job. On the evening of 28 September 2007 they ended up in the same bar. The offender was under the impression that his wife was there deliberately in order to make life difficult for him and to create embarrassment because this bar was a place to which he went. He objected to her presence. He objected to what he perceived to be her behaviour. He was upset and called her a "whore". In the early hours of the following morning he sent her some text messages which included: "If you want to act like a whore, fine, just don't do it in front of me. I thought better of you. By the way, after you left we found out what the six guys wanted." "By the way, told them you don't do blow jobs or anal." Having returned home, she was disturbed by the offender banging on the door. She let him in. An argument developed about the bar being "his place", his sanctuary from her. Again he called her a "whore". To get away from him she went upstairs, but he followed her. Sexual intercourse then took place. The Crown's case was that it was rape. The offender's case was that it was consensual. The jury was unable to agree. That count disappears from consideration, save and except that sexual intercourse already had taken place when those offences occurred. The offender continued to complain about the way in which he perceived the victim behaved at the bar. We do not propose to go into great detail about what happened then. By not doing so we do not minimise the gravity of what actually happened. The victim was lying on the bed. The offender undid her belt. He pulled off her jeans and knickers. He took off his trousers. He penetrated her anus with his penis, despite her pleas with him not to do so. He accepted later that this was something which she never let him do in the ordinary way of their marriage. She screamed. To stop her screaming he put her knickers into her mouth. He thrust with great force, causing her severe pain. She was uncertain whether he had ejaculated, but his semen was later found on anal swabs. This was a forced buggery. The offender knew perfectly well that this was a form of sexual activity which had never been included as part of their own sexual relationship and that she would never have consented to it. She was, not surprisingly, distraught and humiliated. The offender emptied his pockets and told her not to ignore him. He then said, "I will make you not ignore me". Again he raped her. This time he penetrated her vagina. The victim tried to call the police, but the offender pulled the telephone out of its socket. He threatened to kill himself and fled the scene. That was after he realised that the victim had managed to contact the police on her mobile phone. The call received by the police was harrowing in its terms. This sexual attack lasted in excess of an hour. Having fled the scene, some two hours later, a long way away, the offender was involved in a traffic accident. He was taken to hospital suffering from concussion. The victim inevitably had to be medically examined. The case went to trial and was fully contested. Of itself that is irrelevant to sentencing, but we must record a feature which the judge noted. The offender's defence was that the victim had been rubbing men up in the club; that she should not have been there anyway; and that he had asked her to stay away. When he had gone to the family home they had consensual sexual intercourse during which he had ejaculated on her back. That was how the semen was eventually found on the anal swab because during foreplay he had penetrated her anus digitally. He claimed that they had later rowed and went for a drive. The victim had staged the scene at home. She was play-acting. She had deliberately injured her own anus, and had planted the semen there and saliva on her own knickers. The judge observed that during the course of the trial the offender enjoyed the distress caused to the victim by the conduct of defence counsel on the basis of the offender's clear and explicit instructions. A number of assertions had been put to her which were totally without foundation and the opposite of the truth. At the conclusion of the trial the judge indicated that he did not consider that the offender met the criteria for dangerousness sufficient to require the imposition of imprisonment for public protection. But he said in his sentencing remarks that the offender had been convicted of a particularly nasty series of rapes. He noted that the victim had screamed so loudly at the pain caused by the forced buggery that the offender had tried to gag her with her own underwear. He noted the length of her ordeal and he was of the view that the offender had enjoyed her distress at trial. The aggravating features of the case are obvious. The mitigation was non-existent, beyond the fact that the offender was a man of good character with no previous convictions. This is an extreme case of its kind: rape by a husband of his wife from whom he was separated. The facts that we have narrated demonstrate, and the conduct of his defence confirms, that the offender deliberately chose to use sexual intercourse with his wife without her consent as a weapon with which to dominate and humiliate her. This was the woman with whom he had once had a relationship of genuine affection and who had borne him two children. There was a grave breach of trust. The offender used the kind of knowledge that couples have of each other, which he would have acquired during their moments of warm intimacy, about a sexual practice that she found wholly unacceptable. With that knowledge he forced her to submit to it. Apart from the sheer humiliation and horror, she suffered physical pain. Having done that, he added to her degradation by raping her vaginally. The offender's actions were quite merciless. There is no room here for the exercise of mercy. We acknowledge that this very experienced judge had presided over the trial, but in view of the remarks he made about the conduct of the defence and the way in which the offender enjoyed the humiliation to which the victim was subjected in the witness box, we see no room for taking the view that the sentence was lenient because the judge exercised the judgment he would have been entitled to exercise based on specific features of the case. This sentence was unduly lenient. At the end of this trial punishment of very great severity was required. As we said earlier in this judgment, this was an extreme case of its kind. The sentence imposed on the offender will be quashed and we will replace it with a sentence of ten years' imprisonment.

COURT OF APPEAL FOR ONTARIO CITATION: Weinmann Electric Ltd. v. Niagara (Regional Municipality), 2016 ONCA 990 DATE: 20161230 DOCKET: C60955 Doherty, Brown and Huscroft JJ.A. BETWEEN Weinmann Electric Ltd. Plaintiff (Appellant) and The Regional Municipality of Niagara Defendant (Respondent) David Levangie, for the plaintiff (appellant) Paul DeMelo and Alexandra DeGasperis, for the defendant (respondent) Heard: December 22, 2016 On appeal from the judgment of Justice Joseph W. Quinn of the Superior Court of Justice, dated August 6, 2015. ENDORSEMENT [1] The appellant electrical contractor appeals from the decision of the trial judge dismissing its action against the respondent regional municipality alleging a failure to follow its bylaws governing contracting for the provision of goods and services. The consequence of the failure, according to the appellant, was that it was denied the opportunity to provide electrical work for the region for over 10 years. [2] The procedure governing contracting is set out in a series of four consecutive bylaws. The bylaws established different and more onerous requirements that must be met as the value of the goods and services being purchased increased. Broadly speaking, department staff were authorized to issue a simple purchase order for procurements of less than $10,000, whereas purchases above that amount required the use of increasingly more formal quotation processes. [3] The region maintained a list of pre-qualified contractors, who provided a fixed price for particular services for a two-year period. The list was open to all interested contractors. The appellant was on the list for much, but not all, of the relevant period. [4] From 2006 onwards, the bylaws prohibited “contract-splitting” as follows: No Contract for Goods and Services may be divided into two (2) or more parts to avoid the requirements of this By-law” (s. 34(b)). [5] At trial, the appellant argued that the region breached its bylaws by contracting with a competitor, Regional Trenching, without following the competitive purchasing processes set out in the bylaws, and by a pervasive practice of contract-splitting. The appellant alleged that Regional Trenching wrongly obtained approximately $11 million in contracts from the region over a 10-year period. [6] On appeal, the appellant argues that the trial judge erred in law in interpreting the bylaws and that the trial judge made palpable and overriding errors of fact in concluding that the region’s conduct did not violate the bylaws. The interpretation of the bylaws [7] The trial judge’s interpretation of the bylaws is a question of law that is subject to review for correctness. We are satisfied that the trial judge made no errors in interpreting the bylaws. [8] The appellant submits that the prohibition on contract-splitting required the total project or annual requirement to be considered in applying the graduated procurement process. Given that the value of the work performed on an annual basis was approximately $750,000 per annum, it “defies logic” that the region was unable to determine that its project or annual requirements would exceed the $10,000 threshold. [9] We note that this submission was not put before the trial judge. In any event, the difficulty with this submission is that it is based on a provision in the 2004 bylaw that was deleted from successor bylaws and replaced by the prohibition against contract-splitting in 2006. There is no basis for the old provision to modify the interpretation of the subsequent bylaws. [10] Although the bylaws (since 2006) prohibit contract-splitting, they do not specify the scope of work that a contract must cover. On a reading of the plain language of the bylaws, the region is free to determine the scope of the work encompassed by any contract it enters into – it can define a contract’s scope of work to cover as little or as much of a particular project as it considers appropriate and consistent with the objectives of the bylaws. [11] The various purposes, goals, and objectives of the bylaws cannot all be realized in respect of every contracting decision. The bylaws are designed “to offer a variety of Purchasing methods, and to use the most appropriate method depending on the particular circumstances of the acquisition”. As well, they seek “to maximize savings for taxpayers.” At the same time, the bylaws seek to “encourage competitive bidding” and, “to the extent possible, to ensure openness, accountability and transparency while protecting the best interests of the [region] and [its] taxpayers.” [12] The trial judge concluded that the bylaws do not restrict the amount of work that may be procured from a single supplier and do not prevent the region from using a task-oriented approach in completing projects rather than a contract-based approach. The trial judge concluded, further, that the prohibition on contract-splitting applied only to contracts, not to tasks. [13] We see no error in the trial judge’s interpretation. We are mindful of the concern that the prohibition on contract-splitting should not be circumvented by subterfuge, but the trial judge found no evidence of any wrongdoing on the part of the region. On the contrary, the trial judge found that the region’s task-oriented approach was both sensible and economic. Did the trial judge make palpable and overriding errors? [14] The trial judge carefully reviewed the evidence in a detailed and considered decision that addressed all 40 issues raised by the appellant. He found as follows: · There was no evidence that the appellant was treated unfairly or differently than other bidders or those who were pre-qualified suppliers (and pre-qualified suppliers were not entitled to be provided with work in any event). · There was no credible evidence that the region had engaged in contract-splitting to avoid the procurement regime set out in the bylaw. · There was no evidence that the region’s invoicing was a sham designed to avoid compliance with the bylaw. On the contrary, Regional Trenching was reasonably priced, if not the least expensive contractor, was reliable, and did good work. · There was no evidence that the region directed contracts to Regional Trenching or did anything improper in purchasing goods and services from Regional Trenching. [15] The appellant invites the court to infer that its inability to obtain work from the region could be explained only by the region’s disregard and/or manipulation of the contracting bylaws. According to the appellant, the “sheer scale” of the monthly invoicing by Regional Trenching should remove any doubt that the region was not following the procurement process set out in the bylaws. [16] However, in our view, there is no basis to draw this inference. The trial judge’s findings to the contrary are supported on the record that was before him, and they are fatal to the appeal. Damages [17] Even assuming that the appellant could succeed in establishing a violation of the bylaws, the appellant failed to establish any damages. The argument that it would have obtained contracts if competitions in accordance with the bylaw’s higher value purchases quotation procedures had been held is speculative. The trial judge concluded as follows: There is no evidence that the plaintiff would or should have been successful in obtaining work from the defendant in the years it was on the pre-qualified list (and there certainly is no evidence that the plaintiff would or should have been successful in obtaining such work in the years it was not on the list). [18] The appellant did not argue in its factum that the trial judge erred concerning damages. However, in oral argument, the appellant submitted that damages could be calculated based on its success rate in bidding for work against the same contractors and a profit margin suggested by its damages expert. [19] The trial judge rejected this submission as irrelevant and not established by evidence in any event. Further, the trial judge concluded that the evidence of the damages expert was undermined by his failure to use financial information relating to the plaintiff, and the fact that his evidence was based on a single project for which he failed to obtain back-up information. [20] The trial judge made no error in this regard. In short, the appellant simply failed to prove damages. Disposition [21] The appeal is dismissed. [22] The respondent is entitled to costs on the appeal of $20,000, inclusive of taxes and disbursements. “Doherty J.A.” “David Brown J.A.” “Grant Huscroft J.A.”

Mr Justice David Steel : This is an application by the 8th and 9th Defendants to set aside an order of Tomlinson J dated 31 October 2003 giving permission to the Claimants to serve proceedings on the 8th and 9th Defendants outside the jurisdiction and, in the alternative, to stay the proceedings against the 8th and 9th Defendants pursuant to section 9 of the Arbitration Act 1996. The background facts are very unusual. For the purposes of the present applications they can largely be taken from the Amended Particulars of Claim served by the Claimant. The Claimant ("Ms King") went to work for the Royal Family in Brunei at the age of 20, where she managed the household of Prince Jefri for 7 years. She was very well paid. When she left Prince Jefri's employment at the age of 27, Ms King had accumulated a very large sum of money: something in the region of £4 ½ million. Until that time, Ms King had simply put the money in a bank. After she finished work, however, she took the view that she needed to find somewhere to invest it. Ms King was introduced to 1st Defendant, Mr Tune, who purported to be a financial adviser. In due course, she came to rely on Mr Tune's advice for the investment of most of her money. She told him what her requirements were: it was her case that she nominated safe, long term investments for her future and that of any family she might one day have. Mr Tune first suggested to Ms.King an arrangement to defer tax on her savings that had been accumulated abroad. He told her that if she paid the money into an annuity, she would be able to control the investments while at the same time deferring tax. To do this, she would have to establish a Liechtenstein foundation which could be done through the "Jeeves Group". Mr Tune told Ms. King that many of his clients used the Jeeves Group and that Bryan Jeeves (the 8th Defendant) could be trusted to keep an eye on her affairs and give her advice. Pursuant to Mr Tune's advice, the Caterham Family Foundation ("the Foundation") was formed on 4 April 1997 in Liechtenstein. It was managed by the Foundation Council whose members were Bryan Jeeves, later joined by his son, the 9th Defendant (together "the Jeeves") and Lexadmin Trust Company Limited, part of the Jeeves Group. The purpose of the Foundation was the undertaking of distributions or donations to the designated beneficiaries. Under the By-laws Ms King was the principal beneficiary, solely entitled to the Foundation's net assets and income during her lifetime. On 3 April 1997, Ms King paid a premium of £2.5 million for the first of a number of annuities taken out with a company called Centurion Insurance Limited ("Centurion"). Ms King was led by Mr. Tune to believe that Centurion was a major established insurance company which specialised in annuities. In fact, it is one of a number of St. Vincent and the Grenadines companies owned or controlled by Mr Tune and managed by Jeeves. At the time when the annuity was taken out, Ms King was 27 years old. Under the remarkable terms of the annuity, £650,000 was payable to her per month from the age of 79, with no rights of surrender or on death before then. Centurion reinsured the annuity for a premium of £2,418,750 with another St. Vincent and Grenadines company, Phoenix, owned by the Foundation, and out of that sum Phoenix transferred £2,405,000 to the Foundation to be administered and invested. Further annuities were subsequently taken out with Centurion and reinsured with Phoenix. The total amount paid into the annuities was £4,478,746.91 and $400,000. The money paid into the annuities (minus sizeable fees for Centurion and others) was then available to the Foundation for investment on Ms. King's behalf on the advice of Mr Tune. As Mr. Tune explained it to Ms King, she was the beneficiary of the Foundation. Bryan and Alexander Jeeves were in theory in complete charge of it and she could not tell them what to do: in practice they would generally accede to her requests. Accordingly, Mr Tune advised Ms King how the funds should be invested and she, in turn, wrote to Bryan Jeeves in the manner directed by Mr. Tune, suggesting or recommending to Bryan Jeeves investments to make, which Jeeves would then act upon. In June 1997, Mr. Tune arranged for Ms. King to meet Bryan Jeeves. What was said at that meeting is greatly in issue. But Ms. King's statement evidence is that at that meeting she told Mr. Jeeves what she had already told Mr. Tune, namely that she was looking for low risk investments for the long-term. Initially, most of the money was invested relatively cautiously, consistently with Ms. King's stated requirements. However, in late 1998 and early 1999, on Mr Tune's advice, Ms. King "recommended" or, according to Jeeves, "instructed" them to invest about half the funds (just over £2 million) by way of two share subscriptions in a company called Isosafe Limited: £980,000 on 19th November 1998 and £1,050,000 on 12th March 1999. These investments were made in the name of Lemur, another St Vincent and Grenadines company owned by the Foundation and managed by the Jeeves group. Most of the remaining money (just under £2 million) also ended up in Isosafe in early 2000 by a series of four unsecured loans made on Mr. Tune's advice to a Dutch company, BV Post, which in turn on-lent the money to Isosafe. The first two loans were made by Lemur and the second two by the Foundation. Isosafe was a private limited company. It had been set up in September 1997 by Mr. Tune and he controlled it. Since incorporation, it had made virtually no sales, let alone any profits. Indeed, it was making ever-increasing losses (£240,000 in 1998, £2.4 million in 1999 and £4.2 million in 2000). Its accounts were purportedly prepared on a going concern basis but, as noted in the auditor's report, that depended upon the outcome of negotiations to secure additional funding. Its business was said to be the development, manufacture and exploitation of temperature control systems for the transport of medical units ("Coolbox"), the technology for which had apparently been invented by the 5th Defendant, Mr Wheeler. The only assets of any significance on the balance sheet were patents or licences to use patents for the Coolbox technology purported to be granted to it by a company also called Coolbox for sums totalling over £6.4 million, although in fact, there were no patents, merely application for patents, and the technology was unproven in the market place. Coolbox was, in practice, also controlled by Mr. Tune. Its Directors were the 3rd Defendant, Mr. Wright, a close associate of Mr. Tune, who acted on his instructions, and his wife. Unbeknown to Ms.King, her money (and money raised from other investors) was passed out of Isosafe to Coolbox under the guise of the so-called licence fees, and from there on to various other entities owned or controlled by Mr. Tune and/or Mr. Wheeler. Many of those entities were themselves managed by the Jeeves Group including, in particular, the Mendip Foundation and Rose. Around the time of the share subscriptions in Isosafe, the Jeeves Group formed and managed the Mendip Foundation on behalf of Mr. Wheeler, with Mr. Tune acting as intermediary. According to an e-mail of Bryan Jeeves, Jeeves were told that Mendip was "to own/hold certain rights (Coolbox) and that the licence fees or sale of rights would be donated to Mendip". Subsequently, Jeeves arranged for Mendip to form a subsidiary, Rose (also managed by Jeeves). Mendip and Rose received several million pounds of the so-called "licence fees" paid by Isosafe to Coolbox. As regards the loans to BV Post, Mr Tune told Ms. King that they were like a deposit with a bank and there was no risk. The first loan, as described in Ms. King's letter of recommendation or instruction to Mr. Jeeves (which like all her letters of recommendation had been dictated to her by Mr. Tune) was explicitly for on-lending to Isosafe. The others were not, described merely as for "onward lending at the discretion of BV Post". Ms. King did not know that the other loans would be on-lent to Isosafe but they were. They were unsecured loans. Accordingly to BV Post, security was never even asked for. The Jeeves Group were involved in the drafting of the loans. Most of them were signed by Alexander Jeeves. Although Ms. King's letters of recommendation to Mr. Jeeves referred to BV Post as a company known to Mr Jeeves, his evidence is that it was unknown to him, and he "had no idea what BV Post would do with it." It appears BV Post is not a company of any substance. Not surprisingly, within little more than a year, Isosafe was in liquidation as being insolvent and BV Post had defaulted on 3 of the 4 loans. The money appears to have gone from Isosafe through a tangled web of overseas entities. Significant amounts seem to have gone to Mr. Tune and entities controlled by him, some of it appears to have gone to Mr. Wheeler, and some of it seems to have been recycled via share subscriptions back into Isosafe. Much of it seems to have disappeared. As the Claim Form asserts the claim against the 1st Defendant Mr Tune is for damages for fraud. More accurately, as explained in the Particulars of Claim, the claim is framed by way of the tort of deceit. In summary it is complained that Mr Tune as the Claimant's financial advisor advised her to make investments by way of share subscriptions and loans on the basis that they were, in his opinion, good, safe and sensible investments and appropriate for her to make when they were nothing of the sort as he well knew (or where he could not honestly have believed they were). In fact, the design was for the money to be siphoned off out of Isosafe to Coolbox and elsewhere. In advising her to make these investments Mr Tune was acting dishonestly with the intention of defrauding her. Again as appears from the Claim Form the claim against the 8th and 9th Defendants was by way of a claim for damages as joint tortfeasors in the 1st Defendant's fraud or deceit. The basis of this cause of action was that the Jeeves had made the arrangements to implement the investments which Mr Tune had fraudulently advised Ms King to make knowing full well that the advice had been dishonest. In short the Jeeves knew the only reason that Ms King was "recommending" or "suggesting" these investments to them was because Mr Tune as her advisor had advised her to make those investments and that they must have had sufficient knowledge that Mr Tune could not have honestly advised Ms. King to make them. By continuing to act upon and execute her recommendations or instructions they became parties to or participated in the fraud and are thus liable as joint tortfeasors As already recorded on 31 October 2003, Tomlinson J granted permission to the Claimants to serve the claim form on the Jeeves out of the jurisdiction. On 29 January 2004, after a substantial extension of time, the Jeeves's applied to set aside that permission on the grounds that there was no serious issue to be tried. In that regard it was said that the pleading of the claim against the Jeeves as joint tortfeasors was "fundamentally flawed". In the face of this contention, voluntary further and better particulars of the claim against the Jeeves's was served for clarification purposes. These voluntary particulars were thereafter incorporated into a draft-amended particulars of claim shortly before the Defendants' application was due to be heard on 27 February 2004. These particulars formed paragraph 77a into 77c of the amended Particulars of Claim. They read as follows: - " 77A For the avoidance of doubt, in relation to the claim against Bryan and Alexander Jeeves as joint tortfeasors with Mr. Tune in fraud: (1) The fraud includes not just Mr. Tune's deceiving Ms. King and other investors into making the investments but the making of the investments (in the case of Ms. King) by procuring her to issue recommendations (or, according to the 8th and 9th Defendants, instructions) to Bryan Jeeves to make those investments and the execution of those recommendations or instructions by Bryan and Alexander Jeeves, without which there would be no fraud. (2) If, as is Ms. King's case, Bryan and Alexander Jeeves had sufficient knowledge that Mr Tune was deceiving Ms. King and thereafter continued to act upon and execute Ms. King's recommendations or instructions to make the investments procured by his fraud, they became parties or privy to the fraud and/or actively participated in it by acting upon and executing the recommendations or instructions. (3) Further or in the alternative, if, as is Ms. King's case, Bryan and Alexander Jeeves had sufficient knowledge that Mr. Tune was deceiving Ms. King and thereafter continued to act upon and execute Ms. King's recommendations or instructions to make the investments procured by his fraud, Bryan and Alexander Jeeves became parties or privy to Mr. Tune's fraudulent design and/or it became a concerted action or common design and/or a design in which they joined and participated to defraud Ms. King and/or they combined with Mr. Tune to do the acts which constitute the fraud. (4) Further or in the alternative, if, as is Ms. King's case Bryan and Alexander Jeeves were sufficiently aware of the fraudulent plan and continued to act upon and execute Ms. King's recommendations or instructions to make the investments procured by Mr. Tune's fraud and/or did nothing to stop it, they at least tacitly agreed to it and/or joined in its execution, and/or there was an unlawful combination between them and Mr. Tune to defraud Ms. King such that they have conspired with Mr. Tune to defraud Ms. King and are liable as joint tortfeasors with Mr. Tune in fraud. (5) Bryan and Alexander Jeeves benefited from the fraud through the fees and commissions in relation to Ms. King's affairs and in relation to the affairs of other investor clients of Mr. Tune for whom they also acted. It is not presently known whether they received any other benefit from the fraud. 77B Further or in the alternative, by reason of the matters pleaded in sub-paragraph (4) above, Bryan and Alexander Jeeves are liable with Mr. Tune for the separate tort of conspiracy to defraud Ms. King, an unlawful means of conspiracy. An intention to injure Ms. King is inherent in the nature of conspiracy to defraud and/or is sufficiently established by the fact that knowing Ms. King's recommendations or instructions to make the investments to have been procured by fraud Bryan and Alexander Jeeves nonetheless deliberately continued to act upon and execute them knowing the probable consequences for Ms. King. 77C Further or in the alternative, Mr. Tune was in breach of his fiduciary duty to Ms. King, and Bryan and Alexander Jeeves are liable as constructive trustees for having dishonestly predicated in or assisted Mr. Tune's fraudulent or dishonest design and breach of fiduciary duty." Subject to certain terms as to costs the Jeeves' consented to the amendments at the hearing which was thereupon adjourned so that the legal advisors could have more time to consider and advise their clients on the implications of the amendments from the perspective of the jurisdictional challenge. Notably the entire legal team for the Jeeves was then changed before the challenge was reinstituted. Title to Sue The threshold issue raised by the Jeeves Defendants is to the effect that the Claimant can sustain no arguable case that she has title to sue in respect of the losses occasioned by the deceit of Mr Tune. The argument runs as follows: - a) The payments were made out of assets of the Foundation and Lemur respectively. b) Lemur is a St. Vincent Company: the Foundation has distinct legal personality as a matter of Liechtenstein law. c) Thus Mrs King is in a like position to a shareholder in a company which has been defrauded and is debarred from bringing an action in her own name in respect of damage that is merely reflective of loss sustained by that company: Johnson v Gore-Wood [2002] 2 AC.1. Whether or not absence of title to sue proves to be well founded in due course, I have no doubt that the Claimant has a good arguable case on this issue: - i) While the Claimant was clearly a shareholder in Lemur, her position in regards the Foundation, if it be relevant, may be rather different. The formation deed of the Foundation pronounces that its sole purpose is to effect donations to a beneficiary. By virtue of the byelaws, the Claimant is designated as "First Beneficiary". Thereby she is solely entitled "to the Foundation's net assets and the income". Even allowing for the fact that the Foundation may have its own legal personality and hold property in its own right, the Claimant may well be able to contend that her position is more akin to a beneficiary under a trust than a shareholder. ii) The underlying claim is in deceit against Mr Tune. It is the Claimant's case that the Jeeves' were joint tortfeasors. As pleaded the false representations were directed to and acted upon by the Claimant in the form of arranging transfer of funds on her instructions from Lemur and the Foundation whereby she sustained loss by reason of a reduction in the value of her shareholding in Lemur and in the net assets of the Foundation to which she was solely entitled. The position is (or at least arguably is) that whilst Lemur and the Foundation has sustained loss this is solely as a consequence of a wrong to the sole shareholder and beneficiary and thus there is no bar to the claim: Johnson v Gore-Wood supra per Lord Millet at p.62. No cause of action It was next contended on behalf of the Jeeves Defendants that the Claimant's statement of case is defective in that it discloses no cause of action. In the alternative, it is contended that a cause of action was only properly pleaded by reason of the amendments made in February. The claim against the First Defendant is described in the Claim Form as a claim for fraud. As framed in the Particulars of Claim, there would be no doubt that it is a claim which would be labelled as a claim in deceit: Mr Tune is alleged to have given dishonest advice to the Claimant in reliance upon which she sustained loss. Indeed such an analysis of the claim is contained in paragraph 5 of Brian Jeeves' own statement. As regards the Jeeves's themselves, the Claim Form makes it plain that it is alleged that they are also liable in damages "as joint tortfeasors". As Paragraph 55 and 77 of the Particulars of Claim assert, the claim against the Jeeves Defendant is based on the proposition: - a) that the Jeeves knew that Mr Tune was deceiving the Claimant b) that against that background they arranged for the investments to be made, and c) in doing so, they participated in the fraud and assisted Mr Tune to carry it out. The Defendants in this context place great weight on the analysis of secondary liability in Credit Lyonnais v ECGD [1998] 1 Lloyd's Rep 19. to the effect that acts which knowingly facilitate the commission of a crime do not make the aider liable as a joint tortfeasor. Such liability can only accrue if the aider has procured or induced the tort or joined in a common design whereby the tort was committed. The Defendants accordingly contend: - i) That there was or is no more than a plea of knowing assistance, alternatively ii) That to the extent of active participation or joint enterprise was relied upon in the pleadings, this was dependant on inferences drawn from the knowledge of the activities of Mr Tune for which, on the facts, there was, it contended, no arguable case. The short answer to the first point is that even in its unamended form, the pleading expressly asserts participation in a context where (as set out in Paragraphs 56 – 76 of the Particulars of Claim): - a) The Jeeves's were closely connected with Mr Tune and managed a number of entities owned by him and indeed by Mr Wheeler. b) Brian Jeeves had attended a meeting in London with Mr Tune and the Claimant where the Claimant's policy of investing her life savings in low risk, long term investments was discussed. c) Within 2 years half that fortune had been invested in Isosafe, a recently incorporated company with no sales and dependant on returns on licence fees payable to "Coolbox". d) The Jeeves group had formed Mendip which was known to be used as a vehicle for owning rights in Coolbox and the money paid by Coolbox to Mendip (and to Rose a subsidiary of Mendip) derived from the original investment made by the Claimant in Isosafe. e) The other half of the life savings were lent to BV Post for onward loan to Isosafe, such loans being wholly unsecured. The point is further amplified in Paragraph 77A as incorporated in the amended pleading. It may be that in due course that the Defendant will be able to argue successfully that their involvement went no further than knowing assistance. But the pleading is not open to a strike out as originally formulated, let alone as amended. In this latter connection it has to be recorded that having challenged jurisdiction on the basis that "the cause of action was fundamentally flawed", the Defendants in consenting to the amendments in reality sold the pass. If it were seriously to be contended that, even as amended, the claim had no reasonable prospect of success and was vulnerable to strike out, the Defendant could not in the same breath consent to the amendment. I also reject the contention that the material presently available establishes that there is no arguable case that the Defendants had the requisite knowledge. This aspect is by definition highly fact sensitive. The lengthy statements in this case from the Claimant are of course controversial. But taken at face value they contain more than adequate material to establish a strongly arguable inference of knowledge. There is no basis for foreclosing that issue. Stay The agreement between the Claimant and the Jeeves' Defendants is contained in a Contract of Mandate dated 24 March 1997. This imposed an obligation on the Jeeves as "Mandatories" to comply with the instructions of the Claimant. Article 2 provides: - "They are at the outset exonerated for all dispositions that they shall undertake in good faith pursuant to the principal's explicit instruction…" Article VI provides: - "Excluding recourse to the courts of law a Court of Arbitration shall be competent for disputes that may arise from this Contract…." The Defendants contend that the claim in deceit is coterminous with any claim for breach of the Contract of Mandate – namely want of good faith in the dispositions that they were instructed to effect - and, accordingly, these proceedings must be stayed in the face of the arbitration cause. Reliance was predictably placed in this connection on The Angelic Grace [1995] 1 Lloyd's Reps. 7. In my judgment the Defendants' proposition is correct. There is a sufficiently close connection between the tortuous claim and the claim under the contract (which expressly envisages want of good faith in the compliance with the Claimant's instructions) to justify the view that the present claim "arises from" the contract. Accordingly there must be a stay.

Conclusions OPINION OF ADVOCATE GENERAL ALBER delivered on 24 September 2002 (1) Case C-168/01 Bosal Holding BV v Staatssecretaris van Financiën (Reference for a preliminary ruling from the Hoge Raad der Nederlanden (Netherlands)) (((Freedom of establishment – Taxation – Corporation taxes – Restriction on deductibility of costs relating to the holdings owned by a parent company in its subsidiaries established in other Member States – Cohesion of the tax system)) I ─ Introduction 1. In these proceedings the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) has referred two questions concerning the interpretation of Article 43 EC in conjunction with Article 48 EC and Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (2) (hereinafter: Parent-Subsidiary Directive) for a preliminary ruling. The referring court seeks to ascertain whether those provisions preclude an arrangement, laid down in the Netherlands Law on Corporation Tax, under which the costs incurred by a parent company on account of its holdings in subsidiaries (which, in the instant case, have their seat in a Member State) may be deducted when tax is levied on that parent company provided that those costs are indirectly instrumental in making profit which is taxable in the Netherlands. Under the Parent-Subsidiary Directive, Member States retain the option of providing that any charges relating to the holding owned in a subsidiary may not (in principle) be deducted from the profit of the parent company. II ─ Relevant legislation A ─ Community law 2. The Parent-Subsidiary Directive was adopted with a view to ensuring that the grouping together of companies of different Member States is not hampered by restrictions, disadvantages or distortions arising in particular from the tax provisions of the Member States, in order to secure the establishment and effective functioning of the common market. Those objectives are intended to be achieved by means of tax rules which are neutral from the point of view of competition with respect to such grouping together of companies of different Member States and, ultimately, by the introduction of a common tax system. (3) 3. The third recital in the preamble to the directive reads:Whereas the existing tax provisions which govern the relations between parent companies and subsidiaries of different Member States vary appreciably from one Member State to another and are generally less advantageous than those applicable to parent companies and subsidiaries of the same Member State; whereas cooperation between companies of different Member States is thereby disadvantaged in comparison with cooperation between companies of the same Member State; whereas it is necessary to eliminate this disadvantage by the introduction of a common system in order to facilitate the grouping together of companies. 4. Article 4 of the Parent-Subsidiary Directive reads: 1. Where a parent company, by virtue of its association with its subsidiary, receives distributed profits, the State of the parent company shall, except when the latter is liquidated, either: ─ refrain from taxing such profits, or ─ tax such profits while authorising the parent company to deduct from the amount of tax due that fraction of the corporation tax paid by the subsidiary which relates to those profits and, if appropriate, the amount of the withholding tax levied by the Member State in which the subsidiary is resident, pursuant to the derogations provided for in Article 5, up to the limit of the amount of the corresponding domestic tax. 2. However, each Member State shall retain the option of providing that any charges relating to the holding and any losses resulting from the distribution of the profits of the subsidiary may not be deducted from the taxable profits of the parent company. Where the management costs relating to the holding in such a case are fixed as a flat rate, the fixed amount may not exceed 5% of the profits distributed by the subsidiary . B ─ National law 5. In Article 13(1) of the Netherlands Wet op de Vennootschapsbelasting (Law on Corporation Tax) 1969 (1993 version) the Netherlands rules governing the determination of profit in the case of holding companies provide:In determining profit no account shall be taken of gains acquired from a holding or of the costs relating to a holding, unless it is evident that such costs are indirectly instrumental in making profit that is taxable in the Netherlands (exemption relating to holdings). In any event, the interest on and costs of loans taken up in the six months preceding the acquisition of the holding shall, except where it is likely that these loans have been taken up for a purpose other than the acquisition of the holding, be regarded as costs relating to a holding. III ─ Facts and main proceedings 6. Bosal Holding BV, appellant in the main action (hereinafter: Bosal), is a limited company established in the Netherlands and owner of holdings in various Netherlands and foreign companies, the latter being established both inside and outside the European Union. Those holdings range from 50 to 100 per cent of the capital share. Bosal's business consists in holding, financing and licensing activities. 7. In 1993 Bosal incurred interest charges of NLG 3 969 339 in connection with the financing of its holdings in companies established outside the Netherlands but inside the European Union. By an application to the competent Netherlands tax authority, Bosal sought a deduction of that amount from its taxable profit on the ground that, inasmuch as only those costs relating to such holdings which are indirectly instrumental in making profit that is taxable in the Netherlands were deductible, Article 13 of the Netherlands Law on Corporation Tax was not applicable because it was contrary to Article 52 of the EC Treaty (now, after amendment, Article 43 EC). 8. Refusal to grant such a deduction was notified by a corporation tax assessment for 1993. The objection filed by Bosal against that assessment and the action it subsequently brought challenging the decision to reject that objection were both unsuccessful. Bosal then lodged an appeal in cassation. IV ─ Reference for a preliminary ruling 9. The Hoge Raad, before which the appeal in cassation has been brought, has referred the following questions to the Court for a preliminary ruling: 1. Does Article 52 of the EC Treaty, read in conjunction with Article 58 thereof (now, after amendment, Article 43 EC, read in conjunction with Article 48 thereof), or any other rule of EC law, preclude a Member State from granting a parent company subject to tax in that Member State a deduction on costs relating to a holding owned by it only if the relevant subsidiary makes profits which are subject to tax in the Member State in which the parent company is established? 2. Does it make any difference to the answer to Question 1 whether, where the subsidiary is subject to tax based on its profits in the Member State concerned but the parent company is not, the relevant Member State takes account of the abovementioned costs in levying tax on the subsidiary? 10. Bosal (the appellant), the Netherlands, the Commission and the United Kingdom have submitted observations on those questions to the Court. V ─ Legal assessment A ─ The first question referred (1) Submissions of the parties 11. With the exception of Bosal, all the parties take the view that Article 13(1) of the Netherlands Wet op de Vennootschapsbelasting does not infringe Community law, either because the provision contains absolutely no restriction on freedom of establishment or because any such restriction is justified. 12. Bosal considers that the Netherlands Law unduly restricts freedom of establishment exercised through the acquisition of subsidiaries. In its view, non-deductibility of costs leads in law to double taxation. It observes that that situation does not arise on account of the lack of harmonisation, since the resultant unfavourable tax treatment would continue to exist even if all the States were to introduce a set of rules like that in force in the Netherlands. 13. It also maintains that Member States are permitted to exercise the option granted by the directive of declaring that holding costs may not be deducted only inasmuch as that option applies to all types of holding costs, not just to foreign holdings. By analogy, the predecessor law, the Besluit Vennootschapsbelasting (Decree on Corporation Tax) 1942, which afforded no right of deduction, had not been discriminatory. It was clear from the relevant preparatory documents that the amendment was made in the 1969 Law in order to avoid any undesirable repercussions on the Netherlands' budget resulting from the international prohibition on double taxation. 14. Bosal maintains that the Netherlands adopted the rules in question simply for fear of diminution of tax revenue and abuse. For justification on the basis of the principle of cohesion there must be a direct link between deductibility of the holding costs accruing to the parent company and the taxable profit of the subsidiary, which did not exist in this case because a parent company and a subsidiary do not form one fiscal entity. Furthermore, the cohesion principle was not applied in a uniform manner within the Netherlands system. 15. The Netherlands Government considers that the rules in question impose absolutely no restriction on freedom of establishment. This was apparent from the very fact that they were in conformity with Article 4(2) of the Parent-Subsidiary Directive as the Member States were even granted the option in that provision of declaring that absolutely no holding-related charges may be deducted. 16. There was, incidentally, no discrimination on grounds of legal form or registered office. The rules did not focus on the legal system under which subsidiaries had been established and they even benefited parent companies with non-resident subsidiaries, except where the profits of those subsidiaries were not subject to tax in the Netherlands. The sole criterion which had to be satisfied for the holding costs to be deductible was the existence of a link between the costs incurred by the parent company in acquiring a holding and the taxable profit of the subsidiary so acquired. Subsidiaries which made profits in the Netherlands and those which did not could not be compared. 17. Double taxation was prevented both nationally and internationally by virtue of the exemption relating to holdings. That exemption was in conformity with the fiscal principle of territoriality. The aim of the rules was to approximate the tax arrangements governing subsidiaries to those which govern branches. 18. The Netherlands Government further maintains that freedom of establishment is not restricted by the Netherlands tax system but, rather, by the fact that the State in which the subsidiary is established does not allow deduction of the holding costs incurred by the parent company. Differences in the national legal systems did not, however, constitute a restriction on freedom of establishment. 19. Assuming none the less that freedom of establishment was restricted, that restriction would, according to the Netherlands Government, be justified by the principle of cohesion within the tax system, a principle recognised by the Court. The fact that deductibility of costs was conditional on profits being subject to tax in the Netherlands meant that the essential direct link between tax advantage and fiscal levy was established. The two taxable companies, independent of one another in themselves, were to be regarded in that context as a consolidated entity. 20. The purported infringements in the system, for example, the independence of the net profit made by the subsidiary and the non-deductibility of costs in the case of the gross profit made by the subsidiary, did not diminish the fundamental cohesion of the mechanism. The method best corresponding to the principle of proportionality was chosen in order to secure such cohesion. This could indeed be seen in the Netherlands' decision to refrain from taxing those profits which had been made within a group outside the Netherlands. 21. In addition, revenue from taxation in the Netherlands had been significantly reduced as a result of permitting deductibility in general of holding costs, hence the reason for no other Member State introducing such rules without imposing a fiscal levy elsewhere. 22. The United Kingdom Government takes the view that the Netherlands rules are justified by the principles of cohesion and territoriality. It maintains that the provision in question establishes a clear link between the deductibility of costs and the levying of tax on profits in the Netherlands. This was a classic case of the principle of cohesion developed by the Court in its judgment in Bachmann. (4) Dispensing with the exemption relating to holdings would result in substantial double taxation. The Netherlands rules were in conformity with the Parent-Subsidiary Directive, which was merely permissive in that it permitted Member States to provide that charges relating to a holding may not be deducted but did not preclude their deductibility, albeit only in certain circumstances. 23. The Commission adopts a different approach, proceeding from the premise that the Netherlands rules on the taxation of parent companies are, in principle, compatible with freedom of establishment. Technically, there was no discrimination because costs relating to holdings in either resident or non-resident subsidiaries were always deductible provided that the taxable profits concerned were generated in the Netherlands. In practical terms however, foreign subsidiaries as a rule did not generate profit in the Netherlands, and that condition could as a result operate as a restriction. Nevertheless, deduction of charges relating to holdings in respect of foreign subsidiaries was not entirely precluded under the Netherlands rules because costs could, for example, be deducted where the subsidiary for its part operated a permanent establishment in the Netherlands. The Commission takes the overall view that freedom of establishment has been restricted. 24. However, interest expenses of any kind incurred in connection with financing activities had to be deductible for the purpose of determining the correct basis of assessment in accordance with the deductibility principle. The problem lay in the fact that there was often no opportunity whatsoever to deduct costs inasmuch as the subsidiary did not incur them and the parent company could not deduct them from the profits remitted to it by the subsidiary because most States refrained from levying tax a second time on those profits in order to prevent double taxation. 25. The Commission adds that if, in levying tax on the parent company, account were taken of the holding costs by reason of the fact that that company was liable under civil law to settle the debt in respect of those costs, two problems would arise: The State in which the subsidiary had its seat would be calculating the tax liability on the basis of an excessive sum since it would be taxing the profit of the subsidiary without taking into account the holding costs that led to such profit. Conversely, the Member State of the parent company would collect less tax. The Commission maintains that this may not be established as a rule under Community law. 26. Against that background, the Netherlands model was permissible in the Commission's view. It was consistent with the principle of territoriality and formed the logical conclusion to the profit country approach. It therefore corresponded to the first option, laid down in the Parent-Subsidiary Directive, of providing that charges relating to holdings categorically may not be deducted, and, as a result, such charges had to be deducted in the State in which the subsidiary has its seat. The established shortcomings in the otherwise coherent system were irrelevant inasmuch as they occurred indiscriminately. 27. There was, however, an infringement of Article 43 EC in that, where, conversely, a subsidiary generated profit in the Netherlands, it was not entitled under Netherlands tax law to deduct the holding costs incurred by its foreign parent company. However, this was not the subject-matter of the proceedings. (2) Assessment 28. With the exception of Bosal, all the parties concur that Article 13(1) of the Netherlands Wet op de Vennootschapsbelasting 1969 contains no restriction whatsoever on freedom of establishment but that, if it did, that restriction would in any event be justified. 29. It will be examined below whether that view is in conformity with freedom of establishment and with the previous decisions of the Court in that regard. Although direct taxation is a matter for the Member States, they must nevertheless exercise their direct taxation powers consistently with Community law and must therefore refrain from applying any form of overt or covert discrimination by reason of nationality or location of the corporate seat. (5) 30. Article 43 EC constitutes one of the fundamental provisions of Community law and has been directly applicable in the Member States since the end of the transitional period. Under that provision, freedom of establishment includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings under the conditions laid down for its own nationals by the law of the country where such establishment is effected. The abolition of restrictions on freedom of establishment also applies to restrictions on the setting-up of agencies, branches or subsidiaries. (6) 31. Under the second paragraph of Article 43 EC, freedom of establishment is subject to the exercise of freedom of movement for capital. It is evident from the wording of the second paragraph of Article 43 EC that the right to manage undertakings is the determining criterion. When assessing whether or not management of the undertaking concerned is connected with a holding, one particular consideration is the size of the holding concerned. Control can in any event be implied in the case of a substantial holding. (7) Since Bosal owns holdings ranging from 50 to 100 per cent in the capital of companies, it exercises a proportionate influence on such companies. Freedom of establishment is consequently created. 32. Freedom of establishment operates in two directions, first in respect of the host Member State and, secondly, in respect of the State of origin, which, in this case, is the Netherlands. The Court has in this regard held on a number of occasions that even though, according to their wording, the provisions concerning freedom of establishment are mainly aimed at ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of its nationals or of companies incorporated under its legislation and caught by the definition contained in Article 48 EC. (8) 33. The principle of freedom of establishment laid down in Article 43 EC above all precludes all direct and indirect discrimination on grounds of nationality. Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community are, in accordance with Article 48 EC, treated in the same way as natural persons who are nationals of Member States. 34. With regard to companies, it is their corporate seat that serves as the connecting factor with the legal system of a particular State, like nationality in the case of natural persons. (9) Accordingly, any restrictions on freedom of establishment may not discriminate on the basis of a given company's seat. This is true not only of overt discrimination by reason of seat but also of all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result. (10) 35. The national tax rules contained in Article 13(1) of the Wet op de Vennootschapsbelasting make no distinction, whether direct or indirect, on the basis of the seat of the parent company since only parent companies having their seat in the Netherlands can be affected by that provision. After all, under the territoriality principle a State is entitled to levy tax only in respect of persons liable to tax in its own territory. As regards the matter of discrimination by reason of a company's seat, this specific case focuses solely on the seat of the parent company and not on that of the subsidiary because here only the parent company, as taxpayer, could be affected by a set of rules that may be discriminatory. 36. Nevertheless, discrimination on grounds of nationality or seat does not arise here because the Netherlands rules apply to all parent companies resident in the Netherlands. 37. However, those national rules could otherwise hinder the exercise of freedom of establishment since, as the Court has consistently held, Article 43 EC precludes any national measure where that measure, even though it is applicable without discrimination on grounds of nationality, is liable to prevent, hamper or render less attractive the exercise by Community nationals, including those of the Member State which enacted the measure, of fundamental freedoms guaranteed by the Treaty. (11) 38. Any difference in treatment created by national provisions is also caught by that prohibition on imposing restrictions because such treatment is liable to render less attractive the exercise of a fundamental freedom for any person who is consequently placed at a disadvantage. 39. A terminology issue arises at this point on account of the Court's case-law, an issue which has implications in practice too. Many judgments delivered by the Court with regard to taxation contain the following formula:It is settled law that discrimination arises through the application of different rules to comparable situations or the application of the same rule to different situations. (12) 40. The above wording gives the impression that absolutely every instance of different treatment, and by extension every restriction, on the basis of any criteria whatsoever is (inherently) discriminatory. However, according to case-law, restrictions can indeed be justified by imperative requirements in the general interest but only if they are applied in a non-discriminatory manner. (13) On that basis, difference in treatment could never be justified by imperative requirements in the general interest, which is a contradiction in itself because justification on such grounds is expressly permitted. 41. That contradiction may be resolved only in the manner described below: The formula set out in point 39 is intended to cover more than just inherent discrimination by reason of nationality; it may also refer to other cases of different treatment which constitute an obstacle to freedom of establishment. Inherent discrimination, meaning that it can be justified only on the basis of the express derogations laid down by the Treaty in such provisions as Articles 45 EC and 46 EC in respect of freedom of establishment, (14) can arise only where there is a distinction on the basis of nationality or seat. Different treatment on other grounds may, like other obstacles, be justified by imperative requirements in the general interest. 42. To prevent any misunderstanding, in the following assessment of a further restriction on freedom of establishment imposed by the national rules, I shall refrain from using the word discrimination and shall refer only to different treatment. 43. In addition to providing for the non-taxation of gains acquired from subsidiaries pursuant to the first indent of Article 4(1) of the Parent-Subsidiary Directive, Article 13(1) of the Netherlands Wet op de Vennootschapsbelasting provides in general that, in determining the basis of assessment, the costs relating to a holding may not be deducted from the taxable profit. That fundamental rule is neutral and does not involve any difference in treatment since the unfavourable tax treatment associated with non-deductibility is equally detrimental to all parent companies that acquire holdings. Furthermore, under Article 4(2) of the Parent-Subsidiary Directive Member States are expressly permitted to adopt such rules. 44. The provision acquires a different meaning, however, as a result of the derogation provided therein in that, under that derogating provision, the unfavourable tax treatment in the form of non-deductibility does not affect parent companies whose costs incurred in relation to a holding are indirectly instrumental in making profit that is taxable in the Netherlands. In positive terms, parent companies covered by the above derogation obtain a tax benefit by having their basis of assessment reduced as a result of their being permitted to deduct holding costs. However, the granting of that tax advantage renders less attractive the exercise of freedom of establishment through the acquisition of subsidiaries which make their profit exclusively abroad, and consequently parent companies may be deterred from such acquisition in favour of acquiring holdings in the Netherlands. 45. The Court held in Asscher (15) and Baars (16) that a refusal to grant a single tax advantage may also constitute a restriction on freedom of establishment. 46. The Netherlands Government none the less insists that the national rules are not discriminatory because, rather than making a distinction on the basis of the subsidiary's seat, they make a distinction based on the criterion that the profit generated is taxable in the Netherlands. Moreover, the rules in question were in conformity with the principle of territoriality, under which the right enjoyed by any State to levy taxes applied only to the profits generated in the relevant State's own territory. 47. Considered together, those two points of view do, however, suggest that a subsidiary can generate profit that is taxable in the Netherlands only if it has its seat or at least a permanent establishment in the Netherlands. Under the principle of territoriality, profits are taxed only in the State where the company has its seat. Furthermore, profits which have already been taxed in other Member States as they accrued there to resident subsidiaries and are then transferred to the parent company in the Netherlands on the basis of the relevant agreement are exempt from further taxation in the Netherlands pursuant to the first indent of Article 4(1) of the Parent-Subsidiary Directive. The costs involved in owning holdings in subsidiaries resident in other Member States therefore cannot, in principle, be indirectly instrumental in making profits that are taxable in the Netherlands. 48. Such a situation is conceivable only where the non-resident subsidiary for its part operates permanent establishments in the Netherlands. Even in that case, however, residence in the Netherlands at least of part of a subsidiary is the decisive criterion in establishing that the parent company is subject to different treatment. 49. Moreover, determining specifically whether the rules make a distinction on the basis of the subsidiary's seat or, rather, on the basis of the place where the profit is made is of no great significance because here, unlike in cases of inherent discrimination, the seat is not the decisive factor. Other restrictions on the carrying on of a business activity across borders can also arise in the form of different treatment on the basis of other criteria. 50. In support of the difference in treatment, the Netherlands Government argues that the respective situations of resident and non-resident subsidiaries cannot be compared in practical terms. However, as already established above, the location of subsidiaries is irrelevant in this case because it is parent companies, not subsidiaries, that are subject to the Netherlands tax legislation at issue. The respective situations of parent companies can be compared in practical terms in that they are subject to tax in the Netherlands upon acquisition of a holding, irrespective of whether the company acquired has its seat in the Netherlands or in another Member State. 51. In Metallgesellschaft and Hoechst, (17) taking as its basis circumstances which are the very opposite of those arising in this case, where the subsidiary is subject to tax in the United Kingdom and its parent company is resident either in the United Kingdom or elsewhere, the Court in those circumstances ruled that the place of residence of the parent company may not lead to a difference in tax treatment for the subsidiary. 52. In X AB and Y AB (18) the Court had to rule on a set of circumstances comparable with that existing in this instance. There it expressly held that, in the granting of a tax advantage, the distinction made on the basis of the subsidiary's seat constitutes a difference in treatment which is prohibited within the context of freedom of establishment: The legislation in question in the main proceedings does not allow Swedish companies which have used their right to free establishment to form subsidiaries in other Member States to receive certain tax concessions upon a type C intra-group transfer. Thus, such legislation entails a difference of treatment between various types of intra-group transfers on the basis of the criterion of the subsidiaries' seat. In the absence of justification, that difference of treatment is contrary to the provisions of the Treaty concerning freedom of establishment .... 53. In the light of that ruling, it must now be assessed whether different treatment is justified under the Treaty. The parties have essentially raised two grounds of justification, first, the requirements of the Parent-Subsidiary Directive itself and, secondly, the cohesion of the Netherlands tax system as an imperative requirement in the general interest. Three additional grounds have been raised in connection with fiscal cohesion: the principle of territoriality, prevention of double taxation and protection of the integrity of the basis of assessment. 54. Since Member States are entitled under the Parent-Subsidiary Directive categorically to disallow deduction of holding costs, some of the parties take the view that that provision in itself justifies the Netherlands rules. Cases where Member States disallow deductibility only to a certain degree are considered by those parties to be somewhat of a disadvantage. It is necessary to examine whether that view is in conformity with the substance, spirit and purpose of the Parent-Subsidiary Directive. 55. According to its preamble, the directive is designed, in the interest of the internal market, which covers freedom of establishment, to promote the grouping together of companies of different Member States. However, the directive takes into account the individual interests of the Member States in maintaining their tax revenue, which is apparent from the derogations applying to individual States laid down in the fifth recital in the preamble and from the third recital in the preamble, cited earlier at point 3, in which the Community legislature notes that national provisions governing the grouping together of companies of the same State, laid down in the interest of maintaining the level of tax revenue available to the individual State, in general prove more advantageous than those governing the grouping together of companies of different States. The provisions of the directive can therefore be regarded as the outcome of the Community legislature's careful consideration of the Member States' interest in maintaining their tax revenue on the one hand against common market and internal market concerns on the other. 56. A central issue in the directive is the non-taxation of profits distributed from subsidiaries to parent companies. This is clear from the fact that that measure is not only contained in the first indent of Article 4(1) but is also mentioned as early as in the fourth recital in the preamble to the directive. To compensate somewhat for the requirement imposed by that provision that Member States forgo the revenue from taxation, in Article 4(2) the Community legislature conferred on the Member States the right in general to disallow deduction of holding costs for tax purposes, which constitutes unfavourable tax treatment for companies. 57. It follows from the first recital in the preamble to the directive, under which the grouping together of companies may not, in principle, be hampered by restrictions, disadvantages or distortions arising from the tax provisions of the Member States, that, apart from that specified restriction, Member States are not to be granted any scope for imposing further restrictions. Indeed, the provisions of the directive are to be interpreted narrowly, again on account of the fact that the directive is itself the outcome of a balancing of interests. 58. Although the directive permits Member States generally to disallow deduction of holding costs, it does not, however, provide for derogations. It cannot therefore provide any justification for the derogation under which part of the costs incurred in one State may be deducted provided that the related profit is made in the same State. However, if it did lay down a derogation to that effect, it would then be necessary to examine whether or not the directive itself offended against the principle of freedom of establishment, a principle enshrined in primary legislation within the Treaty. 59. The Netherlands rules are therefore inconsistent with Article 4(2) of the directive. 60. The principle of cohesion of the tax system was raised as a further essential ground to justify the difference in tax treatment. In its judgments in Bachmann (19) and Commission v Belgium (20) and in its more recent decisions the Court has consistently held that such cohesion presupposes a direct link between the grant of a tax advantage and the offsetting of that advantage by a fiscal levy, both of which relate to the same tax. 61. At paragraph 57 of its judgment in Verkooijen (21) the Court in that regard held: In Bachmann and Commission v Belgium, a direct link existed, in the case of one and the same taxpayer, between the grant of a tax advantage and the offsetting of that advantage by a fiscal levy, both of which related to the same tax .... 62. Also in Baars (22) , the Court pointed out that there was no direct link or purpose of safeguarding cohesion where different taxpayers were concerned. 63. The Netherlands rules establish a link between a tax advantage benefiting the parent company, in the form of deductibility of holding costs, and the option of levying tax on the subsidiary. As far as the Netherlands Government and the United Kingdom Government are concerned, that link creates the cohesion of the system. 64. However, there is at this point a failure to take account of the fact that parent companies and subsidiaries, unlike branches and permanent establishments, are separate legal entities, each having its own legal personality. They are taxed separately. Contrary to the submissions of the Commission and the Netherlands, they are not automatically to be regarded as a single consolidated entity for tax purposes. The distinction made here between parent companies having subsidiaries on the one hand and companies having permanent establishments on the other is justified by the very fact that a company is additionally liable for its permanent establishment, whereas a parent company is not required in the same way to assume liability for the losses incurred by its subsidiary. 65. Thus, the criterion, required by the Court, that there should be a direct link where the same tax is concerned, is not met. The linking of costs incurred by one taxpayer with the fiscal levy imposed on a different taxpayer cannot create a cohesive system. 66. Furthermore, the fiscal principle of territoriality, to which the Court referred in Futura Participations and Singer, (23) cannot be relied on in this case to substantiate cohesion of the system. The facts forming the basis of that judgment cannot be compared with the facts of this case. Futura Participations and Singer involved a permanent establishment of a foreign company which was located in Luxembourg and subject to tax there. Under the Luxembourg rules, the carrying forward of losses upon taxation in Luxembourg was subject to the condition that those losses should be related to the profit made by the permanent establishment itself. 67. That condition is consistent with the principle of territoriality under which, on levying tax on a taxpayer who carries on an economic activity within a State, account is (can be) taken only of the profits and losses it has made in that State. However, under the Netherlands system, deductibility of holding costs in the levying of tax on one person is subject to another person, that is to say the subsidiary which is to be distinguished from the parent company, making profit in the Netherlands. It is none the less impossible to deduce from the territoriality principle that the profits and losses accruing to different taxpayers can be offset against each other. 68. The cohesion of the system is, in actual fact, safeguarded by the provisions of the Parent-Subsidiary Directive. Article 4(1) of the directive, under which the levying of tax a second time on profits transferred from subsidiaries may be dispensed with, establishes a tax advantage for parent companies. To offset that measure, Article 4(2) of the directive introduces, in the form of a tax burden on parent companies, the option of non-deductibility in respect of holding costs which have led to such profits. 69. As a result of the measure contained in Article 4 of the directive, double taxation is prevented and, unlike under the Netherlands arrangement, parent companies which have subsidiaries abroad are not placed at a disadvantage in terms of deductibility of costs. In Article 13 of the Wet op de Vennootschapsbelasting the Netherlands legislature prevents double taxation by introducing exemptions for holdings, a measure consistent with the fundamental objective of Article 4 of the directive. Under that exemption, neither the profits nor the costs of a holding are taken into account in determining the profit of the parent company. However, the other provisions, which grant preferential treatment exclusively to parent companies that have resident subsidiaries, have no bearing on prevention of double taxation. 70. Moreover, the Netherlands Government argues that the rules are justified by their objective to maintain the level of tax revenue. On the one hand, the Court has on a number of occasions already held in this regard that diminution of tax revenue is not one of the grounds of justification listed in Article 46 EC and cannot be regarded as a matter of overriding general interest that may be relied upon in order to justify unequal treatment which is, in principle, incompatible with Article 43 EC. (24) 71. On the other hand, however, this case specifically concerns a provision that introduces a disadvantage in that it reduces the tax burden only for certain individuals, and this cannot be justified by the objective of maintaining tax revenue. The Netherlands retain the right to disallow in all cases the deduction of holding costs from taxable profits pursuant to Article 4(2) of the Parent-Subsidiary Directive. In those circumstances tax revenue is increased rather than diminished. As the Commission explained in its written answer of 14 June 2002 to the question raised by the Court, Austria for example applies such an arrangement. 72. It is consequently established that equal treatment as between undertakings of the same State and undertakings of different States is the prerequisite for a set of rules laid down by the Netherlands legislature that is consistent with Community law. Whether the legislature in that respect specifies whether or not the holding charges can be deducted, in a uniform manner, from the profit of the parent company is a matter that Article 4(2) of the Parent-Subsidiary Directive fails to address. 73. I should like to emphasise once more that the Community legislature in this respect deals with situations where holding costs are not taken into consideration when it comes to taxing either the parent company or the subsidiary. This is apparent from the fact that the directive expressly permits the Member States to preclude deduction from the profits of parent companies but does not provide that the costs accruing can in that event be charged to the subsidiary. 74. The answer to the first question referred should therefore be that, on a proper construction, Article 43 EC, in conjunction with Article 48 EC, precludes national rules which provide that a Member State may grant a parent company subject to tax in that Member State a deduction on costs relating to a holding owned by it provided that the relevant subsidiary makes profits that are subject to tax in the Member State in which the parent company is established. B ─ The second question referred (1) Submissions of the parties 75. Bosal takes the view that the internal cohesion of the national tax system would in any event be enhanced if, where the subsidiary but not the parent company is subject to tax on its profit in the Netherlands, that State were to take into account the costs incurred by the parent company in respect of its holding. 76. The Netherlands Government considers that the second question is irrelevant because in this case it is a parent company, not a subsidiary, that is seeking deduction of costs from its profit. It claims that the first and second questions referred should be answered separately because the circumstances forming the basis of each question are not comparable. The Netherlands could not, in its view, be held responsible for preventing every case of double taxation as, in the situation described in question 2, it is for the State in which the foreign parent company is established to ensure such prevention. The problem arose out of the disparity between the tax systems and the fact that harmonisation, albeit desirable, had not as yet been achieved. 77. The United Kingdom Government considers that the answer to the second question makes no difference to the fact that the Netherlands rules are justified by the principle of cohesion. 78. Although the Commission takes the view that the Netherlands should also allow holding costs incurred by a foreign parent company to be deducted from the taxable income of a subsidiary established in the Netherlands, which it does not under the existing rules, this matter is in any case irrelevant as regards answering the first question. Moreover, Bosal has not contested that part of the rules in this case. (2) Assessment 79. It has been established with regard to the first question that the situation underlying the Netherlands rules, namely the refusal in general to allow deduction of holding costs, constitutes a coherent set of rules which is also compatible with the Parent-Subsidiary Directive. The derogation laid down in the provision, that a tax advantage is to be granted to parent companies having subsidiaries that make profits in the Netherlands, is the only measure that undermines the cohesion of the system by placing parent companies that have foreign subsidiaries at a disadvantage. 80. That disadvantage could be offset by the grant of a tax advantage to subsidiaries of foreign parent companies only if there were a direct link between that tax advantage and the levy imposed on disadvantaged parent companies. As stated previously, absolutely no such link exists between the levying of tax on a parent company and the levying of tax on its own subsidiary because these are separate legal entities. In that case, then it truly is impossible to establish the essential link between a resident parent company and subsidiaries of a different, foreign parent company. 81. Irrespective of that matter, the Court has already held on several occasions that unfavourable tax treatment contrary to a fundamental freedom cannot be justified by the existence of other tax advantages, even supposing that such advantages exist. (25) 82. Where it is considered necessary for the holding costs to be deductible at all, rules under which such costs must be deducted from the profits of subsidiaries could be no more than a supplement to the system under the Parent-Subsidiary Directive. In that case, however, it would be necessary, for the purpose of equal treatment, to facilitate the uniform application of that measure across the Community. According to the information provided by Bosal during the proceedings, that is not the case at least in the Member States where it has subsidiaries, that is to say in Belgium, France, the United Kingdom, Ireland, the Netherlands, Germany, Denmark, Spain and Italy. 83. However, even such rules applicable across the Community could have no impact on the established different treatment under the Netherlands rules of parent companies which have foreign subsidiaries. On the contrary, should the Netherlands rules be retained, groups entirely composed of resident undertakings would, in theory, be in a position to claim holding costs twice. In the absence of appropriate offsetting procedures, they could proceed with such claims first, when the parent company is taxed, on the basis of the Netherlands rules and secondly, when the subsidiary is taxed, on the basis of the Community requirement that costs must be taken into account in the case of subsidiaries. 84. The answer to the second question referred should therefore be that it makes no difference to the answer to Question 1 whether, where the subsidiary is subject to tax based on its profits in the Member State concerned but the parent company is not, the relevant Member State takes account of the abovementioned costs in levying tax on the subsidiary. VI ─ Conclusion 85. In the light of the foregoing considerations, I propose that the Court should answer the questions referred by the national court as follows: (1) On a proper construction, Article 43 EC, in conjunction with Article 48 EC, precludes national rules which provide that a Member State may grant a parent company subject to tax in that Member State a deduction on costs relating to a holding owned by it provided that the relevant subsidiary makes profits which are subject to tax in the Member State in which the parent company is established. (2) It makes no difference to the answer to Question 1 whether, where the subsidiary is subject to tax based on its profits in the Member State concerned but the parent company is not, the relevant Member State takes account of the abovementioned costs in levying tax on the subsidiary. 1 – Original language: German. 2 – OJ 1990 L 225, p. 6. 3 – Cf. both the first and the third recitals in the preamble to the directive. 4 – Case C-204/90 Bachmann [1992] ECR I-249. 5 – Case C-55/00 Gottardo [2002] ECR I-413, paragraph 32, Case C-264/96 ICI [1998] ECR I-4695, paragraph 19, and Case C-279/93 Schumacker [1995] ECR I-225, paragraph 21. 6 – Joined Cases C-397/98 and C-410/98 Metallgesellschaft and Hoechst [2001] ECR I-1727, paragraph 41. 7 – Case C-251/98 Baars [2000] ECR I-2787, paragraphs 20 to 22. 8 – .Baars (cited in footnote 7, at paragraph 28), Case C-200/98 X AB and Y AB [1999] ECR I-8261, paragraph 26, and Case 81/87 Daily Mail and General Trust [1988] ECR 5483, paragraph 16. 9 – Case C-307/97 Compagnie deSaint-Gobain [1999] ECR I-6161, paragraph 36, Case C-264/96 ICI (cited in footnote 5, at paragraph 20), and Case 270/83 Commission v France [1986] ECR 273, paragraph 18. 10 – Case C-279/93 Schumacker (cited in footnote 5, at paragraph 26), Case C-330/91 Commerzbank [1993] ECR I-4017, paragraph 14, and Case 152/73 Sotgiu [1974] ECR 153, paragraph 11. 11 – Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 37, and Case C-19/92 Kraus [1993] ECR I-1663, paragraph 32. 12 – Case C-391/97 Gschwind [1999] ECR I-5451, paragraph 21, Case C-107/94 Asscher [1996] ECR I-3089, paragraph 40 and Case C-80/94 Wielockx [1995] ECR I-2493, paragraph 17. 13 – .Gebhard (cited in footnote 11, at paragraph 37). 14 – Case C-288/89 Collectieve Antennevoorziening Gouda and Others [1991] ECR I-4007, paragraph 11. 15 – Cited in footnote 12, at paragraph 42. 16 – Cited in footnote 7, at paragraphs 30 and 31. 17 – Cited in footnote 6, at paragraph 60. 18 – Cited in footnote 8, at paragraphs 27 and 28. 19 – Cited in footnote 4. 20 – Case C-300/90 Commission v Belgium [1992] ECR I-305. 21 – Case C-35/98 Verkooijen [2000] ECR I-4071, paragraphs 56 to 58. In this judgment the overriding public interest requirements for cohesion of the tax system were assessed against the background of a possible infringement of the freedom of movement for capital. 22 – Cited in footnote 7, at paragraph 40. 23 – Case C-250/95 Futura Participations and Singer [1997] ECR I-2471, paragraph 22. 24 – .Metallgesellschaft and Hoechst (cited in footnote 6, at paragraph 59), Compagnie deSaint-Gobain (cited in footnote 9, at paragraph 51) and ICI (cited in footnote 5, at paragraph 28). 25 – .Verkooijen (cited in footnote 21, at paragraph 61), Compagnie deSaint-Gobain (cited in footnote 9, at paragraph 54), Commission v France (cited in footnote 9, at paragraph 21).

Lord Justice Hughes: This is an appeal in care proceedings. It is contended that the judge was wrong to discharge a care order upon a 15 year old boy without sufficiently considering the possible future impact of the leaving care provisions. The slightly unusual feature of the case is that, with a background of longstanding and unremitting hostility by mother to the idea of a care order, the case came back to the judge on her application to discharge the order, yet it is she who now contends that the judge ought not to have done so. Nevertheless, and although the guardian supported the discharge of the order before the judge, mother is supported today by counsel appearing on behalf of the child who has been able to take rather different instructions from those which had been available in the court below. Even if mother has no merit in any complaint from her own point of view that her belatedly formed wishes did not prevail, it is nevertheless necessary for the sake of the child to examine the question of whether the judge went wrong. The mother has four sons by two different fathers. The eldest two are now 19 and seventeen and a half respectively. The third, J, born on 24 August 1993, is the subject of the present appeal. At the time the judge dealt with the application in April, J was four months short of his sixteenth birthday. There is, for completeness, also a younger son, W, born in August of 1996, who at the time of the hearing before the judge was not yet 13. There is quite a long history of social services involvement from time to time. It began not later than 1993 when mother was approximately 30. There is in the background a good deal of parental conflict. Father was sometimes in trouble with the police, mother lost a job for allegedly stealing, the children were neglected, and successively their behaviour proved disruptive, aggressive and often untruthful. There was a period of about a year in 2003 to 2004 when mother was wholly absent, leaving the children with father. In due course care proceedings were taken, and after a succession of interim orders which were made on the basis that the boys would be left at home on trial with mother, the younger three were removed after a contested hearing before the County Court in March of 2005. By then the eldest boy was rising 16 and beyond the power of the local authority to achieve anything helpful, because wherever he was placed he ran away back to the family home and there was supported by mother in his absconsions. In those circumstances the local authority did not press an application for a care order in his case, and this is a history which has subsequently proved prophetic. The judge who dealt with that removal decision in March 2005 was the same judge who was later to make the order now under appeal. He could not avoid finding that both parents had sadly failed the children. The children were wayward and often out of control. The parents were now apart, and mother displayed towards the local authority the unremitting hostility which I have already mentioned. That made it virtually impossible to achieve anything very useful for the boys under the care order. It ought to be said that her hostility was not limited to the local authority because two different schools wrote to say that her behaviour there made the school's task in attempting to educate the younger two boys the next best thing to impossible. The letter from one school in particular, which came from an author who was by no means unused to difficult behaviour, described the sabotage of J's schooling in pursuit of mother's own need to give way to her anger as being at a level that he had not seen in 27 years' experience. I should also record that as well as the judge now under appeal, Pauffley J made similar findings about mother's stance in April 2005. As time went by, in August 2008, by which time the second son was rising 17, a similar situation obtained in his case to that which had previously obtained in the case of the eldest. At that stage the local authority did not in those circumstances oppose mother's application to discharge his care order. That left care orders in place for J, with whom we are now concerned, and also W. By the time of the hearing now under appeal in April 2009, J, the third son, was following the pattern of behaviour which had previously been demonstrated by the elder two. He was persistently absconding from wherever the local authority put him to live. Some times he went to father, but latterly had gone to his mother, and time and time again. She for her part remained convinced that he was very much better off with her and that there ought not to be a care order or any significant role for the local authority. The local authority had returned him on numerous occasions to the children's home where he was by 2008 living, sometimes with the help of the police and once under a recovery order, but none of that was to any avail. The recovery order was in September of 2008, but by October he was again absent without leave and back with mother. The local authority was satisfied that what he needed was not so much the children's home where they had currently to place him, but a therapeutic foster placement. It was able to find one and to propose it, but the combined resistance of J supported by his mother made it impossible of achievement. As long ago as August 2008 mother had lodged an application to discharge the care order in relation to J, and indeed for that matter in relation to W as well. In the event it did not come on for hearing until April 2009. Consistently with its previous treatment of the first and second sons, the local authority took the position that the care order simply could not be effective in the face of the determined resistance of J, but particularly because he was supported by his mother. Accordingly the local authority gave notice that whilst it was not what it wanted, it would not oppose the discharge which the mother sought in J's case. Reviewing the position, the Guardian ad Litem reached the same conclusion. Accordingly, until a day or two before the hearing, the court was faced with a situation in which all parties accepted that the care order ought to be discharged. At that point at the last moment mother changed her stance. Instead of pursuing her longstanding application for discharging the care order, she asked the judge to adjourn any hearing of her application, already some months old as it was, until after J had passed his sixteenth birthday. Her purpose was transparent. It was to enable J to qualify for the leaving care provisions and potentially for financial assistance after the care order had gone, as she hoped that it would. Such assistance might include assistance to herself for food and accommodation provided to him. Accordingly mother sought leave to withdraw her application. The judge in due course refused that but in any event he allowed the local authority to make its own application for discharge. In the event his decision was that the order should indeed be discharged, and it is against that decision that mother now appeals, supported, as we say, not by the guardian, whose stance remains the same, but with perfect propriety by Mr Coleman, who appears for J on the basis of very recent instructions, which we of course accept J has been able to give directly through his solicitor. The leaving care provisions were introduced into the Children Act 1989 by the Leaving Care Act 2000. The purpose was clearly to try to place children who have been in the care of the local authority in some position at any rate approximating to the support which is enjoyed by children with responsible parents at the stage when they are beginning to become independent and will be leaving home. Baroness Hale of Richmond put it succinctly in R (M) v Hammersmith and Fulham LBC [2008] UKHL 14, [2008] 1 FLR 1384 at paragraph 21: "The aim was to supply for those older children the same sort of continuing support and guidance which children can normally expect from their own families as they move from childhood to adulthood." The leaving care provisions apply to a "relevant child as defined by section 23A(2) of the Children Act". In effect they apply to a child who is 16 or 17 who is no longer being looked after and who was "eligible" when last looked after. For the concept of eligibility it is necessary to go to Schedule 2 of the Children Act, paragraph 19B(2), which provides that a child must have been looked after for a prescribed period after a prescribed age, but, critically for present purposes, ending after the age of 16. The prescription is provided by the Children (Leaving Care) (England) Regulations, regulation 3. A child must have been looked after for 13 weeks after the age of 14 and ending after 16. J, who had been in care for some years, would satisfy that test if -- but only if -- he is still looked after some time after his sixteenth birthday. Accordingly, what mother was asking the judge to do was to preserve the care order, not because she thought it ought to continue for a length of time, but only so that it could continue beyond J's sixteenth birthday and then be discharged. The judge took the view that this order ought to be discharged. For mother, Mr Hepher submits that he went wrong in a number of ways. Principally, he submits that the judge erred in taking into account the emptiness of this particular care order and its lack of any effect. Says Mr Hepher, that consideration was really neutral. If the judge had properly considered the potential benefits to J under the leaving care provisions, he would have been bound to conclude that the order should be continued when applying the welfare test to this case. Mr Hepher also urged on us the proposition that before a care order could be discharged, a positive benefit to the child must be demonstrated. Thirdly, Mr Hepher submits that the judge erred in having regard to the position of the local authority under the order, and in particular to the potential impact of its duty under regulation 11 of the Placement of Children with Parents Regulations 1991. In all those circumstances, he submits that the judge was wrong in law, and indeed plainly wrong in the exercise of any discretion that he had, to fail to find that this care order ought to be preserved until J was 16 in order that he should come within the leaving care provisions. The test upon an application for discharge is clearly set out by this court as long ago as 1995 in Re S (Discharge of Care Order [1995] 2 FLR 639 at 643. As Waite LJ put it: "Section 39 of the Act allows the court to discharge a care order on the application of (inter alios) a parent. Here the jurisdiction is discretionary from the outset (there being no obligation on the parent to satisfy the court that the threshold requirements no longer apply). The issue has to be determined by the court in accordance with s 1 of the Act, which (by s 1(1)) makes the child's welfare the court's paramount consideration …" I need not read the remainder. I entirely agree that the applicant for such an order must make out his case. It does not follow from that that the test is simply a matter of listing potential benefits. Welfare is a more complicated and rounded consideration than that. I am quite satisfied that the judge is entitled to take into account the continuing effect, or in this case lack of effect, of the care order. The judge found on ample evidence that this was a care order to which the local authority simply could not give proper effect. It is true of course that the fact that a child who is the subject of a care order proves recalcitrant, obstructive and uncooperative is in no sense a justification for the local authority washing its hands of him. Young people who are difficult, obstructive or recalcitrant are often precisely the young people for whom a care order is a necessary, if unwelcome, protection. They may be children in considerable need. J is certainly in some need, but that does not mean that the judge is not entitled to take account in his decision of what is involved in preserving a care order. This one set up conflict. Pending the hearing of mother's application, it is true that the local authority had reached the pragmatic conclusion that to attempt further recovery of J, and forcible return, would in the end do more harm than good. But the fact remained that that pragmatic decision put the local authority in clear breach of its statutory duty. The local authority was under the general duty provided for by section 22(3) of the Act to safeguard and promote J's welfare. Specifically where the child is allowed to live with a parent, the combination of section 23(4) and (5) is to permit it only in accordance with regulations. The relevant regulations are the Placement of Children with Parents etc Regulations 1991 (SI 1991/893). A child may be permitted to live with a parent only according to regulation 4 if the local authority is satisfied that the placement is the most suitable way of performing its duty under section 22(3), that is to say, the duty to safeguard and promote the child's welfare. This authority was not so satisfied, just the contrary. Under regulation 7, agreement must be reached with the parent as to plans and objectives and ancillary matters set out in Schedule 2. The prospect of any sensible agreement in this case was exiguous. Under Regulation 11, "If it appears to a local authority that the placement is no longer in accordance with their duty in respect of the child under section 22(3) of the Act or would prejudice the safety of the child, they shall terminate the placement and shall remove the child forthwith from the person with whom he is placed." The judge overstated the position if, as seems likely, he concluded that the local authority would in fact attempt further forcible removal of J from his mother, but he did not overstate the legal duty of the authority to do so. So long as this care order remained, the local authority could not comply with its duty under section 23(5) and the regulations, or with its duty under section 22(3) in the circumstances which in fact existed. That, as it seems to me, was a relevant consideration for the judge, although of course not determinative. The attack on his conclusions for taking it into account, accordingly fails. That consideration certainly needed to be balanced against the potential advantages under the leaving care provisions of preserving even an empty husk of a care order. The judge did not in terms in his judgment identify those in any detail, but it is perfectly plain that he was conscious of them: this hearing had taken three days and a substantial amount of evidence had been given. It was and had been solely the potential advantages of the leaving care provisions which were advanced as a reason for not discharging the care order. For my part I can see that there might sometimes be cases in which a care order ought to be preserved for that reason. We are told in the present case, albeit very belatedly, that J has ambitions to look for a tradesman's course in bricklaying and he would, I have little doubt, if he were to cooperate, derive some benefit from such assistance as the local authority might give in looking for it. That, however, would only arise if he would on the facts of his case be within the leaving care provisions. In fact it seems to me he would not. The relevant regulation is regulation 4 of the Children (Leaving Care) (England) Regulations 2001 (SI 2001/2874). Sub paragraph (5) of the regulations says this: "(5) Subject to paragraph (7), any child who has lived with a person falling within section 23(4) of the Act ("a family placement") for a continuous period of six months or more is not to be a relevant child despite falling within section 23A(2) of the Act.  (6) Paragraph (5) applies whether the period of six months commences before or after a child ceases to be looked after by a local authority.  (7) Where a family placement within the meaning of paragraph (5) breaks down and the child ceases to live with the person concerned, the child is to be treated as a relevant child." The reference in paragraph (5) to section 23(4) of the Act takes one to a list of persons who include a parent of the child. J had by the time of the hearing before the judge been living with his parent, that is to say, his mother, for approximately six months since October of 2008. Certainly now he has been living with her for a good deal longer than that. We were invited to hold that in order for regulation 4(5) to apply, the child must not only as a matter of fact have been living with his parent but have been placed there by the local authority, having a care order. As it seems to me, there is no occasion to construe regulation 4(5) in that way. The purpose of the leaving care regulations is transparently the one identified by Baroness Hale. It is equally clear that the scheme of these regulations is to take out of the leaving care provisions children who, rather than having to turn to the local authority for substitute parents, are in fact living with their own parents. Regulation 4(5) seems to me to ask for an answer to a question of fact. The insertion of the expression "a family placement" in brackets is explained by the necessity to anticipate paragraph 7, which would otherwise have to be expressed in complicated and inelegant terms. There is, as it seems to me, no occasion to import into regulation  4(5) the concept of placement as it appears in other regulations, including the placement with Parents etc regulations. In those circumstances J does not fall within the leaving care provisions in any event. Even were the construction which has been urged on us correct, the leaving care provisions could only apply to him for a maximum of six months, if mother's desire for the discharge of the care order were to be fulfilled immediately after his sixteenth birthday or as soon as a court appointment could be found. A child living with a parent or parents who is thus outside the leaving care provisions is not, of course, without recourse to the resources of the local authority if at some time in the future his home should break down. Such a child, if still under 18, would be likely to be a child in need and the local authority would have a clear obligation to accommodate if necessary under section 20. Once it did so, the child would become a looked after child and would for that reason become a relevant child to whom the leaving care provisions would apply. For my part, I accept that a court faced with an application of this kind would need in some circumstances to be alert to the possible incentive to the local authority to resist the inclusion of additional young people in the leaving care provisions. Those provisions are without doubt capable of being onerous. The provisions are, however, the clear result of considered statutory obligation. In another case a court might have to deal with the situation of a local authority seeking a discharge of a care order on the improper grounds that it would reduce the call on the leaving care provisions. Neither, however, is not this case. This local authority did its best on the judge's findings with this care order. It remained ready to make available a therapeutic foster placement for J. The initiative for the discharge of the care order did not come from the local authority but from mother. The local authority's position was reluctantly to acquiesce in unfortunate reality. Lastly, some criticism was directed to the judge for observing that it was contrary to J's best interests for him to "learn a lesson that he can take from the Local Authority without giving anything in return; that he can 'cock a snoop' at it when it wants to exercise authority over him, but can still receive the benefits which may flow from the order which he otherwise disregards". For my part, I agree with Mr Hepher's submission that the jurisdiction to discharge a care order must not be exercised as some kind of reprimand or punishment to a child, but that is not what the judge was saying. What he was saying, in considering welfare generally, was that it is not in the interests of a child to learn that it is proper to take all the benefits without any responsibility in return. That was clearly not the principal reason for the judge's decision. It was something which he expressed with some force in the course of an extempore judgment. But it does, not I am satisfied, vitiate the proper basis for his decision which appears elsewhere in his judgement. For all the reasons that I have endeavoured to set out, I am wholly unpersuaded by the proposition that the judge was wrong and in those circumstances I would dismiss this appeal. I am reminded this was an application for leave. For my part the course that I would take is to give leave, the point being arguable, but dismiss the appeal. Lord Justice Laws: I agree Lord Justice Richards: I also agree Order: Application granted; appeal dismissed

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1366, 1850 to 1863 2550 to 2551 of 1969, 1355 1356 of 1970,and 1292 and 1293 of 1973. From the Judgments Order dated the 1st March/26th February 1969/29th July/2nd August, 1971 of the Madras High Court in W.Ps. Nos. 1895 of 1966, 1084, 1192, 1194, 1800, 1896, 1898, 1907-1910, 2089 of 1966, 646 of 1967, 3536-3537 of 1965 and Tax Cases Nos. 57 58 of 1969 and 191 197 of 1971 respectively. Govind Swaminathan, Advocate General for the State of Tamil Nadu, A. V. Rangam, K. Venkataswami, N.S. Sivam and A. Subhashini, for the appellants In all the Appeals SLP No. 1974/70 Abdul Karim and K. Rajendra Choudhary, for the respondents In 1366, 1850-53 1858-1861/69 V. Pillai, for the respondents In 1854/69 C Agarwala, for the applicant intervener. K. Sen and S. Gopalakrishnan, for respondents In 2550- 51169, 1355-1356/70 and 1292-1293/73 . The Judgment of the Court was delivered by ALGIRSWAMI, J.-These appeals raise the question of the validity of section 2 1 of Madras Act 37 of 1964. That section reads as follows Special provisions in respect of tax on sale of dressed hides and skins in certain cases - Notwithstanding anything companytained in the Madras General Sales Tax Act, 1939 Madras Act IX of 1939 hereinafter referred to as the said Act , or in the rules made thereunder hereinafter referred to as the said Rules , in respect of sale of dressed hides and skins which were number subjected to tax under the said Act as raw hides skins , the tax under the said Act shall be levied from the dealer who in the State is the first seller in such hides and skins number exempt from taxation under sub-sec. 3 of Sec. 3 of the said Actfor the period companymencing on the 1st April 1955 and ending on the 31st March 1957, at the rate of one ninesixteenth per cent, and for the period companymencing on the 1st April-, 1957 and ending on the 31st March 1959, at the rate of two per cent, of the amount for which such hides and skins were last purchased in theuntanned companydition. In order to understand the implications of this section it is necessary to refer to certain other provisions of law and two previous decisions of this Court. Rule 16 of the Madras General Sales Tax, Rules made under Madras Act IX of 1939 read as follows In the case of untanned hides and or skins the tax under Sec. 3 1 shall be levied from the dealer who is the last purchaser in the State number exempt from taxation under Sec. 3 3 en the amount for which they are bought by him. 2 i In the case of hides or skins which have been tanned outside the State the tax under Sec. 3 1 shall be levied from the defer who in the State is the first dealer in such hides or skins number exempt from taxation under Sec. 3 3 on the amount for which they are sold by him. In the case of tanned hides or skins which have been tanned within the State, the tax under sec. 3 1 shall be levied, from a person who is the first dealer in such hides or skins number exempt from taxation under Sec. 3 3 on the amount for which they are sold by him. Provided that, if he proves that tax has already been levied under Sub-rule 1 on the untanned hides and skins out of which the tanned hides and skins had been produced he ,hall number so liable. This Rule was struck down by this Court on the ground that where a tanner buys raw hides and skins inside the State and sells them after tanning he pays the tax only on the purchase price of raw hides and whereas a dealer who purchases raw hides and skins from outside the State and sells the tanned hides and skins pays the tax on the price for which tanned hides and skins are sold and therefore pays more tax. The judgment of this Court in Firm A.T.B. Mehtab Majid Co. v. State of Madras is reported in 1963 Supp. S.C.R. 435. Thereafter the Madras Legislature passed Act 11 of 1963 to deal with this situation. Section 2 1 of that Act reads as follows, Special provision in respect of tax on sale of dressed hides and skins in certain cases-- Notwithstanding anything companytained in the Madras General Sales Tax Act 1939 Act IX of 1939 hereinafter referred to as the said Act , or in the rules made thereunder hereinafter referred to as the said Rules , during the period companymencing on 1st April, 1955 and ending on the 31st March, 1959, in respect of sale of dressed hides and skins which were number subjected to tax under the said Act as raw hides and skins the tax under the said Act shall be levied from the dealer who in the State is the first seller in such bides and skins number exempt from taxation under sub-sec. 3 of Sec. 3 of the said Act at the rate of two par cent of the amount for which such hides and skins were last purchased in the untanned companydition. It would be numbericed that this section deals with the soles during the period between 1st April 1955 and 31st March 1959. From 1st April 1955 to 31st March 1957 the rate of taxation in Madras State, was one and nine-sixteenth per cent. As the section provided a uniform rate of two per cent for sales during the whole of the period between ist April 1955 and 31st March 1959 it was struck down by this Court in A. Hajee Abdul Shakoor Co. v. State of Madras 1964 8 S.C.R. 217 on the ground that for the period from 1st April, 1955 to 31st March, 1957 there was a discrimination between a tanner who tans from raw hides and skins purchased inside the State who would pay only one and nine sixteenth per cent on the raw hides and skins purchased by him and a tanner who purchased skins and hides from outside the State who would have to pay at the rate of two per cent under this section. It is to get over this objection that the section first referred to has been passed. Under the section the tax is leviable on the first seller of dressed hides and skins at the rate of one and ninesixteenth per cent for the period between 1st April 1955 and 31st March 1957. For the period between 1 st April 1957 and 31st March 1959 it is to be at the rate of two percent. The tax is on the amount for which such hides and skins were last purchased in the untanned companydition. It would be numbericed that it does number make any distinction between the purchase of raw hides and skins inside the State and outside the State. The tax itself is on the first sale of the tanned hides and skins but it is calculated on the basis of the purchase per price of the raw hides and skins whether they word purchased inside the State or outside the State. The out of-State purchase of raw hides and skins is number taxed. That would be subject to tax under the Central Sales Tax Act. But what is taxed under the impugned statute is number the purchase of raw hides and skins whether inside or outside the State. In both cases it is on the first sale of tanned hides and skins. Even if a person purchases raw hides and skins inside the State and sells it after tanning he pays the tax on the sale of the tanned hides and skips and number on the purchase of the raw hides and skins though the amount of tax payable is calculated on the amount for which such raw hides and skins were purchased. Similar is the position with regard to raw hides and skins purchased outside the State. Thus there is numberdiscrimination between the sellers of tanned hides and skins whether the raw hide and skins out of which they were tanned were purchased inside the State or outside the State. The tax is number leviable even in ,case of raw hides and skins imported from another State but on hides and skins tanned from those raw hides and skins. Only the tax is levied on the amount for which the raw skins and hides were purchased. This amount is used only for the purpose of quantification of the tax. The tax is number on the purchase of the raw hides and skins. We do number, therefore, sea how the tax levied on the sale of tanned hides and skins companytravenes Articles 286 of the Constitution. Actually as the value of hides and skins in their tanned companydition is higher than the value of raw hides and skins from out of which they are tanned the person importing raw hides and skins from outside the State can have numbergrievance that the tax is levied number on the amount for which the tanned hides and skins are sold but on the amount for which raw hides and skins have been purchased. Nor does he pay a higher tax than the person who sells hides and skins tanned from locally purchased raw hides and skins. It was open to the State to have levied the tax on the sale price of tanned hides and skins in which case there companyld have been numberargument that it was a tax on the imported Raw hides and skins. But the State chose to levy the tax on the basis of the purchase price of raw hides and skins which would mean lesser tax. it does number suffer from the vice of taxation of the imported raw hides and skins. We are unable to understand the view of the High Court that if the sale price were taxed and rebate were given then there would be numberobjection to the tax. Wa do number understand how that can be done. We asked the learned advocates appearing for the respondents to tell us how that can be done and they were number able to do so. The companyt of companyversion of the raw hides and skins to tanned hides and skins might differ from tanner to tanner. It is much easier to get figures. for the purchase price of the raw hides and skins or the sale price of the tanned hides and skins than the companyt of companyversion. As the scheme of taxation is number on the basis of the sale price of tanned hides and skins the suggestion of the High Court cannot be adopted. We, therefore, hold that the High Court was in error in striking down the impugned provision of law. In S.L.P. No.

Case C-79/10 Systeme Helmholz GmbH v Hauptzollamt Nürnberg (Reference for a preliminary ruling from the Bundesfinanzhof) (Directive 2003/96/EC – Taxation of energy products and electricity – Article 14(1)(b) – Exemption of energy products used as fuel for the purpose of air navigation – Use of an aircraft for other than commercial purposes – Scope) Summary of the Judgment 1. Tax provisions – Harmonisation of laws – Taxation of energy products and electricity – Exemption of energy products used as fuel for the purpose of air navigation other than private pleasure-flying – Extent (Council Directive 2003/96, Art. 14(1)(b)) 2. Tax provisions – Harmonisation of laws – Taxation of energy products and electricity – Exemption of fuels used in the field of the manufacture, development, testing and maintenance of aircraft – Extent (Council Directive 2003/96, Art. 15(1)(j)) 1. Article 14(1)(b) of Directive 2003/96 restructuring the Community framework for the taxation of energy products and electricity must be interpreted as meaning that the exemption from tax of fuel used for the purpose of air navigation, under that provision, cannot apply in the case of a company that, in order to develop its business, uses an aircraft belonging to it to transport members of its staff to customers or to trade fairs, in so far as that travel is not directly used for the supply, by that company, of air services for consideration. (see para. 33, operative part 1) 2. Article 15(1)(j) of Directive 2003/96 restructuring the Community framework for the taxation of energy products and electricity must be interpreted as meaning that the fuel used for the purpose of flights to and from an aircraft maintenance facility does not fall within the ambit of that provision. (see para. 39, operative part 2) JUDGMENT OF THE COURT (Fourth Chamber) 1 December 2011 (*) (Directive 2003/96/EC – Taxation of energy products and electricity – Article 14(1)(b) – Exemption of energy products used as fuel for the purpose of air navigation – Use of an aircraft for other than commercial purposes – Scope) In Case C‑79/10, REFERENCE for a preliminary ruling under Article 267 TFEU from the Bundesfinanzhof (Germany), made by decision of 1 December 2009, received at the Court on 11 February 2010, in the proceedings Systeme Helmholz GmbH v Hauptzollamt Nürnberg, THE COURT (Fourth Chamber), composed of J.-C. Bonichot, President of the Chamber, A. Prechal (Rapporteur), L. Bay Larsen, C. Toader and E. Jarašiūnas, Judges, Advocate General: E. Sharpston, Registrar: K. Sztranc-Sławiczek, Administrator, having regard to the written procedure and further to the hearing on 5 May 2011, after considering the observations submitted on behalf of: – Systeme Helmholz GmbH, by G. Real, Wirtschaftsprüfer/Steuerberater, – the Hauptzollamt Nürnberg, by S. Junker, Regierungsdirektor, and D. Jakobs, Prozessbevollmächtigter, – the French Government, by G. de Bergues, B. Cabonat and B. Beaupere-Manokha, acting as Agents, – the Cypriot Government, by E. Symeonidou, acting as Agent, – the European Commission, by W. Mölls, acting as Agent, having decided, after hearing the Advocate General, to proceed to judgment without an Opinion, gives the following Judgment 1 This reference for a preliminary ruling concerns the interpretation of Articles 11(3), 14(1)(b) and 15(1)(j) of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51). 2 The reference has been made in proceedings between Systeme Helmholz GmbH and the Hauptzollamt Nürnberg (Nuremberg Customs Office; ‘the Hauptzollamt’), concerning the Hauptzollamt’s refusal to refund the excise duty on mineral oil (‘mineral oil duty’) paid by Systeme Helmholz on the fuel for an aircraft owned by it, on the ground that the company is not an air carrier. Legal context European Union (‘EU’) legislation 3 Recital 23 in the preamble to Directive 2003/96 is worded as follows: ‘Existing international obligations and the maintaining of the competitive position of Community companies make it advisable to continue the exemptions of energy products supplied for air navigation and sea navigation, other than for private pleasure purposes, while it should be possible for Member States to limit these exemptions.’ 4 Article 11(3) of Directive 2004/18 provides: ‘Where mixed use takes place, taxation shall apply in proportion to each type of use, although where either the business or non-business use is insignificant, it may be treated as nil.’ 5 Article 14(1)(b) of the directive provides: ‘In addition to the general provisions set out in Directive 92/12/EEC on exempt uses of taxable products, and without prejudice to other Community provisions, Member States shall exempt the following from taxation under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse: ... (b) energy products supplied for use as fuel for the purpose of air navigation other than in private pleasure-flying. For the purposes of this Directive “private pleasure-flying” shall mean the use of an aircraft by its owner or the natural or legal person who enjoys its use either through hire or through any other means, for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities. Member States may limit the scope of this exemption to supplies of jet fuel (CN code 2710 19 21)’. 6 Under Article 15(1)(j) of Directive 2003/96: ‘Without prejudice to other Community provisions, Member States may apply under fiscal control total or partial exemptions or reductions in the level of taxation to: ... (j) motor fuels used in the field of the manufacture, development, testing and maintenance of aircraft and ships’. National law 7 The relevant provisions are those laid down in the Law on excise duty on mineral oils (Mineralölsteuergesetz) of 21 December 1992 (BGBl. 1992 I, p. 2185), in the version applicable in 2004, the year of the dispute; ‘the MinöStG’) and in the Regulation implementing the Law on excise duty on mineral oils (Mineralölsteuer-Durchführungsverordnung) of 15 September 1993 (BGBl. 1993 I, p. 1602), in the version applicable in 2004. 8 Article 4 of the MinöStG provides inter alia: ‘Exemptions, definitions (1) Subject to Paragraph 12, mineral oil may be used with exemption from tax ... 3. as fuel for the purpose of air navigation (a) by air carriers carrying out the commercial carriage of persons and goods or the supply for consideration of services, (b) in aircraft by authorities and the armed forces for official purposes and by the air rescue services for the purposes of air rescue. For the purposes of the present Statute, fuel for the purpose of air navigation is CN code 2710 0026 aviation fuel with a Research Octane Number not exceeding 100, light jet fuel with CN code 2710 0037 and jet fuel (medium-viscosity oil) with CN code 2710 0051, if used in aircraft; ...’ 9 Article 12 of the MinöStG was worded as follows: ‘Licence In relation to mineral oil in respect of which tax relief is granted under Paragraph 3(1) to (3), (5) and (7), Paragraph 4 or Paragraph 32(1) and (2), a licence must be obtained by persons who: 1. use or sell (distribute) it to others for fiscally advantageous purposes; or who 2. intend, as users or distributors, to transport it to (a) a territory outside the territorial scope of the Community legislation on excise duty (third countries); or (b) another Member State of the European Community for commercial purposes or by mail order. ...’ 10 Paragraph 50(1) of the Regulation implementing the Law on excise duty on mineral oils, in the version applicable in 2004, provides: ‘Refund of duty on fuel for the purpose of air navigation: 1. On application, tax paid on fuel for the purpose of air navigation shall be refunded, pursuant to Paragraph 4(1)(3) of the Law, to air carriers and bodies which have purchased such fuel, subject to tax, in the tax territory and which have used it for tax-free flights …’ The dispute in the main proceedings and the questions referred for a preliminary ruling 11 Systeme Helmholz operates a company which develops and sells electronic components and software. It is the owner of an aircraft which is used by its managing director both for private purposes and for flights to other companies and to trade fairs, as well as for maintenance and training flights. Systeme Helmholz does not have an operating licence for the purposes of the German law on air transport (Luftverkehrsgesetz), which is compulsory for air carriers in Germany. 12 Systeme Helmholz maintained monthly records concerning the use of the aircraft, in which it logged details of the date, the flight route, the duration of the flight and the purpose of the flight. On 16 December 2005, it applied for a refund – in the amount of EUR 1 700,12 – of the mineral oil duty that it had paid in respect of a total quantity of 2 358 litres of aviation fuel used for business flights made in Germany in 2004, including training flights and return trips to an aircraft maintenance facility. 13 By decision of 9 February 2009, the Hauptzollamt refused the refund application on the ground that Systeme Helmholz was not an air carrier. 14 Since, by decision of 12 April 2006, the Hauptzollamt declared the complaint made by Systeme Helmholz regarding that refusal to be unfounded, Systeme Helmholz brought an appeal before the Finanzgericht München (Finance Court, Munich). That court found that, in respect of the flights made for business purposes – with the exception of maintenance and training flights – Systeme Helmholz had the right to a refund of the mineral oil duty, on the basis of the first subparagraph of Article 14(1)(b) of Directive 2003/96. According to the Finanzgericht München, it cannot be inferred from that provision that the scope of the exemption is limited to air carriers. Where an aircraft is used for transport for company purposes, in order to develop business, a commercial purpose is pursued and, accordingly, the conditions for exemption as laid down in Community law are met. 15 However, in the case of training flights and flights for the purposes of maintenance and checking functional capacity, the Finanzgericht München found that Systeme Helmholz did not have a right to the tax relief provided for under Directive 2003/96. According to the Finanzgericht München, Article 15(1)(j) of that directive provides for the possibility of a refund only in respect of fuel consumed during maintenance. Furthermore, the maintenance and training flights do not constitute flights for commercial purposes because they are made for private, as well as commercial, reasons and have no direct link with the company’s business activities. Proportionate tax relief was also held to be out of the question, since it was not provided for in Article 14(1)(b) of Directive 2003/96. 16 Both Systeme Helmholz and the Hauptzollamt brought appeals on a point of law against that judgment before the Bundesfinanzhof (Federal Finance Court), the former on the ground that the decision refuses to grant it the exemption for maintenance and training flights, and the latter in so far as that decision exempted Systeme Helmholz from the duty on fuel used for flights which it had made for company purposes. 17 It is in those circumstances that the Bundesfinanzhof decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘1. Is the first sentence of Article 14(1)(b) of … Directive 2003/96 … to be interpreted as meaning that the exclusion of private pleasure-flying from the tax relief signifies that the exemption for energy products supplied for use as fuel for the purpose of air navigation is to be applied only to air carriers, or is the exemption to be applied to all fuel used for air navigation, provided that the aircraft is used for the purpose of earning income? 2. Is Article 15(1)(j) of … Directive 2003/96 … to be interpreted as meaning that it also pertains to fuel which an aircraft requires for the purposes of flights to and from an aircraft maintenance facility, or does the possibility of obtaining tax relief only apply to companies whose actual business purpose is the manufacture, development, testing and maintenance of aircraft? 3. Is Article 11(3) of … Directive 2003/96 … to be interpreted as meaning that, where an aircraft which is used for both private and commercial purposes is used for maintenance or training flights, pursuant to Article 14(1)(b) of … Directive 2003/96 … an exemption which is proportionate to the commercial use should be applied in respect of the fuel used for these flights? 4. If Question 3 is answered in the negative: may it be concluded from the non-applicability of Article 11(3) of Directive 2003/96 … for the purposes of Article 14(1)(b) of … Directive 2003/96 … that where there is mixed use of an aircraft for private and commercial purposes no exemptions are to be applied to maintenance or training flights? 5. If Question 3 is answered in the affirmative or if an analogous legal consequence arises from another provision of … Directive 2003/96 …: which criteria and which reference period should be taken as a basis for determining the respective proportion of use, within the meaning of Article 11(3) of … Directive 2003/96 …, for maintenance and training flights?’ Consideration of the questions referred Question 1 18 By Question 1, the referring court asks, in essence, whether the tax exemption provided for under Article 14(1)(b) of Directive 2003/96 applies to an undertaking, such as the applicant in the main proceedings, whose corporate purpose is unrelated to the air navigation sector and which, in order to develop its business, uses an aircraft belonging to it to take members of its staff to clients or to trade fairs. 19 In order to reply to that question, it should be noted that the provisions of Directive 2003/96 concerning exemptions must receive an autonomous interpretation, based on their wording and on the objectives pursued by that directive (see, to that effect, Case C‑389/02 Deutsche See-Bestattungs-Genossenschaft [2004] ECR I‑3537, paragraph 19; Case C‑391/05 Jan De Nul [2007] ECR I‑1793, paragraph 22; and Case C‑505/10 Sea Fighter [2011] ECR I‑0000, paragraph 14). 20 As regards, first, the terms of Article 14(1)(b) of Directive 2003/96, the first subparagraph of that provision provides for a tax exemption for ‘energy products supplied for use as fuel for the purpose of air navigation other than in private pleasure-flying’. The second subparagraph then defines ‘private pleasure-flying’ in negative terms, as ‘the use of an aircraft … for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities’. 21 It is apparent from the expression ‘other than for the carriage of passengers or goods or for the supply of services for consideration’ that the ‘air navigation’ covered by that exemption relates to the use of fuel where the aircraft is used directly for the supply of air services for consideration. In this context, therefore, the concept of ‘navigation’ implies that the supply of services for consideration is an inherent reason for the aircraft’s movements (see, to that effect, Sea Fighter, paragraph 18). 22 Moreover, that interpretation of Article 14(1)(b) of Directive 2003/96 is borne out by the travaux préparatoires for that directive. In the proposal for a directive which resulted in the adoption of Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils (OJ 1992 L 316, p. 12), the European Commission had planned, by introducing a tax exemption on air fuel, ‘to standardise the existing exemption for fuel supplied to international commercial flights, [extending it] to all commercial aviation’ (COM(90) 434 final). According to the Commission, ‘[that should have enabled] equal treatment [for] air travel between any two points within the Community, [emphasising] the seamless nature of the internal market. Fuel supplied for private aviation [had to] be subject to tax – as [was] generally the case [at the time]’. For the purposes of the tax exemption for aviation fuel, therefore, the Commission drew a distinction between commercial aviation and private aviation. 23 Secondly, it follows from the purpose of Directive 2003/96, under which the Member States are to tax energy products, that the directive does not seek to establish general exemptions (see, to that effect, Sea Fighter, paragraph 21). 24 Furthermore, it emerges from recital 23 in the preamble to Directive 2003/96 that Article 14(1)(b) is based on compliance with international obligations and the maintaining of the competitive position of Community companies. 25 As regards international obligations, that reference mainly concerns – as the Commission observes – the tax exemptions on energy products intended for civil aviation which are granted to airlines on the basis of the Convention on International Civil Aviation, signed in Chicago on 7 December 1944 (United Nations Treaty Series, vol. 15, p. 296), and of international bilateral air service agreements concluded between the European Union and/or its Member States and third countries, and between the Member States themselves. 26 As regards the maintaining of the competitive position of Community companies, the competitiveness to which recital 23 to Directive 2003/96 alludes mainly concerns – as the Cypriot Government and the Commission note – the competitiveness between Community airlines and those of third countries. The imposition of duty on the aviation fuel used by European airlines for intra-Community or international flights significantly reduces the competitiveness of those companies in relation to the air transport companies of third countries. 27 It follows from those considerations that the air navigation operations carried out by a company like Systeme Helmholz, consisting in the carriage of its personnel to clients or trade fairs in its own aircraft, cannot be assimilated to the use of an aircraft for commercial purposes, for the purposes of Article 14(1)(b) of Directive 2003/96, and, accordingly, do not fall within the scope of the tax exemption for aviation fuel under that provision, in so far as those air navigation operations are not directly used for the supply of an air service for consideration. 28 That conclusion cannot be affected by the fact that there is a certain divergence between the various language versions of the first subparagraph of Article 14(1)(b) of Directive 2003/96 as regards the air navigation operations which are excluded from the tax exemption provided for under that provision. Whereas a number of language versions of that provision use terms which appear to refer only to leisure activities, such as the French and English versions which refer to ‘aviation de tourisme privée’ or ‘private pleasure-flying’, the German version of that directive refers, at least in the body of Article 14(1)(b) of Directive 2003/96, to the concept of ‘private non-commercial aviation’ (‘private nichtgewerbliche Luftfahrt’) which appears to embrace all non-commercial activities. 29 However, those diverging concepts are expressly defined in the second subparagraph of Article 14(1)(b) of Directive 2003/96 as being ‘the use of an aircraft … for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities’. It is in the light of that definition that the scope of the tax exemption provided for under Article 14(1)(b) of Directive 2003/96 must be interpreted. 30 Lastly, the conclusion set out in paragraph 27 above cannot be undermined by the judgments in Deutsche-See-Bestattungs-Genossenschaft and Jan De Nul, referred to above. In those cases, the fuel for which a tax exemption had been sought fuelled ships which were directly used for the supply of services for consideration. Accordingly, in paragraph 28 of the judgment in Deutsche See-Bestattungs-Genossenschaft, the Court found, in respect of the operations of the Deutsche See which consisted in the organisation of burials on the high seas, for which it used three specially equipped ships, that ‘it [was] not disputed that [those operations] constituted a supply of services for consideration’. Furthermore, in paragraph 40 of the judgment in Jan De Nul, the Court stated that the manoeuvres carried out by a hopper dredger during its operations of pumping and discharge of materials, that is to say, journeys inherent in the carrying out of dredging activities, come within the scope of the term ‘navigation’, as used in the first subparagraph of Article 8(1)(c) of Directive 92/81. 31 That is the background against which it is necessary to view paragraph 23 of the judgment in Deutsche See-Bestattungs-Genossenschaft, in which the Court found that ‘all navigation activity for commercial purposes comes within the scope of the exemption’, and paragraph 25 of that judgment, in which the Court stated that Directive 92/81 does not draw any distinction as to the purpose of the navigation covered and that the distortion of competition which that directive aims to prevent may come about regardless of the type of commercial navigation in issue. Thus, the purpose of the journey is irrelevant for the purposes of applying the tax exemption if the navigation involves the supply of services for consideration (see, to that effect, Sea Fighter, paragraph 17). 32 In the case before the referring court, on the other hand, the work-related travel of Systeme Helmholz’s staff in the aircraft belonging to that company, in order to visit clients and trade fairs, with a view to developing the company’s business – the development and distribution of electronic components and software – is not directly used for the supply of air services for consideration by that company. 33 Accordingly, the answer to Question 1 is that Article 14(1)(b) of Directive 2003/96 must be interpreted as meaning that the tax exemption on fuel used for the purpose of air navigation, provided for under that provision, cannot apply to a company, such as the applicant in the main proceedings, which, in order to develop its business, uses its own aircraft to transport members of its staff to clients or to trade fairs, in so far as that travel is not directly used for the supply, by that company, of air services for consideration. Question 2 34 By Question 2, the referring court asks, in essence, whether the tax exemption provided for under Article 15(1)(j) of Directive 2003/96 applies exclusively to fuels used by companies engaged in the manufacture, development, testing and maintenance of aircraft or whether that exemption also covers the fuels which an aircraft needs for the purposes of flights to and from an aircraft maintenance facility. 35 Article 15(1)(j) of Directive 2003/96 provides that Member States may apply under fiscal control total or partial exemptions or reductions in the level of taxation to motor fuels used in the field of the manufacture, development, testing and maintenance of aircraft and ships. 36 As regards, first, the wording of Article 15(1)(j) of Directive 2003/96, it is apparent from the terms in which it is framed and, in particular, from the use of the words ‘bei der’ in the German language version of that provision, of ‘domaine’ in the French language version and of ‘field’ in the English language version, that the tax exemption provided for under Article 15(1)(j) of Directive 2003/96 is reserved for the use of fuel by companies engaged specifically in the activities referred to in that provision. 37 As regards, secondly, the overall structure of Directive 2003/96, although the compulsory exemption under Article 14(1)(b) of that directive is designed to provide a fiscal incentive for the use of fuel for air navigation for commercial purposes, Article 15(1)(j) of that directive provides, in contrast, for an optional exemption which is specifically designed to encourage a certain number of commercial activities in which aircraft manufacturers and maintenance facilities are engaged, involving inter alia fuel consumption on the ground and none of which fall within the scope of the normal activities of companies which are active in the air navigation sector. 38 It follows that Article 15(1)(j) of Directive 2003/96 does not cover fuel which has been consumed by an aircraft for the purpose of flights to and from an aircraft maintenance facility. 39 Accordingly, the answer to Question 2 is that Article 15(1)(j) of Directive 2003/96 must be interpreted as meaning that the fuel used for the purpose of flights to and from an aircraft maintenance facility does not fall within the scope of that provision. Questions 3, 4 and 5 40 By Questions 3, 4 and 5, the referring court asks essentially whether, in the case of the mixed use of an aircraft, for both private and commercial purposes, an exemption proportionate to the commercial use can be granted for the fuel used for the purpose of maintenance or training flights and, if so, which criteria and which reference period should be taken as a basis for determining the respective proportion of use. 41 In view of the answer given to Question 1, there is no need to answer those questions. Costs 42 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 (Fourth Chamber) hereby rules: 1. Article 14(1)(b) of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity must be interpreted as meaning that the tax exemption on air fuel used for the purpose of air navigation, provided for under that provision, cannot apply in the case of a company, such as the applicant in the main proceedings, which, in order to develop its business, uses its own aircraft to transport members of its staff to clients or to trade fairs, in so far as that travel is not directly used for the supply, by that company, of air services for consideration. 2. Article 15(1)(j) of Directive 2003/96 must be interpreted as meaning that the fuel used for the purpose of flights to and from an aircraft maintenance facility does not fall within the scope of that provision. [Signatures] * Language of the case: German.

ORDER OF THE COURT OF FIRST INSTANCE (Fifth Chamber) 6 December 2004 Case T-55/02 Peter Finch v Commission of the European Communities (Officials – Complaint – Implied rejection – Express rejection within the time-limit for appeals – Late notification of rejection – Admissibility – Pensions – Transfer of national pension rights – Calculation of years of service to be taken into account in the Community scheme – Salary taken as basis – Action manifestly unfounded in law) Full text in French II - 0000 Application: for annulment of the Commission’s decision concerning the crediting of years of pensionable service to be taken into account in the Community scheme in consequence of the transfer of all the pension rights acquired by the applicant prior to his entry into service with the Communities. Held: The action is dismissed as manifestly unfounded in law. The parties are to bear their own costs. Summary 1. Officials – Actions – Prior administrative complaint – Express rejection after being rejected by implied decision but before the period for lodging an appeal has expired – Late notification of rejection – Admissibility – Date for calculation of time-limit for bringing of action – Date of notification (Staff Regulations, Art. 91(3)) 2. Officials – Pensions – Pension rights acquired before entry into the service of the Communities – Transfer to the Community scheme – Crediting of years of pensionable service – Method of calculation – Taking into account of basic salary at the date of establishment as an official – Previous recruitment as a member of the temporary staff – No effect (Staff Regulations, Annex VIII, Art. 11(2); Commission’s general implementing provisions, Art. 4(2) and (3)) 3. Officials – Pensions – Pension rights acquired before entry into the service of the Communities – Transfer to the Community scheme – Method of calculating years of pensionable service credited (Staff Regulations, Annex VIII, Art. 11(2); Commission’s general implementing provisions, Art. 4(2) and (4)(b)) 1. Under the last sentence of the second indent of Article 91(3) of the Staff Regulations, ‘where a complaint is rejected by express decision after being rejected by implied decision but before the period for lodging an appeal has expired, the period for lodging the appeal shall start to run afresh’. A decision must be regarded as arising within the meaning of this provision at the date on which it is adopted by the competent authority. The competent authority, having adopted an express decision within the period for bringing an appeal, must expect a new period to begin to run in favour of the person concerned without any delay in notification being taken into account. As regards the date from which the time-limit for bringing an action must be calculated, the date of notification is the criterion in all cases where the delay in notification is not attributable to the person concerned, on the ground that only the notification enables him to have effective knowledge of the existence of the decision and the grounds by which the administration justifies it. (see paras 46, 48, 50) See: 5/76 Jänsch v Commission [1976] ECR 1027, paras 5, 9 and 10 2. The Staff Regulations, the Conditions of Employment of Other Servants and the general implementing provisions adopted by the Commission for the application of Article 11(1) and (2) of Annex VIII to the Staff Regulations contain no provisions specifically governing, as regards the transfer of pension rights, the situation of a member of the temporary staff who has subsequently become an official. In the absence of such specific provisions, and if the person concerned is an official at the time when he makes a request to that effect, the transfer of pension rights is governed by the provisions of Article 11(2) of Annex VIII to the Staff Regulations and by Article 4(2) and (3) of the general implementing provisions, pursuant to which the number of years of pensionable service to be credited is to be calculated by reference to the date of the official’s establishment and his grade on establishment. (see paras 73-74) See: 8/85 Bevere v Commission [1986] ECR 1187, para. 11; T‑106/01 Youssouroum v Council [2002] ECR-SC I‑A‑93 and II‑435, para. 41; T‑95/02 Hohenbichler v Commission [2003] ECR-SC I‑A‑301 and II‑1431, paras 50 and 51 3. When pension rights are transferred, where the years of pensionable service to be credited are calculated in accordance with Article 4(4)(b) of the general provisions adopted by the Commission for the implementation of Article 11(2) of Annex VIII to the Staff Regulations on the transfer to the Community scheme of pension rights acquired before entering the service of the Communities, the total amount of the national pension rights involved in the transfer is converted on the basis of the current rate applicable on the date of the transfer. In that case, the salary and the actuarial value to be taken into account for calculating the years of pensionable service are, respectively, the salary applicable on the date of the transfer for the grade at which the official was established, and the actuarial value corresponding to the official’s age on that same date. Because the rate has been updated to the date of the transfer, there is no need to deduct interest as provided for in Article 4(2) of the general implementing provisions for the period between the date of establishment and that of the transfer, which is intended to compensate the Community institution for the delay in the actual transfer to the Community of the amount of the national pension rights to which the official is entitled on the date when he is established. (see paras 82-83) See: T‑303/00, T‑304/00 and T‑322/00 Caballero Montoya and Others v Commission [2003] ECR-SC I‑A‑29 and II‑189, para. 76; Hohenbichler v Commission, cited above, paras 59 and 60

Santosh Hegde, J. The appellants in these two appeals were accused Nos. 1, 2 and 5 in the Court of VI Additional Sessions Judge, at Sasaram in Sessions Trial No. 356 of 1991. Originally, along with the appellants, two other persons were charged for an offence under Sections 396 and 436 IPC as also under Section 27 of the Arms Act, and all the said accused persons were sentenced to life imprisonment under Section 396 IPC, for 10 years under Section 436 read with 34 IPC and for 5 years under Section 27 of the Arms Act, and the sentences were directed to run companycurrently. During the companyrse of the trial, learned Sessions Judge felt that there was sufficient material to try 3 other persons, namely, Brij Lal, Parash Singh and Hari Shankar Singh, accordingly invoking the provisions of Section 319 of the Cr.P.C. They were also directed to face trial under the abovesaid charges. The prosecution case in brief is that on the intervening night of 27th and 28th May, 1990, the appellants along with other named accused persons and some others barged into the house of Kapil Muni Singh with an intention of causing dacoity and in the said process, caused the death of Kapil Muni Singh and his son Sheo Mandir Singh by assaulting them and ultimately setting fire to the Dalan in which the deceased were sleeping. On receiving a message of the crime, the Investigating Officer, Narendra Paswan, PW-7, who was then the Sub-Inspector of Police in the Police Station Kargahar, came to the spot and recorded the companyplaint made by Urmila Devi, wife of deceased Sheo Mandir Singh at about 3.30 or 4 in the morning of 28.5.1990 which is marked as Ex.1 and thereafter proceeded to hold the spot Mahazar. In Ex.1, the names of A-1 to A-5 were specifically mentioned while others names were number mentioned. After investigation, as stated above, a chargesheet as against A-1 to A-5 was filed for the offence already referred to hereinabove and thereafter the companyrt on its own invoking the power under Section 319 included A-6 to A-8 as the persons against whom there was material to make them face trial. The prosecution during the companyrse of trial, has relied upon the evidence of PW-6, wife of the deceased Sheo Mandir Singh as the sole eye-witness to the incident while it relied upon PW-1, Devender Singh, the brother of the deceased Kapil Muni Singh and Ram Charitra Paswan, PW-5 among others as companyroborating witnesses. After companysidering the evidence on record, the trial companyrt placing reliance on the evidence of PW-6 companyvicted A-1 to A-5 of the offences stated above and acquitted A-6 to A-8. In this process, though the trial companyrt relied upon the evidence of PW-1, Deoraj Singh and Ram Charitra Paswan in regard to the involvement of A-1 to A-5 number accept the same evidence in regard to A-6 to A-8. It also relied on the fact that some of the accused persons were absconding and accordingly based its companyviction. The appeal filed against the said judgment by the companyvicted accused persons came to be dismissed by the High Court of Judicature at Patna in Criminal Appeal NO. 335/94 companyfirming the companyviction and sentence imposed on those accused. From amongst the 5 companyvicted accused persons, only 3 of them have chosen to prefer appeal they are A-1 Bal Keshwar Lal, A-4 Jiut Lal who are appellants in Crl.A. No. 182/2000 and A-5 Sumesh Lal who is appellant in Crl.A. No. 181/2000 . We have heard Mr. Abhay Prakash Sahay, learned companynsel for appellant in Crl.A. No. 181/2000 and Ms. Minakshi Vij, learned companynsel appearing as an amicus curiae in Crl.A. No. 182/2000. It was companytended on behalf of the appellants that the companyrts below erred in placing reliance on the evidence led on behalf of the prosecution inasmuch as the incident in question had occurred in the dead of night without there being any light to identify the assailants and the appellants as well as the other companyvicted accused persons being the neighbours of Kapil Muni Singh, the deceased, and who were number on good terms, were falsely implicated in the murder because of some ill-will between them. It was also stated that on the very same day, there was a dacoity in the village which took place number only in the house of the deceased but also in the house of the companyvicted accused persons and the prosecution witnesses though have number witnessed the incident in question have falsely implicated almost all members of the family though some of the accused persons were number even residing in the same village. It is also companytended that there is material to show that PW-6 companyld number have identified the accused persons and that she admittedly being a person who is mentally disabled, companyld number have identified these assailants either at the time of the incident or at the time of the trial and on her own companyld number have given the evidence without she being tutored to say so. It is also companytended that the first information report reached the companyrt only on 29.5.1990 i.e. nearly a day and a half after the incident and that there has been numberexplanation whatsoever in regard to this delay. It was further companytended that the superiors of PW-7 had initiated departmental proceedings against him on the ground that he had number companyducted proper investigation in this case, therefore, the companyrts below companyld number have placed any reliance on the prosecution case to base a companyviction. We have perused the judgments of the companyrts below and heard the learned companynsel. Assuming for arguments sake that the evidence of all other prosecution witnesses who support the prosecution case, is doubtful in view of the companytradictions found in their evidence, in our opinion, if the evidence of PW-6 is acceptable as companypetent and truthful, there is numberneed to look for any other evidence to prove the guilt of the companyvicted accused persons. The challenge to PW-6s evidence was companysidered by the learned Sessions Judge who in the companyrse of his evidence, stated that she has identified these 5 companyvicted accused persons clearly both in the companyplaint as well as in her evidence before the companyrt. She had stated that the said 5 accused persons with fire-arms, namely, Katta and pistol along with some other unknown criminals, about 10 in numbers, raided her house and set the Dalan ablaze in which her father-in-law and husband were sleeping and they were charred to death. She stated in her examination that she companyld identify the accused persons in view of the flames of fire that were glowing pursuant to burning of Dalan. She had also stated that when her fatherin-law asked her for some water before he died, she was prevented from doing so by the accused persons by sarcastically stating that they would rather urinate in his mouth. She had also stated that there was earlier misunderstanding between the companyvicted accused persons and her family due to the former entertaining criminals in their house. Learned Judge has numbered in the companyrse of his judgment that though searching crossexamination was made of this witness, numberhing was pointed out to falsify her evidence. He has also discarded the defence charge that the witness was in any way shaky during the companyrse of her examination. Certain trivial discrepancies in her evidence like the existence of enmity between her family and the family of the companyvicted accused was rightly ignored by the trial companyrt by holding that they are number material companytradictions. He numbered the fact that PW-6 had admitted in her evidence that one or two months after the incident in question that she did lose her mental balance but she was treated at the hospital at Ranchi. In this background the learned Sessions Judge chose to place reliance on her evidence. The High Court has companycurred with this companyclusion of the learned Sessions Judge. Before us the learned companynsel appearing for the appellants also challenged her evidence on the ground that she was a person of unstable mind, admittedly having suffered certain mental illness, hence, her evidence companyld number be accepted. We are unable to accept this argument. It is possible that having seen the gruesome incident in which she lost her husband and father-in-law, she companyld have suffered a shock which might have given rise to certain psychological problems and this companyld have happened only after the incident in question but after that it has companye in evidence that after she was treated in the hospital, she was relieved of any such problem. Having perused the evidence both in-chief as well as in cross, we have numberhesitation in accepting the finding of the learned Sessions Judge that she was companypetent to give evidence in the companyrt and that her evidence is trustworthy enough to be relied upon and inspite of the lengthy cross-examination, numberhing material to discard her evidence has been made out. The next ground of attack on the evidence of PW-6 is that she companyld number have identified the accused persons in the dead of night but then it is seen from her evidence that she had known these accused persons, they being her neighbours, and she had seen their faces in the light of burning flames of Dalan as also she had heard them when she was prevented from providing water to her father-in-law. Therefore, there was every opportunity for PW-6 to identify at least those accused whom she had named in her companyplaint. The inconsistencies pointed out in her examination are, in our opinion, and so pointed out by the learned Sessions Judge are trivial and are number so grave or substantial as to create any doubt in our minds to discard her evidence. Having companye to the companyclusion that the evidence of PW-6 is reliable and trustworthy and having taken numbere of the fact that the learned Sessions Judge who had an opportunity of seeing the witness in the box and who chose to accept her evidence which was companyfirmed by the High Court, we do number find any reason to reject the same.

COURT OF APPEAL FOR ONTARIO CITATION: R. v. Reyes, 2019 ONCA 231 DATE: 20190322 DOCKET: M50037 (C64769) Rouleau, Miller and Fairburn JJ.A. BETWEEN Her Majesty the Queen Respondent and Althea Reyes Applicant/Appellant J.W. Irving, for the appellant Andrew Hotke, for the respondent Heard and released orally: March 19, 2019 REASONS FOR DECISION [1] This is an application to reopen the applicant’s appeal. The appeal was dismissed in accordance with this court’s previous order that unless the appeal was perfected by August 31, 2018 her appeal would be dismissed. [2] Despite the clear notice as to what would result if that date was missed, the applicant missed that date. She now applies to reopen the appeal. We see no basis upon which to do so. [3] The applicant did not diligently pursue her appeal. Although she endeavored to file a few documents (factum and abbreviated appeal book) on August 31, 2018, the materials were inadequate. The appeal book did not contain the necessary materials and there was no transcript. These deficiencies were not remedied for some time. Indeed, it appears that the materials were not filed until January 15, 2019, long after the appeal had been dismissed by the Registrar. [4] Moreover, we see no merit to the underlying appeal, an attempt to review the decision refusing to quash a bench warrant in the Ontario Court of Justice. The factual record belies the suggestion that the trial judge erred in issuing that warrant, a clearly discretionary decision. [5] For these reasons, it is not in the interests of justice to reopen the appeal. The application is dismissed. “ Paul Rouleau J.A.” “B.W. Miller J.A. ” “Fairburn J.A.

Kuldip Singh, R.M. Sahai and R.C. Patnaik, JJ. The District Magistrate Bulandshahar, Uttar Pradesh, by an order dated July 23, 1991, directed that Jagdish s o Kanchan Singh the detenu resident of Village Dhamera Kirat, District Bulandshahar be detained under the National Security Act, 1980 the Act . The order was served upon the detenu while in custody in companynection with two criminal cases registered against him. The grounds of detention served upon the detenu also stated as under You are hereby informed in accordance with Section 8 of the above Act that you have the right to file a representation to the State Government against the order under which you have been detained. If you want to send any such representation then that should be submitted through the Superintendent, of Prisons, Bulandshahar while addressing it to the Home Secretary to the State GovernmentYou are also informed that if you want to submit any Representation then you may do so before the Central Government against such order under which you have been detained. And if you submit to any such representation then you may submit the representation through the Superintendent of Prisons Bulandshahar while addressing to the Home Ministry Inter Security Department Government of India, New Delhi. The detenu submitted the representation against his detention through the jail authorities on August 3, 1991. The original records produced by the State Government show that the representation was addressed To The Home Secretary without indicating whether to the State Government or the Central Government. The representation was rejected by the State Government on August 9, 1991. This petition under Article 32 of the Constitution of India has been filed through the brother of the detenu challenging the order of detention. It is averred in the petition that the detenu submitted nine companyies of the representation to the jail authorities. The District Magistrate, Bulandshahar, in his companynter, states as under That para 4 of the Writ Petition is admitted to the extent that the companyies of the representation were received through the office of the Superintendent District Jail Bulandshahar. Out of these one companyy was retained in my office six companyies were forwarded to the Government of U.P. and one companyy was companymunicated to the Advisory Board under the National Security Act. The deponent has specifically inquired from the office of the Superintendent District Jail Bulandshahar and upon information received from the said office, it is respectfully submitted that the detenu has number made any representation to the Central Government. Mr. R.K. Jain, Learned Senior Advocate assisted by Mr. Udai Lalit has companytended that even though, numberrepresentation was sent by the detenu to the Central Government, the State Government was under an obligation to send a companyy of the representation received by it to the Central Government. The argument is based on the interpretation of Section 3 5 read with Section 14 of the Act. Since the Central Government has the power, under Section 14 of the Act, to revoke the detention at any time, it is companytended that the State Government is bound to send all relevant material received by it, from time to time, to the Central Government. It is number necessary for us to go into the question raised by the learned Counsel. We are inclined to allow this petition on the facts of this case. The District Magistrate along with the grounds of detention specifically informed the detenu that he has a right to make representation to the State Government and also to the Central Government. The representation sent by the detenu was neither addressed to the State Government number to the Central Government. He only mentioned Home Secretary as the addressee without further indicating whether he meant Home Secretary to the State Government or the Central Government. It is number disputed that the detenu gave nine companyies of the representation to the Superintendent Jail for onward submission to the authorities. We are of the view that the Superintendent Jail, in the circumstances of this case, was under an obligation to send one company of the representation to the Central Government. The Superintendent Jail sent the representation only to the State Government and number to the Central Government. When the detenu gave sufficient number of companyies of his representation and left it to the Jail authorities to forward the same to the authorities as specified in the grounds of detention, the Superintendent Jail was legally bound to send one companyy to the Central Government.

Judgment of the Court (First Chamber) of 23 February 1978. - An Bord Bainne Co-Operative v Minister for Agriculture. - Reference for a preliminary ruling: High Court - Ireland. - Aid for private storage. - Case 92/77. European Court reports 1978 Page 00497 Greek special edition Page 00209 Portuguese special edition Page 00211 Summary Parties Subject of the case Grounds Decision on costs Operative part Keywords 1 . AGRICULTURE - BUTTER - BUYING-IN PRICE EXPRESSED IN IRISH POUNDS - INCREASE - BROUGHT ABOUT BY REGULATION NO 2517/74 2 . AGRICULTURE - BUTTER - PRIVATE STORAGE - AID - PAYMENT - RIGHT THERETO - ACQUISITION - CONDITIONS ( REGULATION NO 985/68 OF THE COUNCIL , ART . 9 ; REGULATION NO 685/69 OF THE COMMISSION ) 3 . AGRICULTURE - BUTTER - PRIVATE STORAGE - AID - REGULATION NO 2517/74 - APPLICATION - AMBIT - DATE 4 . MEASURE ADOPTED BY AN INSTITUTION - LEGISLATIVE NATURE - REASONS ON WHICH BASED 5 . AGRICULTURE - BUTTER - PRIVATE STORAGE - AID - REGULATION NO 2517/74 - VALIDITY Summary 1 . REGULATION NO 2498/74 OF THE COUNCIL OF 2 OCTOBER 1974 BROUGHT ABOUT AN INCREASE IN THE BUYING-IN PRICE FOR BUTTER EXPRESSED IN IRISH POUNDS , BY VIRTUE OF THE PROVISIONS OF ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION OF 14 APRIL 1969 , AS SUPPLEMENTED BY REGULATION NO 2517/74 OF THE COMMISSION OF 3 OCTOBER 1974 . 2 . THE MERE FACT OF ENTERING INTO PRIVATE STORAGE CONTRACTS AS REFERRED TO IN ARTICLE 9 OF REGULATION NO 985/68 OF THE COUNCIL , AND THE PLACING OF GOODS IN PRIVATE STORAGE DID NOT IN THEMSELVES SUFFICE TO CONFER ANY RIGHT TO PAYMENT OF A SPECIFIC AMOUNT OF AID ; THE PERSON CONCERNED ACQUIRES SUCH A RIGHT ONLY IF THE QUANTITIES OF BUTTER COVERED BY THE STORAGE CONTRACTS HAVE REMAINED IN STORAGE FOR A SPECIFIED MINIMUM PERIOD , IN ACCORDANCE WITH THE DETAILED RULES LAID DOWN BY REGULATION NO 685/69 , AND IF THEY HAVE BEEN TAKEN OUT OF STORE IN ACCORDANCE WITH ANY CONDITIONS LAID DOWN IN THOSE CONTRACTS . 3 . REGULATION NO 2517/74 OF THE COMMISSION APPLIES TO STORAGE CONTRACTS ENTERED INTO BEFORE THE ENTRY INTO FORCE OF REGULATION NO 2498/74 OF THE COUNCIL , IN RESPECT OF QUANTITIES OF BUTTER NOT YET REMOVED IN THE PROPER MANNER FROM STORAGE ON THAT DATE , NAMELY 7 OCTOBER 1974 . 4 . THE REASONS ON WHICH A PIECE OF LEGISLATION IS BASED MAY APPEAR NOT ONLY FROM ITS OWN WORDING , BUT ALSO FROM THE WHOLE BODY OF THE LEGAL RULES GOVERNING THE FIELD UNDER CONSIDERATION . 5 . REGULATION NO 2517/74 IS VALID . Parties IN CASE 92/77 REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE HIGH COURT OF IRELAND FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN AN BORD BAINNE CO-OPERATIVE LIMITED ( THE IRISH DAIRY BOARD ) AND THE MINISTER FOR AGRICULTURE Subject of the case ON THE INTERPRETATION AND THE VALIDITY OF CERTAIN PROVISIONS OF REGULATIONS NO 685/69 AND NO 2517/74 OF THE COMMISSION CONCERNING PRIVATE STORAGE AID FOR BUTTER AND CREAM , Grounds 1BY AN ORDER DATED 13 JULY 1977 , RECEIVED AT THE COURT ON 25 JULY 1977 , THE HIGH COURT OF IRELAND HAS REFERRED TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY QUESTIONS CONCERNING THE INTERPRETATION OF REGULATION NO 685/69 OF THE COMMISSION OF 14 APRIL 1969 ON DETAILED RULES OF APPLICATION FOR INTERVENTION ON THE MARKET IN BUTTER AND CREAM ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 194 ), AND ON THE VALIDITY OF REGULATION NO 2514/74 OF THE COMMISSION OF 3 OCTOBER 1974 , WHICH ENTERED INTO FORCE ON 1 OCTOBER 1974 , AMENDING REGULATION NO 685/69 AS REGARDS THE ADJUSTMENT OF PRIVATE STORAGE AID FOR BUTTER TO TAKE ACCOUNT OF CHANGES IN THE BUYING-IN PRICE ( OFFICIAL JOURNAL 1974 , L 269 , P . 24 ). 2THESE QUESTIONS HAVE BEEN REFERRED IN THE CONTEXT OF PROCEEDINGS BROUGHT BY AN IRISH CO-OPERATIVE SOCIETY WITH LIMITED LIABILITY , CARRYING ON THE BUSINESS OF MARKETING MILK AND MILK PRODUCTS , AGAINST THE MINISTER FOR AGRICULTURE AND FISHERIES , WHO IS THE INTERVENTION AGENCY IN IRELAND FOR THE PURPOSES OF THE COMMON AGRICULTURAL POLICY . 3THE DISPUTE BETWEEN THE PARTIES CONCERNS THE AMOUNT OF AID WHICH SHOULD HAVE BEEN PAID FOR CERTAIN QUANTITIES OF BUTTER AND CREAM WHICH THE PLAINTIFF CO-OPERATIVE SOCIETY HAD STORED PRIVATELY , UNDER ARTICLE 6 OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 176 ), AND WHICH HAD NOT YET BEEN REMOVED FROM STORAGE ON 7 OCTOBER 1974 . 4THE SAID CO-OPERATIVE SOCIETY CLAIMS THAT ALTHOUGH THE AMOUNT OF THE AID HAS BEEN REDUCED OWING TO THE NEW BUYING-IN PRICE FOR BUTTER EXPRESSED IN UNITS OF ACCOUNT LAID DOWN BY REGULATION NO 2469/74 OF THE COUNCIL OF 2 OCTOBER 1974 ( OFFICIAL JOURNAL 1974 , L 268 , P . 1 ) AS FROM 7 OCTOBER 1974 , THAT DOES NOT MEAN THAT THE SAID AMOUNT HAS BEEN AFFECTED BY THE ALTERATION OF THE REPRESENTATIVE EXCHANGE RATE FOR THE IRISH ' ' GREEN ' ' POUND ENACTED BY REGULATION NO 2498/74 OF THE COUNCIL OF 2 OCTOBER 1974 ( OFFICIAL JOURNAL 1974 , L 268 , P . 6 ) ALSO AS FROM 7 OCTOBER 1974 . 5ON THE OTHER HAND , THE INTERVENTION AGENCY CONTENDS THAT THE BUYING-IN PRICE FOR BUTTER IN IRELAND , AS APPLIED BEFORE 7 OCTOBER 1974 , HAS UNDERGONE A DOUBLE INCREASE , AS ITS LEVEL HAS BEEN RAISED BOTH IN UNITS OF ACCOUNT AND IN IRISH NATIONAL CURRENCY , THROUGH THE COMBINED EFFECT OF THE TWO COUNCIL REGULATIONS AFOREMENTIONED . 6IT CONTENDS THAT , OWING TO THAT INCREASE AND IN ACCORDANCE WITH THE SECOND PARAGRAPH OF ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION , AS SUPPLEMENTED BY REGULATION NO 2517/74 OF THE COMMISSION , NO AID IS DUE TO THE PLAINTIFF CO-OPERATIVE SOCIETY IN RESPECT OF THE QUANTITIES OF BUTTER AND CREAM STILL IN STORAGE ON THE AFOREMENTIONED DATE . 7IN THE FIRST TWO QUESTIONS , THE HIGH COURT ASKS WHETHER REGULATION NO 2498/74 OF THE COUNCIL , WHICH ALTERED THE EXCHANGE RATE BETWEEN THE IRISH POUND AND THE UNIT OF ACCOUNT , HAD THE EFFECT OF INCREASING THE ' ' BUYING-IN PRICE FOR BUTTER ' ' WITHIN THE MEANING OF THAT EXPRESSION AS USED IN ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION , AS AMENDED BY REGULATIONS NO 1064/69 AND NO 603/70 OF THE COMMISSION , AND WHETHER SUCH INCREASE TOOK PLACE INDEPENDENTLY OF OR BY VIRTUE OF THE PROVISIONS OF REGULATION NO 2517/74 OF THE COMMISSION . 8REGULATION NO 2498/74 ALTERING THE REPRESENTATIVE CONVERSION RATE FOR THE IRISH GREEN POUND WHICH HAD BEEN FIXED BY REGULATION NO 222/73 OF THE COUNCIL OF 31 JANUARY 1973 ( OFFICIAL JOURNAL 1973 , L 27 , P . 4 ), APPLIES , ACCORDING TO ARTICLE 1 THEREOF , TO ' ' TRANSACTIONS TO BE CARRIED OUT IN PURSUANCE OF INTRUMENTS RELATING TO THE COMMON AGRICULTURAL POLICY ' ' . 9THE ANNEX TO REGULATION NO 1134/68 OF THE COUNCIL OF 30 JULY 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 396 ) TO WHICH THE FOURTH RECITAL IN THE PREAMBLE TO REGULATION NO 2498/74 REFERS , DOES NOT MENTION THE BUYING-IN PRICE APPLIED BY THE INTERVENTION AGENCIES AMONG THE AMOUNTS TO BE ADJUSTED IN THE CASE OF AN ALTERATION OF THE PARITY OF THE NATIONAL CURRENCY OF A MEMBER STATE IN RELATION TO THE UNIT OF ACCOUNT . 10THEREFORE REGULATION NO 2498/74 , CONSIDERED SOLELY IN RELATION TO THE REGULATIONS WITHIN THE FRAMEWORK OF WHICH IT WAS ADOPTED , CANNOT HAVE HAD THE EFFECT OF BRINGING ABOUT AN INCREASE IN THE BUYING-IN PRICE FOR BUTTER EXPRESSED IN IRISH NATIONAL CURRENCY . 11ON THE OTHER HAND , A CHANGE IN THE BUYING-IN PRICE DUE TO A CHANGE IN THE PARITY BETWEEN THE UNIT OF ACCOUNT AND A NATIONAL CURRENCY IS EXPRESSLY PROVIDED FOR BY ARTICLE 29 OF REGULATION NO 685/69 , AS SUPPLEMENTED BY REGULATION NO 2517/74 OF THE COMMISSION . 12THE AFORESAID ARTICLE 20 LAYS DOWN THAT THE AMOUNT OF AID FOR THE PRIVATE STORAGE OF BUTTER SHALL BE INCREASED OR DECREASED BY REASON OF ANY CORRESPONDING CHANGE IN THE BUYING-IN PRICE EXPRESSED IN UNITS OF ACCOUNT , AND GOES ON TO PROVIDE IN THE LAST SUBPARAGRAPH THAT ' ' THE PROVISIONS OF THE PRECEDING SUBPARAGRAPHS SHALL ALSO APPLY IN THE EVENT OF A CHANGE IN THE BUYING-IN PRICE FOR BUTTER , EXPRESSED IN NATIONAL CURRENCY , APPLIED BY THE INTERVENTION AGENCY ' ' . 13REGULATION NO 2517/74 , PROVIDING FOR THE ADDITION OF THIS LAST SUBPARAGRAPH TO ARTICLE 29 , ENTERED INTO FORCE ON 1 OCTOBER 1974 AND WAS THEREFORE APPLICABLE WHEN REGULATION NO 2498/74 , ADOPTED ON 7 OCTOBER 1974 , ENTERED INTO FORCE . 14THEREFORE THE APPROPRIATE ANSWER TO THE FIRST TWO QUESTIONS IS THAT REGULATION NO 2498/74 OF THE COUNCIL OF 2 OCTOBER 1974 BROUGHT ABOUT AN INCREASE IN THE BUYING-IN PRICE FOR BUTTER EXPRESSED IN IRISH POUNDS , BY VIRTUE OF THE PROVISIONS OF ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION OF 14 APRIL 1969 , AS SUPPLEMENTED BY REGULATION NO 2517/74 OF THE COMMISSION OF 3 OCTOBER 1974 . 15IN ITS THIRD QUESTION , THE HIGH COURT ASKS WHETHER , IF REGULATION NO 2498/74 OF THE COUNCIL IS TO BE INTERPRETED AS HAVING BROUGHT ABOUT AN INCREASE IN THE INTERVENTION PRICE FOR BUTTER , BY THE EFFECT OF THE PROVISIONS OF REGULATION NO 2517/74 OF THE COMMISSION , THE LATTER REGULATION IS TO BE REGARDED AS VALID AND BINDING IN RELATION TO PRIVATE STORAGE CONTRACTS ENTERED INTO BEFORE ITS ENTRY INTO FORCE . 16THE SYSTEM OF AID FOR THE PRIVATE STORAGE OF BUTTER PROVIDED FOR BY ARTICLE 6 ( 2 ) OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 IS ONE OF THE INTERVENTION MEASURES INTRODUCED BY THAT REGULATION IN ORDER TO ATTAIN THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY WHICH ARE REFERRED TO IN ARTICLE 39 OF THE TREATY . 17THE SIXTH AND THE LAST RECITALS IN THE PREAMBLE TO REGULATION NO 985/68 OF THE COUNCIL OF 15 JULY 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 256 ) STATE THAT SUCH MEASURES ' ' MUST TAKE ACCOUNT OF THE DEVELOPMENT OF THE MARKET SITUATION ' ' AND , IN THE CASE OF PRIVATE STORAGE IN PARTICULAR , ' ' MUST CONTRIBUTE TO THE ATTAINMENT OF A BALANCED MARKET ' ' . 18TO THAT END , ARTICLE 10 OF THE REGULATION PROVIDES THAT THE AMOUNT OF PRIVATE STORAGE AID MAY BE ALTERED IF , AT THE TIME OF REMOVAL FROM STORE , THE STATE OF THE MARKET HAS DEVELOPED UNFAVOURABLY UNDER CONDITIONS WHICH COULD NOT BE FORESEEN . 19LIKE THAT PROVISION , THE FIRST VERSION OF ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION PROVIDED THAT , ' ' SHOULD THE BUYING-IN PRICE FOR BUTTER DECREASE . . ., THE AID SPECIFIED IN ARTICLE 24 SHALL BE INCREASED BY AN AMOUNT EQUAL TO THAT DECREASE , IN RESPECT OF QUANTITIES OF BUTTER COVERED BY A CONTRACT AND TAKEN INTO STORE BEFORE THE DATE ON WHICH THE CHANGE IN THE BUYING-IN PRICE BECAME EFFECTIVE ' ' . 20REGULATIONS NOS 880/69 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 218 ), 1064/69 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 235 ) AND 603/70 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 169 ) OF THE COMMISSION SUPPLEMENTED THE SYSTEM THUS INTRODUCED BY PROVIDING THAT THE AMOUNT OF PRIVATE STORAGE AID MAY ALSO BE ALTERED IF THE BUYING-IN PRICE FOR BUTTER APPLIED BY THE INTERVENTION AGENCIES SHOULD INCREASE . 21THOSE RULES ARE THE RESULT OF THE COMMISSION ' S CONCERN TO ENSURE THAT THE IMPLEMENTATION OF THE ARRANGEMENTS FOR AID FOR PRIVATE STORAGE OF BUTTER SHOULD TAKE ACCOUNT OF THE DEVELOPMENT OF THE MARKET , SO AS TO ENSURE THAT , AS INTENDED BY THE BASIC REGULATION NO 804/68 , THE AMOUNT OF AID GRANTED SHOULD CORRESPOND TO THE LEVEL OF ACTUAL PRICES AT THE END OF THE PERIOD OF STORAGE . 22SUCH AN OBJECTIVE WOULD NOT BE ATTAINED IF A CHANGE IN THE BUYING-IN PRICE WERE TO RESULT IN A LOSS OR , CONVERSELY , IN AN UNJUSTIFIED PROFIT FOR A TRADER REMOVING GOODS FROM STORAGE BY COMPARISON IN PARTICULAR WITH TRADERS WHO HAD SOLD INTO INTERVENTION IN THE SAME MARKETING YEAR . 23TREATING A CHANGE IN THE BUYING-IN PRICE EXPRESSED IN NATIONAL CURRENCY IN THE SAME WAY AS A CHANGE IN THAT PRICE EXPRESSED IN UNITS OF ACCOUNT , REGULATION NO 2517/74 MERELY SUPPLEMENTS THOSE RULES ON THE ADJUSTMENT OF PRIVATE STORAGE AID . 24SINCE EVERY DECREASE OR INCREASE IN THE BUYING-IN PRICE , WHATEVER ITS ORIGIN , IS REFLECTED IN THE MARKET PRICE , PARTICULARLY IN THE CASE OF A MARKET WITH A SURPLUS SUCH AS THE MARKET IN MILK PRODUCTS , SUCH TREATMENT IN FACT ALLOWS THE AMOUNT OF PRIVATE STORAGE AID TO BE ADJUSTED TO THE REAL AND JUSTIFIED NEEDS OF STORERS . 25THE PLAINTIFF IN THE MAIN ACTION CLAIMS THAT REGULATION NO 2517/74 INTERFERES WITH ITS RIGHTS UNDER PRIVATE STORAGE CONTRACTS ENTERED INTO BEFORE ITS ENTRY INTO FORCE WITH THE COMPETENT NATIONAL INTERVENTION AGENCY , AND IS THEREFORE CONTRARY TO THE PRINCIPLE OF RESPECT FOR VESTED RIGHTS . 26THE MERE FACT OF ENTERING INTO PRIVATE STORAGE CONTRACTS AS REFERRED TO IN ARTICLE 9 OF REGULATION NO 985/68 OF THE COUNCIL , AND THE PLACING OF GOODS IN PRIVATE STORAGE CANNOT IN THEMSELVES SUFFICE TO CONFER ANY RIGHT TO PAYMENT OF A SPECIFIC AMOUNT OF AID . 27THE PERSON CONCERNED ACQUIRES SUCH A RIGHT ONLY IF THE QUANTITIES OF BUTTER COVERED BY THE STORAGE CONTRACTS HAVE REMAINED IN STORAGE FOR A SPECIFIED MINIMUM PERIOD , IN ACCORDANCE WITH THE DETAILED RULES LAID DOWN BY REGULATION NO 685/69 , AND IF THEY HAVE BEEN TAKEN OUT OF STORE IN ACCORDANCE WITH ANY CONDITIONS LAID DOWN IN THOSE CONTRACTS , WHICH DID NOT OCCUR IN THIS INSTANCE . 28MOREOVER , ON THE GROUNDS OF PUBLIC INTEREST MENTIONED ABOVE , THE GRANT OF AID FOR PRIVATE STORAGE OF BUTTER IS SUBJECT AT ALL TIMES TO THE PROVISIONS OF THE COMMUNITY RULES RELATING THERETO . 29HENCE , THE COMPLAINT OF INFRINGEMENT OF VESTED RIGHTS AND ALSO THAT OF FAILURE TO HAVE REGARD TO LEGITIMATE EXPECTATION CANNOT BE UPHELD IN THE PRESENT CASE , AND IT IS TO BE CONCLUDED THAT REGULATION NO 2517/74 OF THE COMMISSION APPLIES TO STORAGE CONTRACTS ENTERED INTO BEFORE THE ENTRY INTO FORCE OF REGULATION NO 2498/74 OF THE COUNCIL , IN RESPECT OF QUANTITIES OF BUTTER NOT YET REMOVED IN THE PROPER MANNER FROM STORAGE ON THAT DATE , NAMELY 7 OCTOBER 1974 . 30THE PLAINTIFF IN THE MAIN ACTION ALSO CLAIMS THAT THE COMMISSION WAS NOT COMPETENT TO ENACT THE RULES AT ISSUE , AS ONLY THE COUNCIL HAD THE POWER , UNDER ARTICLE 6 ( 6 ) OF REGULATION NO 804/68 , TO ALTER THE AMOUNT OF PRIVATE STORAGE AID IN RESPONSE TO A CHANGE IN THE REPRESENTATIVE RATE OF THE IRISH GREEN POUND . 31IN THAT CONNEXION , THE PLAINTIFF IN THE MAIN ACTION POINTS OUT THAT IT WAS BY A REGULATION OF THE COUNCIL ( REGULATION NO 3141/73 , OFFICIAL JOURNAL 1973 , L 321 , P . 1 ) THAT IN NOVEMBER 1973 THE NETHERLANDS WERE AUTHORIZED TO GRANT FOR STOCKS OF BUTTER AND OF CREAM , WHICH AT THE DATE OF THE DECISION BY THE NETHERLANDS AUTHORITIES TO REVALUE THE GUILDER BY 5 % WERE SUBJECT TO STORAGE CONTRACTS , A SPECIAL AID INTENDED TO COUNTERACT THE LOSS OF VALUE WHICH RESULTED FROM THE APPLICATION OF THE RAISED AGRICULTURAL EXCHANGE RATE FOR THE GUILDER . 32ACCORDING TO ARTICLE 6 ( 7 ) OF REGULATION NO 804/68 , ' ' DETAILED RULES FOR THE APPLICATION OF THIS ARTICLE , AND IN PARTICULAR THE AMOUNT OF AID FOR PRIVATE STORAGE , SHALL BE ADOPTED IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 30 ' ' . 33CHARACTERIZED BY THE PRESENCE OF THE ' ' MANAGEMENT COMMITTEE FOR MILK AND MILK PRODUCTS ' ' , THAT PROCEDURE CONFERS RULE-MAKING POWERS ON THE COMMISSION WHICH ENABLE IT TO ADOPT LEGISLATIVE MEASURES IN SUCH FIELDS AS THE ARRANGEMENTS FOR AID FOR PRIVATE STORAGE OF BUTTER . 34SINCE REGULATION NO 2517/74 RELATES PRECISELY TO THOSE ARRANGEMENTS , THE COMPLAINT OF LACK OF COMPETENCE RAISED IN THE PRESENT CASE IS WITHOUT ANY LEGAL FOUNDATION . 35FINALLY , THE PLAINTIFF IN THE MAIN ACTION COMPLAINS THAT THERE IS NO ADEQUATE STATEMENT OF THE REASONS ON WHICH REGULATION NO 2517/74 IS BASED . 36THE REASONS ON WHICH A PIECE OF LEGISLATION IS BASED MAY APPEAR NOT ONLY FROM ITS OWN WORDING , BUT ALSO FROM THE WHOLE BODY OF THE LEGAL RULES GOVERNING THE FIELD UNDER CONSIDERATION . 37SITUATED IN THE CONTEXT OF THE RULES GOVERNING INTERVENTION ARRANGEMENTS LAID DOWN BY REGULATIONS NO 804/68 AND NO 985/68 OF THE COUNCIL , AND MORE PARTICULARLY IN THAT OF PRIVATE STORAGE AID , REGULATION NO 2517/74 MAKES IT POSSIBLE TO DISCERN THE REASONS JUSTIFYING THE ADDITION OF THE LAST SUBPARAGRAPH TO ARTICLE 29 OF REGULATION NO 685/69 . 38FOR THOSE REASONS , THE APPROPRIATE ANSWER IS THAT CONSIDERATION OF THE THIRD QUESTION RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATION NO 2517/74 OF THE COMMISSION . 39IN VIEW OF THIS ANSWER , THERE IS NO NEED TO CONSIDER THE FOURTH QUESTION RAISED . Decision on costs COSTS 40THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . 41AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE MATTER FOR THAT COURT . Operative part ON THOSE GROUNDS , THE COURT ( FIRST CHAMBER ) IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE HIGH COURT OF IRELAND BY AN ORDER OF THAT COURT DATED 13 JULY 1977 , HEREBY RULES : 1 . REGULATION NO 2498/74 OF THE COUNCIL OF 2 OCTOBER 1974 BROUGHT ABOUT AN INCREASE IN THE BUYING-IN PRICE FOR BUTTER EXPRESSED IN IRISH POUNDS , BY VIRTUE OF THE PROVISIONS OF ARTICLE 29 OF REGULATION NO 685/69 OF THE COMMISSION OF 14 APRIL 1969 , AS SUPPLEMENTED BY REGULATION NO 2517/74 OF THE COMMISSION OF 3 OCTOBER 1974 . 2 . CONSIDERATION OF THE THIRD QUESTIONS RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATION NO 2517/74 OF THE COMMISSION . 3 . REGULATION NO 2517/74 OF THE COMMISSION APPLIES TO STORAGE CONTRACTS ENTERED INTO BEFORE THE ENTRY INTO FORCE OF REGULATION NO 2498/74 OF THE COUNCIL , IN RESPECT OF QUANTITIES OF BUTTER NOT YET REMOVED IN THE PROPER MANNER FROM STORAGE ON THAT DATE , NAMELY 7 OCTOBER 1974 .

Lord Justice Longmore: Introduction On 25th June 2007 the river Foulness burst its banks at Shiptonthorpe near York as many other Yorkshire rivers did. Numerous houses suffered flood damage in particular the home of Mr and Mrs Yeates at Riverside, Town Street. Naturally enough they looked to their insurers to settle a substantial claim for damage to their property. Mr Yeates decided he would incorporate himself into a company called Pro Man Restorations Ltd ("PMR") which would offer services as a project manager or main contractor. He says that he intended the company to provide services for anyone who needed such services after the flood, as the company's website stated. In fact, however, it has never provided any services to anyone except to himself and his wife. He procured PMR to produce and submit to insurers a Damage Report and Specification for repair to the house. PMR also produced a Bill of Costs in the sum of £220,245 plus VAT which included a project management fee of £12,150 plus VAT. He never informed the insurers or their loss adjusters, Cunningham Lindsey Ltd, that PMR was just himself in a corporate guise and insurers made various payments to Mr Yeates on account of his loss. However in due course they discovered the position and maintained that he had put forward a fraudulent claim or had used a fraudulent device in support of his claim; they not only refused to make further payments but sought to recover the sums already paid by them on the basis that Mr Yeates had forfeited his claim entirely. This caused Mr Yeates to institute proceedings. The insurers served a defence but also applied for summary judgment on the basis their defence to the claim was so certain that no trial was necessary. HHJ Kaye QC, sitting in the Leeds Mercantile Court, agreed with the insurers and accordingly gave judgment in their favour on 23rd September 2012. He gave Mr Yeates permission to appeal on the basis that the law as to fraudulent claims and devices was in a state of development and his decision had serious consequences for the claimant. 7 months passed before Mr Yeates decided to serve a notice of appeal, his time for serving that notice of appeal having expired on 14th October 2010. His first explanation of this delay in June 2011 was that he was unaware of the time limit. It was only in February 2012 that Mr Yeates disclosed (with appropriate redactions) a letter from Carrick Read (who had been acting for him at the hearing) explaining that the time limit for appealing did indeed expire on 14th October. The first issue for this court is whether in those circumstances Mr Yeates should have an extension of time for appealing. Shortly after the enactment of the Civil Procedure Rules it was decided in Sayers v Clarke Walker [2002] 1 WLR 3095 that the court must not only take into account the overriding objective in C.P.R. 1.1 of enabling the court to deal with cases justly but also the checklist of considerations listed in C.P.R. 3.9(1) as circumstances to be considered on an application for relief from sanctions. These are a) the interests of the administration of justice; b) whether the application for relief has been made promptly; c) whether the failure to comply was intentional; d) whether there is a good explanation for the failure; e) the extent to which the party in default has complied with other rules, practice directions and court orders … f) whether the failure to comply was caused by the party or his legal representative; g) whether the trial date or the likely date can still be met if relief is granted; h) the effect which the failure to comply had on each party; and i) the effect which the granting of relief would have on each party. The present case is different from Sayers in one important respect because in that case the judge had not himself granted permission to appeal. This court therefore had to consider whether to extend the time for service of the notice of appeal (by about 2 months) so that an application for permission to appeal could be made. Having heard argument for over an hour on that question (see para 38) they reserved judgment for about a month and, having decided that an extension of time should be granted, they then adjourned the application for permission to appeal itself to a later date for a further 30 minute hearing. The Weekly Law Reports do not record the fate of that application. In the present case by contrast the judge himself gave permission to appeal and it was therefore agreed before us that Mr Yeates has a real, as opposed to a fanciful, prospect of success on any appeal. In these circumstances the Civil Appeals Office asked a supervising Lord Justice for listing directions; Richards LJ on 8th July 2011 confirmed an earlier direction of Deputy Master Meacher to list the application for an extension of time with appeal to follow, if granted, since what the learned Lord Justice called "the merits" were in any event "going to be in play in the application for an extension of time" and efficiency required a "final disposal" of the matter. One day was estimated for this exercise; in the event argument on the extension of time with some reference to the merits took more than half a day and left us in a position in which it was necessary to reserve judgment, in any event, on that question. We therefore proceeded to hear the appeal but in a slightly truncated form since time limits had to be imposed to enable the appeal to be determined within the allotted estimate, if an extension of time was to be granted. In these circumstances it is appropriate to say something more about the facts of the case. The Facts The flood occurred, as already stated, on 25th June 2007. On or about 5th September 2007 Mr Yeates sent insurers a damage report and repair specification from PMR who described themselves as "Project Managers/Main Contractors" who would hand the keys back to the "client" after "they" were satisfied. On 26th September PMR submitted an invoice for their services in the sum of £9,745.81 plus VAT stating that any queries should be addressed to their "accounts department". Insurers paid this bill but, since PMR had no bank account at that stage, the money found its way (in circumstances which neither counsel could elucidate for us) into Mr Yeates' personal account. On 8th October Mr Yeates sent a purported alteration to the specification under cover of a letter from PMR which identified Mr Yeates as their "client". A subsequent prospective bill of costs submitted to the insurers by PMR included a charge of £12,150 plus VAT for project management services. On the face of them, these documents constituted representations that PMR was a corporate entity with an accounts department rendering business services to Mr Yeates who was the client. In fact PMR was to all intents and purposes the same as Mr Yeates. It had no clients other than Mr Yeates who was the same as PMR and had no "department" whether for accounts or otherwise. Mr Yeates could not, as insured, charge for time and energy spent by him in relation to his insurance claim; if, however, PMR was a genuine third party company charging for proper services such charge might be recoverable from insurers as a legitimate part of a claim for substantial damage to his property. As against all this, it can be said that the PMR report of 5th September refers to damage to "Riverside" and at the bottom of the title page there is an address given of "Riverside Town Street" which might lead an alert and intelligent reader to inquire whether that address was merely a reference to the property which was the subject of the damage report or was intended to be a reference to the address of PMR itself which might then lead such reader to a further inquiry whether PMR and Mr Yeates shared that address and whether there was any relationship between them. Moreover the first page of the repair specification which states that the project managers are to be PMR also states "Proprietors: Mr and Mrs Ian Bartley Yeates." Again an alert and intelligent reader might be prompted to ask himself whether Mr and Mrs Yeates are being referred to as proprietors of the damaged property or as proprietors of PMR or perhaps both. The judge dealt with all this documentary material by saying (para 20) that, subject to what he called the two above "exceptions", the documents "were intended to and did give the impression that [PMR] was a company wholly separate and apart from Mr and Mrs Yeates." He then said (para 42) that, when he took into account the above exceptions, they "were at best from the claimant's point of view ambivalent or at least equally capable of being construed as a reference to either the property which was the subject of the report or to the policy holders." I therefore do not read the judge's reference to the "exceptions" in para 20 as ultimately qualifying his conclusion that Mr Yeates intended to and did give the impression to insurers that PMR was wholly separate and apart from Mr and Mrs Yeates. For my part I would agree with that conclusion and do not consider that any contrary conclusion could, as a matter of fact, be seriously arguable. Substance of any appeal That conclusion would not, however, inevitably mean that any appeal would be dismissed, since it may be arguable that not every representation made in relation to the presentation of a claim constitutes a fraudulent claim or a fraudulent device of a kind which would at common law defeat an otherwise good claim. In Agapitos v Agnew [2003] QB 556, 569 para 30 Mance LJ said:- "A fraudulent claim exists where the insured claims, knowing that he has suffered no loss, or only a lesser loss than that which he claims … A fraudulent device is used if the insured believes that he has suffered the loss claimed, but seeks to improve or embellish the facts surrounding the claim, by some lie." Mr David Pliener, who has appeared pro bono for Mr Yeates (since his solicitors at the summary judgment hearing have come off the record) and to whom the court is considerably indebted for his clear and forceful submissions on Mr Yeates' behalf, submitted in relation to the merits of any appeal:- i) it was no lie for Mr Yeates to incorporate a company rendering services to himself or for that company either to refer to Mr Yeates as a client or to charge a management fee for its services; ii) the judge did not ask himself whether Mr Yeates' actions were knowingly dishonest but only whether Mr Yeates was open with insurers about his relationship with PMR which was the wrong question; iii) the question whether Mr Yeates intended to deceive the insurers should not be decided on an application for summary judgment; if it could in theory be decided, then the only permissible conclusion was that dishonesty had not been shown to the requisite Derry v Peek standards; iv) there was no evidence that insurers had actually been misled; the fact that they had paid a sum on account was attributable to the fact that there was a genuine claim; v) the claim for a project management fee (which was in fact never paid) was for only 3% of the claim and should be treated as immaterial. It is against this background that Mr Yeates' application for an extension of time for appealing has to be determined. Extension of Time: The Facts HHJ Kaye QC gave judgment dismissing Mr Yeates' claim and entering judgment on the insurers' counterclaim for damages to be assessed and granted permission to appeal on 23rd September 2010. Mr Yeates had been represented by Messrs Carrick Read who had instructed Ms Claire Jackson on his behalf. He was evidently alive to the possible consequences of the judgment since, on the same day, he gave notice of severance of the joint tenancy in respect of his house which he enjoyed with his wife. Pursuant to CPR 52.4(2)(b) he had 21 days to serve any notice of appeal; the time for doing so expired on 14th October. No notice of appeal was served. The insurers' counterclaim related to the sums which they had paid on account and interest on those sums. Naturally enough Messrs Greenwoods (who were acting on their behalf) pressed for payment of those sums and costs totalling £169,923 but on 10th January 2011 Carrick Read informed them that they were no longer acting for Mr Yeates who would from then on be acting in person. In these circumstances Greenwoods had to correspond with Mr Yeates in person and had to apply to the court for an order for repayment of the sums paid and interest. That application came before HHJ Behrens on 19th April 2011 and Mr Yeates appeared in person. He informed Judge Behrens that he had permission to appeal and persuaded the judge that any order for payment should be subject to a stay to enable him to pursue his appeal even though no notice of appeal had been served. The judge ordered payment of £148,027 but stayed his order until 10th May 2011 to enable Mr Yeates to apply for an extension of time and serve a notice of appeal which would then be nearly 7 months out of time. On either 10th May or 11th May an incomplete notice of appeal was served. It was returned because it was not in proper order; Mr Yeates put it in proper order on 9th June 2011 when it was issued and sealed by the Civil Appeal Office ("the Office") now nearly 8 months out of time. Meanwhile Mr Yeates had served a copy of his unsealed notice of appeal on Greenwoods. On 20th May 2011 they wrote to the Office pointing out that, although Mr Yeates had ticked the box in Part B of Section 9 of the unsealed notice applying for an extension of time he had not (as required by that Part) given any reasons for the delay in serving the Notice. They gave reasons for inviting the court to dismiss the application for an extension of time and marking it as "totally without merit", observing that Mr Yeates would have to establish that the legal representatives, appearing for him at the hearing, did not advise what steps were necessary for the purpose of appealing the judgment. Mr Yeates was asked by the Office to explain the delay but he confined his initial response of 3rd June 2011 to the reasons for the delay since 11th May. He said that he was unaware that the Office had returned his notice of appeal until he had been prompted, by Greenwoods' renewed indication of enforcement, to telephone the Office on 3rd June 2011. On 15th June 2011 the Office specifically asked Mr Yeates to explain the reasons for his delay from September 2010 in appealing and on 17th June he gave the reasons. They deserve to be set out in full but it is perhaps the second reason that could, in theory, be the most persuasive reason to extend the time for appealing:- "1. I was extremely shocked after the decision of the judgment in favour of the defendant summary judgment application, and this had a detrimental effect to my state of mind for some considerable period of time. 2. I was not aware that there was a time limit of 28 days for an appeal to be lodged. 3. My financial situation was (and still is) in a very precarious position as a result of this. I have a large liability to my former solicitor. 4. I was and continue to be under a large amount of stress and worry over my future as a result. 5. During the months following the judgment, my work commitments had me working overseas for most of what was the rest of the year. 6. My solicitor instructed me to discharge his company in the new year. Following this, correspondence then took place with the defendant's solicitor directly, this continued until the hearing of the 19th April 2011, during this hearing before HHJ Behrens, I stated my wish to appeal the original judgment on 23rd September 2010 and that permissions to appeal had been granted. 7. HHJ Behrens granted a stay of execution for me to file my appeal. 8. The appeal was submitted to the office of the court of appeals within the time of the stay of execution. 9. I have had to produce the bundle and all other documentation unaided due to my inability to finance any other party to act on my behalf." On receipt of this explanation, the Office provided Mr Yeates with a copy of Greenwoods letter of 20th May and invited his comments. Mr Yeates provided comments under cover of a letter of 2nd July the substance of which was to refer, in relation to the delay in serving his notice of appeal, to his earlier reasons for granting him an extension of time. By 9th January 2012 Mr Yeates had been able to instruct Mr Pliener through the Bar Pro Bono Unit and on that date a new skeleton argument was provided in amplification of (and effective replacement for) Mr Yeates' own skeleton argument of 7th May 2011. That skeleton repeated that Mr Yeates did not appreciate the relevant time limit. That prompted Greenwoods to write to Mr Yeates on 20th January 2012 for his authority to allow them to contact Carrick Read to ask them whether they had informed him about the time limit for appealing, warning him that, if he declined, they would ask the court to infer that he had been so informed. On 24th January Mr Yeates told Greenwoods that he would serve a witness statement dealing with the point. That witness statement (now Mr Yeates' fourth explanation after his statement of 3rd June and letters of 17th June and 2nd July 2011) said this:- "12. Since obtaining representation from the Bar Pro Bono Unit I have been invited to go through all the correspondence with my solicitors in the relevant period. I have set out most of it above. However, I have very recently come upon a letter dated 1st October from my solicitors in which I now see they advised me an appeal notice needed to be filed by 14th October 2010. …." Extension of Time: Submissions In these circumstances Mr Shail Patel for the insurers submitted that an extension of time for appealing should not be granted since all the circumstances which the court is enjoined to consider pursuant to CPR 3.9(1) save (e) and perhaps (i) pointed against Mr Yeates and in favour of insurers:- a) the interests of the administration justice required the appeal to be dealt with promptly in accordance with relevant time-limits; b) the application had not been made promptly; c) since Mr Yeates had been told of the time limit for appealing he must have decided not to appeal so that his failure to comply with the time limit was intentional; d) if it was not intentional, there was no satisfactory explanation for allowing 7 months to elapse; it was only insurers' attempts to enforce their judgment on the counterclaim and in respect of costs that caused Mr Yeates to take any action at all; f) it was now clear that the failure was that of Mr Yeates himself and not that of his legal representatives; g) if an extension of time was granted and the appeal allowed, any trial date would be occurring 6 years after the loss; h) insurers, like any other defendant must be allowed to assume that their files could be closed once the time for appealing had elapsed; i) the granting of an extension would result in an indefinite postponement of the ascertainment of the parties legal rights. He also submitted that there was no public interest in allowing a late appeal which on any view raised difficult issues when Mr Yeates, even if not guilty of positive misrepresentation, had (in the judge's words) at best made ambivalent representations and been less than honest in his pre-action disclosure, particularly when that lack of openness or honesty had continued in his initial explanations of his delay in appealing. Mr Pliener submitted that CPR 3.9(1) was subject to the overriding objective in CPR 3.1.1 of doing justice between the parties. If an extension of time was not granted Mr Yeates would not only be deprived of an important and valuable right of appeal (already held to be a realistic and not a fanciful right) which would in all probability succeed but would also be left with a severely damaged and scarcely habitable home which would have to be sold (for whatever it might fetch) to satisfy the judgment in insurers' favour. He further submitted that, although neither the merits of the underlying case nor the consequences of the refusal of relief were expressly mentioned as relevant circumstances in CPR 3.9(1), both must be relevant considerations in the overall exercise of discretion. He also stressed the factors mentioned in Mr Yeates' letter of 17th June about which Mr Yeates had provided a witness statement namely the state of shock in which the judgment below had left him and that he had acted promptly once HHJ Behrens had emphasised the importance of serving a notice of appeal and given him the opportunity to do so. He also submitted that it was particularly unfair that Mr Yeates had effectively been branded a fraudster on a summary judgment application without being given the opportunity to give evidence on the critical question of whether he had intended to deceive the insurers. Extension of Time: Disposition Despite Mr Pliener's excellent submissions, I have come to the conclusion that it would not be right to extend the time for appealing in the circumstances of this case. Sayers v Clarke Walker emphasised the new and stricter criteria which apply to extensions of time after the Bowman report on the practice of the Civil Division of the Court of Appeal and the new Civil Procedure Rules. Under the old practice the merits of the proposed appeal were, in practice, the most important consideration. Paragraph 54 of the Bowman report said that it was about time that rules about time limits were strictly complied with and that there should be a strong presumption that time limits should not be extended save in exceptional circumstances, regardless of the chances of success. That philosophy was endorsed by this court in Sayers. Brooke LJ accepted that the sanction in relation to a failure to serve a notice of appeal in time (namely that no appeal will take place if an extension of time is not granted) was implied rather than express but said (para 21) that nevertheless the check-list in CPR Rule 3.9 should be followed. It should be noted, however, that that check-list makes no express reference either to the merits of the appeal or to the prejudice which will be suffered by a prospective appellant if an extension is not granted. These two considerations are often two different sides of the same coin (as they largely are in the present case). In relation to the merits of any prospective appeal, Brooke LJ said in terms in Sayers (para 34) that they will have to be considered when the question of extending time is itself difficult to resolve. That has recently been followed in Bank of Scotland v Pereira [2011] WLR 2391 per Lord Neuberger MR at para 64. For my part I do not consider the question of an extension of time particularly difficult to resolve in this case. In the first place, like many a litigant, Mr Yeates did nothing to pursue his right to appeal until his successful opponent took steps to enforce the judgment which it had obtained. Burying one's head in the sand can very seldom lead to this court exercising a discretion in one's favour, even if the reasons for so burying one's head are understandable in human terms. Otherwise an extension of time will be too often granted. Secondly it is of the highest importance that any would-be appellant is full and frank with the court. It may be a legitimate argument that mere failure to be open with an insurer should not enable the insurer to invoke the harsh common law rules about fraudulent claims and fraudulent devices. But it is quite another thing when it comes to asking the court to grant a substantial extension of time. In this case Mr Yeates did not only not reveal that his solicitors had advised him that any notice of appeal had to be served by 14th October 2010 but he sought positively and falsely to assert that he was not aware of any time limit at all for serving his notice of appeal. That is the sort of conduct which will almost inevitably lead the court to decline to exercise its discretion in favour of a would-be appellant regardless of the merits of an appeal. Moreover, the merits of the proposed appeal are highly debatable. The starting point has to be that, as the judge found, Mr Yeates intended to and did give the false impression to insurers that PMR was wholly separate from himself and his wife. Although Mr Yeates has in theory the legal arguments which are recorded in paragraph 13 above, they are arguments of doubt and difficulty which start from a distinctly unmeritorious premise. In these circumstance there is no reason why the court should lend its aid to a doubtful and difficult appeal which is now well out of time. Before the enactment of the new CPR, the civil courts were often criticised in relation to the delays litigants encountered in obtaining justice. If that criticism is now less often heard, it is largely because there is a new culture that the rules as to time must be obeyed in all but unusual cases. It is important that that culture should be upheld and that must lead to the conclusion that in this case the necessary extension of time for the purpose of appealing should be refused. Conclusion I am therefore not persuaded that Mr Yeates' application, for an extension of time within which to appeal, should be granted. The result of this is that there can be no appeal and the debatable points of law which Mr Yeates wants to air will have to be debated and decided (if at all) in some other case. Lord Justice Rimer: I agree. Lord Justice Kitchin: I also agree.

Opinion of Mr Advocate General Geelhoed delivered on 25 October 2001. - Commission of the European Communities v Ireland. - Failure by a Member State to fulfil its obligations - Directive 96/48/EC - Interoperability of the trans-European high-speed rail system. - Case C-372/00. European Court reports 2001 Page I-10303 Opinion of the Advocate-General 1. In this case the Commission of the European Communities requests the Court to declare, pursuant to Article 226 EC, that Ireland has failed to fulfil its obligations under Council Directive 96/48/EC of 23 July 1996 on the interoperability of the trans-European high-speed rail system in force (the directive). 2. The object of the directive is to improve the interlinking and interoperability of national networks and also access to those networks. 3. By virtue of Article 23(1) of the directive the Member States are required to amend and adopt the legal and administrative provisions necessary in order to comply with the directive no later than 30 months after its entry into force. In addition, the Member States must forthwith inform the Commission thereof. 4. Article 25 of the directive provides that the directive is to enter into force on the 21st day following its publication in the Official Journal of the European Communities. Since the directive was published on 17 September 1996, it entered into force on 8 October 1996 and the Member States ought to have fulfilled their obligations under the directive by 8 April 1999 at the latest. 5. The Irish Government acknowledges that the directive was not implemented in good time. It points out in that regard that the competent minister has reached an advanced stage in drafting legislation. The Irish Government observes also that there are currently no high-speed trains operational in Ireland. In addition, it notes that at the time the defence was lodged in this action the technical specifications for interoperability (TSIs) referred to in Chapter II of the directive had not yet been approved or finalised. 6. I would observe that the Irish Government has not disputed the infringement. The fact that no high-speed trains are currently operational in Ireland is irrelevant. The Court has on many occasions ruled that the fact that an activity referred to in a directive does not exist in a particular Member State cannot release that State from its obligation to adopt laws or regulations in order to ensure that all the provisions of the directive are properly transposed. 7. To my mind, the observation concerning TSIs is also without pertinence. As the Commission has correctly pointed out during the written procedure, under Article 4 of the directive the trans-European high-speed rail system, subsystems and their interoperability constituents must meet the essential requirements laid down in Annex III to the directive. Those essential requirements apply independently of the existence of TSIs. The fact that the TSIs have not yet been completed cannot, therefore, amount to justification for late implementation of the directive. Conclusion In the light of the facts and circumstances set out above, I propose that the Court should: (a) declare that, by failing to adopt the laws, regulations and administrative provisions necessary to comply with Council Directive 96/48/EC of 23 July 1996 on the interoperability of the trans-European high-speed rail system, Ireland has failed to fulfil its obligations under that directive; (b) order Ireland to pay the costs in accordance with Article 69(2) of Rules of Procedure.

Lord Justice Thorpe: This is an unusual case in which a mother in cohabitation with a father, caring for a ten-year old child, conceived again and apparently concealed from all her pregnancy and imminent birth. Following birth, seemingly in the home, the mother delivered the child to a local hospital and made it plain that she did not seek to care for the child. That presented the local authority with an obvious responsibility. They applied for a care order, and within the care proceedings a guardian for the child has been appointed. All this occurred in the summer of 2007, so the child is now 17 months old. Unfortunately, plans for J's future have become bogged down in the difficult question of whether or not the father should be told of this reality. The question was first considered by HHJ Taylor, who said that the father should be informed. The mother then applied for that decision to be set aside. The application came on 16 May before HHJ Lancaster, because seemingly HHJ Taylor's list overran. He granted the relief sought, the local authority and the guardian being present but essentially taking no part. Subsequently, it became apparent that the decision of 16 May had been taken without proper preparation of the essential evidence. There had been nothing before the court except a position statement filed on the mother's behalf. There was no evidence from her directly, and accordingly an application was made for a full review, and directions were given by HHJ Lancaster on 7 July with a view to the review on 31 July. However, on 31 July he reached the erroneous conclusion that he had no jurisdiction to re-engage, on the ground that Rule 37 of the County Court Rules had been discharged. What he was not told, and what he did not appreciate, was that that discharge was in relation to civil proceedings in the County Court but not family. The guardian has taken the lead in this court, applying for permission to appeal, and the case comes before us as a result of the direction of Wall LJ of 5 November, saying that the application should be listed on notice to mother and the local authority, with appeal to follow. That notice produced a skeleton from the local authority in which they essentially support the guardian's appeal. The mother, although well aware of this hearing, has elected to take no part. So it seems to me a simple business for us to allow this appeal by consent and to set aside the orders of HHJ Lancaster of 16 May and 31 July, and to direct that the core issue be determined on the next occasion in Newcastle, either by the liaison judge, Moir J, or as he may direct. The case deserves the maximum expedition because, until this difficult is resolved, J's future, either return to her natural family or adoption, cannot be settled. Given the importance of the mother's participation, I think we should also direct that she attends the hearing to give evidence, and it is desirable that her medical records be available to the judge. She has not complied with a direction that she produce her records but she has, we are told by Ms Morgan, signed an authority to enable the counsel to obtain those records. So that authority will be immediately exercised and the records should be in the hands of the local authority very quickly. So that is the disposal that I would propose. Lord Justice Rix: I agree. Lord Justice Richards: I also agree. Order: Appeal allowed.

Judgment of the Court of 12 March 1987. - Commission of the European Communities v Federal Republic of Germany. - Failure of a State to fulfil its obligations - Purity requirement for beer. - Case 178/84. European Court reports 1987 Page 01227 Swedish special edition Page 00037 Finnish special edition Page 00037 Summary Parties Grounds Decision on costs Operative part Keywords ++++ 1 . FREE MOVEMENT OF GOODS - QUANTITATIVE RESTRICTIONS - MEASURES HAVING EQUIVALENT EFFECT - MARKETING OF PRODUCTS - DISPARITIES BETWEEN NATIONAL LAWS - BARRIERS TO INTRA-COMMUNITY TRADE - PERMISSIBILITY - CONDITIONS AND LIMITS ( EEC TREATY, ART . 30 ) 2 . FREE MOVEMENT OF GOODS - QUANTITATIVE RESTRICTIONS - MEASURES HAVING EQUIVALENT EFFECT - LEGISLATION RESTRICTING A GENERIC DESIGNATION TO PRODUCTS MANUFACTURED IN ACCORDANCE WITH NATIONAL RULES - JUSTIFICATION - NONE ( EEC TREATY, ART . 30 ) 3 . FREE MOVEMENT OF GOODS - QUANTITATIVE RESTRICTIONS - MEASURES HAVING EQUIVALENT EFFECT - SYSTEM OF MANDATORY CONSUMER INFORMATION FOR CONSUMERS SHOWING A PREFERENCE FOR PRODUCTS MADE FROM PARTICULAR RAW MATERIALS - PERMISSIBILITY - CONDITIONS ( EEC TREATY, ART . 30 ) 4 . FREE MOVEMENT OF GOODS - DEROGATIONS - PROTECTION OF PUBLIC HEALTH - RULES ON THE USE OF FOOD ADDITIVES - JUSTIFICATION - CONDITIONS AND LIMITS ( EEC TREATY, ARTS 30 AND 36 ) Summary 1 . IN THE ABSENCE OF COMMON RULES RELATING TO THE MARKETING OF THE PRODUCTS CONCERNED, OBSTACLES TO FREE MOVEMENT WITHIN THE COMMUNITY RESULTING FROM DISPARITIES BETWEEN THE NATIONAL LAWS MUST BE ACCEPTED IN SO FAR AS SUCH RULES, APPLICABLE TO DOMESTIC AND TO IMPORTED PRODUCTS WITHOUT DISTINCTION, MAY BE RECOGNIZED AS BEING NECESSARY IN ORDER TO SATISFY MANDATORY REQUIREMENTS RELATING INTER ALIA TO CONSUMER PROTECTION . IT IS ALSO NECESSARY FOR SUCH RULES TO BE PROPORTIONATE TO THE AIM IN VIEW . IF A MEMBER STATE HAS A CHOICE BETWEEN VARIOUS MEASURES TO ATTAIN THE SAME OBJECTIVE IT SHOULD CHOOSE THE MEANS WHICH LEAST RESTRICTS THE FREE MOVEMENT OF GOODS . 2 . A MEMBER STATE IS NOT ENTITLED - ON THE GROUNDS OF THE REQUIREMENTS OF CONSUMER PROTECTION - TO RESTRICT THE USE OF A DESIGNATION TO PRODUCTS SATISFYING THE REQUIREMENTS OF ITS NATIONAL LEGISLATION . FIRSTLY, CONSUMERS' CONCEPTIONS ARE LIKELY TO VARY FROM ONE MEMBER STATE TO ANOTHER AND TO EVOLVE IN THE COURSE OF TIME WITHIN A MEMBER STATE, AND HENCE THE LEGISLATION OF THAT STATE MUST NOT CRYSTALLIZE GIVEN CONSUMER HABITS SO AS TO CONSOLIDATE AN ADVANTAGE ACQUIRED BY NATIONAL INDUSTRIES CONCERNED TO COMPLY WITH THEM, AND, SECONDLY, A GENERIC DESIGNATION MAY NOT BE RESTRICTED TO PRODUCTS MANUFACTURED IN ACCORDANCE WITH THE RULES IN FORCE IN THAT MEMBER STATE . 3 . WHERE CONSUMERS IN A MEMBER STATE ATTRIBUTE SPECIFIC QUALITIES TO A PRODUCT MANUFACTURED FROM PARTICULAR RAW MATERIALS, IT IS LEGITIMATE FOR THE MEMBER STATE IN QUESTION TO SEEK TO GIVE CONSUMERS THE INFORMATION WHICH WILL ENABLE THEM TO MAKE THEIR CHOICE IN THE LIGHT OF THAT CONSIDERATION . BUT THE MEANS USED TO THAT END MUST NOT PREVENT THE IMPORTATION OF PRODUCTS WHICH HAVE BEEN LEGALLY MANUFACTURED AND MARKETED IN OTHER MEMBER STATES . WHILST A SYSTEM OF MANDATORY INFORMATION IS PERMISSIBLE, IT MUST NOT ENTAIL NEGATIVE ASSESSMENTS FOR IMPORTED PRODUCTS MANUFACTURED IN ACCORDANCE WITH PROCESSES OTHER THAN THOSE IN USE IN THE IMPORTING MEMBER STATE . 4 . IN VIEW OF THE UNCERTAINTIES AT THE PRESENT STATE OF SCIENTIFIC RESEARCH WITH REGARD TO FOOD ADDITIVES AND OF THE ABSENCE OF HARMONIZATION OF NATIONAL LAW, ARTICLES 30 AND 36 OF THE TREATY DO NOT PREVENT NATIONAL LEGISLATION FROM RESTRICTING THE CONSUMPTION OF ADDITIVES BY SUBJECTING THEIR USE TO PRIOR AUTHORIZATION GRANTED BY A MEASURE OF GENERAL APPLICATION FOR SPECIFIC ADDITIVES, IN RESPECT OF ALL PRODUCTS, FOR CERTAIN PRODUCTS ONLY OR FOR CERTAIN USES . HOWEVER, IN APPLYING SUCH LEGISLATION TO IMPORTED PRODUCTS CONTAINING ADDITIVES WHICH ARE AUTHORIZED IN THE MEMBER STATE OF PRODUCTION BUT PROHIBITED IN THE MEMBER STATE OF IMPORTATION, THE NATIONAL AUTHORITIES MUST, IN VIEW OF THE PRINCIPLE OF PROPORTIONALITY UNDERLYING THE LAST SENTENCE OF ARTICLE 36 OF THE TREATY, RESTRICT THEMSELVES TO WHAT IS ACTUALLY NECESSARY TO SECURE THE PROTECTION OF PUBLIC HEALTH . ACCORDINGLY THE USE OF A SPECIFIC ADDITIVE WHICH IS AUTHORIZED IN ANOTHER MEMBER STATE MUST BE AUTHORIZED IN THE CASE OF A PRODUCT IMPORTED FROM THAT MEMBER STATE WHERE, IN VIEW, ON THE ONE HAND, OF THE FINDINGS OF INTERNATIONAL SCIENTIFIC RESEARCH, AND IN PARTICULAR OF THE WORK OF THE COMMUNITY' S SCIENTIFIC COMMITTEE FOR FOOD, THE CODEX ALIMENTARIUS COMMITTEE OF THE FAO AND THE WORLD HEALTH ORGANIZATION, AND, ON THE OTHER HAND, OF THE EATING HABITS PREVAILING IN THE IMPORTING MEMBER STATE, THE ADDITIVE IN QUESTION DOES NOT PRESENT A RISK TO PUBLIC HEALTH AND MEETS A REAL NEED, ESPECIALLY A TECHNICAL ONE . THE CONCEPT OF TECHNOLOGICAL NEED MUST BE ASSESSED IN THE LIGHT OF THE RAW MATERIALS UTILIZED AND BEARING IN MIND THE ASSESSMENT MADE BY THE AUTHORITIES OF THE MEMBER STATE WHERE THE PRODUCT WAS MANUFACTURED AND THE FINDINGS OF INTERNATIONAL SCIENTIFIC RESEARCH . BY VIRTUE OF THE PRINCIPLE OF PROPORTIONALITY, TRADERS MUST ALSO BE ABLE TO APPLY, UNDER A PROCEDURE WHICH IS EASILY ACCESSIBLE TO THEM AND CAN BE CONCLUDED WITHIN A REASONABLE TIME, FOR THE USE OF SPECIFIC ADDITIVES TO BE AUTHORIZED BY A MEASURE OF GENERAL APPLICATION . IT MUST BE OPEN TO TRADERS TO CHALLENGE BEFORE THE COURTS AN UNJUSTIFIED FAILURE TO GRANT AUTHORIZATION . WITHOUT PREJUDICE TO THE RIGHT OF THE COMPETENT NATIONAL AUTHORITIES OF THE IMPORTING MEMBER STATE TO ASK TRADERS TO PRODUCE THE INFORMATION IN THEIR POSSESSION WHICH MAY BE USEFUL FOR THE PURPOSE OF ASSESSING THE FACTS, IT IS FOR THOSE AUTHORITIES TO DEMONSTRATE THAT THE PROHIBITION IS JUSTIFIED ON GROUNDS RELATING TO THE PROTECTION OF THE HEALTH OF ITS POPULATION . Parties IN CASE 178/84 COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY R . C . BERAUD, PRINCIPAL LEGAL ADVISER, AND J . SACK, A MEMBER OF ITS LEGAL DEPARTMENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF G . KREMLIS, ALSO A MEMBER OF THE COMMISSION' S LEGAL DEPARTMENT, JEAN MONNET BUILDING, KIRCHBERG, APPLICANT, V FEDERAL REPUBLIC OF GERMANY, REPRESENTED BY M . SEIDEL, MINISTERIALRAT AT THE FEDERAL MINISTRY OF ECONOMIC AFFAIRS, J . DIETRICH, MINISTERIALRAT AT THE FEDERAL MINISTRY OF YOUTH, FAMILY AFFAIRS AND HEALTH, J . SEDEMUND, RECHTSANWALT, COLOGNE, AND R . LUKES, PROFESSOR OF LAW IN THE UNIVERSITY OF MUENSTER, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF THE CHANCELLOR OF THE EMBASSY OF THE FEDERAL REPUBLIC OF GERMANY, 20-22 AVENUE E . REUTER, DEFENDANT, CONCERNING THE APPLICATION OF THE "REINHEITSGEBOT" (( PURITY REQUIREMENT )) TO BEERS IMPORTED FROM OTHER MEMBER STATES, THE COURT COMPOSED OF : LORD MACKENZIE STUART, PRESIDENT, Y . GALMOT, C . KAKOURIS, T . F . O' HIGGINS AND F . SCHOCKWEILER ( PRESIDENTS OF CHAMBERS ), G . BOSCO, T . KOOPMANS, O . DUE, U . EVERLING, K . BAHLMANN, R . JOLIET, J . C . MOITINHO DE ALMEIDA AND G . C . RODRIGUEZ IGLESIAS, JUDGES, ADVOCATE GENERAL : SIR GORDON SLYNN REGISTRAR : H . A . RUEHL, PRINCIPAL ADMINISTRATOR HAVING REGARD TO THE REPORT FOR THE HEARING AS SUPPLEMENTED FOLLOWING THE HEARING ON 13 AND 14 MAY 1986, AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 18 SEPTEMBER 1986, GIVES THE FOLLOWING JUDGMENT Grounds 1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 6 JULY 1984, THE COMMISSION OF THE EUROPEAN COMMUNITIES HAS BROUGHT AN ACTION UNDER ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT, BY PROHIBITING THE MARKETING OF BEERS LAWFULLY MANUFACTURED AND MARKETED IN ANOTHER MEMBER STATE IF THEY DO NOT COMPLY WITH ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ ( LAW ON BEER DUTY ) ( LAW OF 14 MARCH 1952, BUNDESGESETZBLATT I, P . 149 ), THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 OF THE EEC TREATY . 2 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR THE FACTS OF THE CASE, THE COURSE OF THE PROCEDURE AND THE ARGUMENTS OF THE PARTIES, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT . THE APPLICABLE NATIONAL LAW 3 IN THE COURSE OF THE PROCEEDINGS BEFORE THE COURT, THE GERMAN GOVERNMENT GAVE THE FOLLOWING ACCOUNT OF ITS LEGISLATION ON BEER, WHICH WAS NOT CONTESTED BY THE COMMISSION AND IS TO BE ACCEPTED FOR THE PURPOSES OF THESE PROCEEDINGS . 4 AS FAR AS THE PRESENT PROCEEDINGS ARE CONCERNED, THE BIERSTEUERGESETZ COMPRISES, ON THE ONE HAND, MANUFACTURING RULES WHICH APPLY AS SUCH ONLY TO BREWERIES IN THE FEDERAL REPUBLIC OF GERMANY AND, ON THE OTHER, RULES ON THE UTILIZATION OF THE DESIGNATION "BIER" ( BEER ), WHICH APPLY BOTH TO BEER BREWED IN THE FEDERAL REPUBLIC OF GERMANY AND TO IMPORTED BEER . 5 THE RULES GOVERNING THE MANUFACTURE OF BEER ARE SET OUT IN ARTICLE 9 OF THE BIERSTEUERGESETZ . ARTICLE 9 ( 1 ) PROVIDES THAT BOTTOM-FERMENTED BEERS MAY BE MANUFACTURED ONLY FROM MALTED BARLEY, HOPS, YEAST AND WATER . ARTICLE 9 ( 2 ) LAYS DOWN THE SAME REQUIREMENTS WITH REGARD TO THE MANUFACTURE OF TOP-FERMENTED BEER BUT AUTHORIZES THE USE OF OTHER MALTS, TECHNICALLY PURE CANE SUGAR, BEET SUGAR OR INVERT SUGAR AND GLUCOSE AND COLOURANTS OBTAINED FROM THOSE SUGARS . ARTICLE 9 ( 3 ) STATES THAT MALT MEANS ANY CEREAL ARTIFICIALLY GERMINATED . IT MUST BE NOTED IN THAT CONNECTION THAT UNDER ARTICLE 17 ( 4 ) OF THE DURCHFUEHRUNGSBESTIMMUNGEN ZUM BIERSTEUERGESETZ ( IMPLEMENTING PROVISIONS TO THE BIERSTEUERGESETZ ) OF 14 MARCH 1952 ( BUNDESGESETZBLATT I, P . 153 ) RICE, MAIZE AND SORGHUM ARE NOT TREATED AS CEREALS FOR THE PURPOSES OF ARTICLE 9 ( 3 ) OF THE BIERSTEUERGESETZ . UNDER ARTICLE 9 ( 7 ) OF THE BIERSTEUERGESETZ, DEROGATIONS FROM THE MANUFACTURING RULES LAID DOWN IN ARTICLE 9 ( 1 ) AND ( 2 ) MAY BE GRANTED ON APPLICATION IN SPECIFIC CASES IN RESPECT OF THE MANUFACTURE OF SPECIAL BEERS, BEER INTENDED FOR EXPORT OR BEER INTENDED FOR SCIENTIFIC EXPERIMENTS . IN ADDITION, UNDER ARTICLE 9 ( 8 ), ARTICLE 9 ( 1 ) AND ( 2 ) DO NOT APPLY TO BREWERIES MAKING BEER FOR CONSUMPTION ON THEIR PREMISES ( HAUSBRAUER ). UNDER ARTICLE 18 ( 1 ) ( 1 ) OF THE BIERSTEUERGESETZ FINES MAY BE IMPOSED FOR CONTRAVENTIONS OF THE MANUFACTURING RULES SET OUT IN ARTICLE 9 . 6 THE RULES ON THE COMMERCIAL UTILIZATION OF THE DESIGNATION "BIER" ARE SET OUT IN ARTICLE 10 OF THE BIERSTEUERGESETZ . UNDER THAT PROVISION ONLY FERMENTED BEVERAGES SATISFYING THE REQUIREMENTS SET OUT IN ARTICLE 9 ( 1 ), ( 2 ), ( 4 ), ( 5 ) AND ( 6 ) OF THE BIERSTEUERGESETZ MAY BE MARKETED UNDER THE DESIGNATION "BIER" - STANDING ALONE OR AS PART OF A COMPOUND DESIGNATION - OR UNDER OTHER DESIGNATIONS, OR WITH PICTORIAL REPRESENTATIONS, GIVING THE IMPRESSION THAT THE BEVERAGE IN QUESTION IS BEER . ARTICLE 10 OF THE BIERSTEUERGESETZ ENTAILS MERELY A PARTIAL PROHIBITION ON MARKETING IN SO FAR AS BEVERAGES NOT MANUFACTURED IN CONFORMITY WITH THE AFOREMENTIONED MANUFACTURING RULES MAY BE SOLD UNDER OTHER DESIGNATIONS, PROVIDED THAT THOSE DESIGNATIONS DO NOT OFFEND AGAINST THE RESTRICTIONS LAID DOWN IN THAT PROVISION . CONTRAVENTIONS OF THE RULES ON DESIGNATION MAY GIVE RISE TO A FINE UNDER ARTICLE 18 ( 1 ) ( 4 ) OF THE BIERSTEUERGESETZ . 7 IMPORTS INTO THE FEDERAL REPUBLIC OF GERMANY OF BEERS CONTAINING ADDITIVES WILL ALSO BE CONFRONTED BY THE ABSOLUTE PROHIBITION ON MARKETING IN ARTICLE 11 ( 1 ) ( 2 ) OF THE GESETZ UEBER DEN VERKEHR MIT LEBENSMITTELN, TABAKERZEUGNISSEN, KOSMETISCHEN MITTELN UND SONSTIGEN BEDARFSGEGENSTAENDEN ( LAW ON FOODSTUFFS, TOBACCO PRODUCTS, COSMETICS AND OTHER CONSUMER GOODS ), HEREINAFTER REFERRED TO AS THE "FOODSTUFFS LAW", OF 15 AUGUST 1974 ( BUNDESGESETZBLATT I, P.*1945 ). 8 UNDER THE FOODSTUFFS LAW, WHICH IS BASED ON CONSIDERATIONS OF PREVENTIVE HEALTH PROTECTION, ALL ADDITIVES ARE IN PRINCIPLE PROHIBITED, UNLESS THEY HAVE BEEN AUTHORIZED . ARTICLE 2 OF THE LAW DEFINES ADDITIVES AS "SUBSTANCES WHICH ARE INTENDED TO BE ADDED TO FOODSTUFFS IN ORDER TO ALTER THEIR CHARACTERISTICS OR TO GIVE THEM SPECIFIC PROPERTIES OR PRODUCE SPECIFIC EFFECTS ". IT DOES NOT COVER "SUBSTANCES WHICH ARE OF NATURAL ORIGIN OR ARE CHEMICALLY IDENTICAL TO NATURAL SUBSTANCES AND WHICH, ACCORDING TO GENERAL TRADE USAGE, ARE MAINLY USED ON ACCOUNT OF THEIR NUTRITIONAL, OLFACTORY OR GUSTATORY VALUE OR AS STIMULANTS, AND DRINKING AND TABLE WATER ". 9 ARTICLE 11 ( 1 ) ( 1 ) OF THE FOODSTUFFS LAW PROHIBITS THE USE OF UNAUTHORIZED ADDITIVES, WHETHER PURE OR MIXED WITH OTHER SUBSTANCES, FOR THE MANUFACTURE OR PROCESSING BY WAY OF TRADE OF FOODSTUFFS INTENDED TO BE MARKETED . ARTICLE 11 ( 2 ) ( 1 ) AND ARTICLE 11 ( 3 ) PROVIDE THAT THAT PROHIBITION DOES NOT COVER PROCESSING AIDS OR ENZYMES . ARTICLE 11 ( 2 ) ( 1 ) DEFINES PROCESSING AIDS AS "ADDITIVES WHICH ARE ELIMINATED FROM THE FOODSTUFF ALTOGETHER OR TO SUCH AN EXTENT THAT THEY ... ARE PRESENT IN THE PRODUCT FOR SALE TO THE CONSUMER ... ONLY AS TECHNICALLY UNAVOIDABLE AND TECHNOLOGICALLY INSIGNIFICANT RESIDUES IN AMOUNTS WHICH ARE NEGLIGIBLE FROM THE POINT OF VIEW OF HEALTH, ODOUR AND TASTE ". 10 ARTICLE 11 ( 1 ) ( 2 ) OF THE FOODSTUFFS LAW PROHIBITS THE MARKETING BY WAY OF TRADE OF PRODUCTS MANUFACTURED OR PROCESSED IN CONTRAVENTION OF ARTICLE 11 ( 1 ) ( 1 ) OR NOT CONFORMING WITH A REGULATION ISSUED PURSUANT TO ARTICLE 12 ( 1 ). UNDER ARTICLE 12 ( 1 ) A MINISTERIAL REGULATION APPROVED BY THE BUNDESRAT MAY AUTHORIZE THE USE OF CERTAIN ADDITIVES FOR GENERAL USE, FOR USE IN SPECIFIC FOODSTUFFS OR FOR SPECIFIC APPLICATIONS PROVIDED THAT IT IS COMPATIBLE WITH CONSUMER PROTECTION FROM THE POINT OF VIEW OF TECHNOLOGICAL, NUTRITIONAL AND DIETARY REQUIREMENTS . THE RELEVANT AUTHORIZATIONS ARE SET OUT IN THE ANNEXES TO THE VERORDNUNG UEBER DIE ZULASSUNG VON ZUSATZSTOFFEN ZU LEBENSMITTELN ( REGULATION ON THE AUTHORIZATION OF ADDITIVES IN FOODSTUFFS ) OF 22 DECEMBER 1981 ( BUNDESGESETZBLATT I, P.*1633 ), HEREINAFTER REFERRED TO AS "THE REGULATION ON ADDITIVES "). 11 AS A FOODSTUFF, BEER IS SUBJECT TO THE LEGISLATION ON ADDITIVES, BUT IT IS GOVERNED BY SPECIAL RULES . THE RULES ON MANUFACTURE IN ARTICLE 9 OF THE BIERSTEUERGESETZ PRECLUDE THE USE OF ANY SUBSTANCES, INCLUDING ADDITIVES, OTHER THAN THOSE LISTED THEREIN . AS A RESULT, THOSE RULES CONSTITUTE SPECIFIC PROVISIONS ON ADDITIVES WITHIN THE MEANING OF ARTICLE 1 ( 3 ) OF THE REGULATION ON ADDITIVES . THAT PARAGRAPH PROVIDES THAT THE REGULATION ON ADDITIVES IS TO BE WITHOUT PREJUDICE TO ANY CONTRARY PROVISIONS PROHIBITING, RESTRICTING OR AUTHORIZING THE USE OF ADDITIVES IN PARTICULAR FOODSTUFFS . IN THIS WAY, ADDITIVES AUTHORIZED FOR GENERAL USE OR FOR SPECIFIC USES IN THE ANNEXES TO THE REGULATION ON ADDITIVES MAY NOT BE USED IN THE MANUFACTURE OF BEER . HOWEVER, THAT EXCEPTION APPLIES ONLY TO SUBSTANCES WHICH ARE ADDITIVES WITHIN THE MEANING OF THE LAW ON FOODSTUFFS AND WHOSE USE IS NOT COVERED BY AN EXCEPTION LAID DOWN IN THE FOODSTUFFS LAW ITSELF, WHICH WAS ENACTED AFTER THE BIERSTEUERGESETZ . CONSEQUENTLY, THE PROHIBITION ON THE USE OF ADDITIVES IN BEER DOES NOT COVER PROCESSING AIDS OR ENZYMES . 12 AS A RESULT, ARTICLE 11 ( 1 ) ( 2 ) OF THE FOODSTUFFS LAW, IN CONJUNCTION WITH ARTICLE 9 OF THE BIERSTEUERGESETZ, HAS THE EFFECT OF PROHIBITING THE IMPORTATION INTO THE FEDERAL REPUBLIC OF GERMANY OF BEERS CONTAINING SUBSTANCES COVERED BY THE BAN ON THE USE OF ADDITIVES LAID DOWN BY ARTICLE 11 ( 1 ) ( 1 ) OF THE FOODSTUFFS LAW . THE SUBJECT-MATTER OF THE PROCEEDINGS 13 IT MUST FIRST BE ESTABLISHED WHETHER THE PROCEEDINGS ARE LIMITED TO THE PROHIBITION OF THE MARKETING UNDER THE DESIGNATION "BIER" OF BEER MANUFACTURED IN OTHER MEMBER STATES IN ACCORDANCE WITH RULES INCONSISTENT WITH ARTICLE 9 OF THE BIERSTEUERGESETZ OR WHETHER THEY EXTEND TO THE BAN ON THE IMPORTATION OF BEER CONTAINING ADDITIVES WHICH ARE AUTHORIZED IN THE MEMBER STATE OF ORIGIN BUT PROHIBITED IN THE FEDERAL REPUBLIC OF GERMANY . 14 IN ITS LETTER GIVING THE FEDERAL REPUBLIC OF GERMANY FORMAL NOTICE, THE COMMISSION' S OBJECTIONS WERE DIRECTED AGAINST ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ IN SO FAR AS THEY PRECLUDED THE IMPORTATION INTO THE FEDERAL REPUBLIC OF GERMANY OF BEERS WHICH, ALTHOUGH LAWFULLY MANUFACTURED IN OTHER MEMBER STATES, HAD NOT BEEN BREWED IN CONFORMITY WITH THE RULES APPLICABLE IN THE FEDERAL REPUBLIC OF GERMANY . THE COMMISSION TOOK THE VIEW THAT THAT MARKETING PROHIBITION COULD NOT BE JUSTIFIED ON GROUNDS OF THE PUBLIC INTEREST RELATING TO THE PROTECTION OF CONSUMERS OR THE SAFEGUARDING OF PUBLIC HEALTH . 15 IN ITS REPLY TO THAT LETTER THE GERMAN GOVERNMENT ARGUED THAT THE REINHEITSGEBOT WAS VITAL IN ORDER TO SAFEGUARD PUBLIC HEALTH : IF BEER WAS MANUFACTURED USING ONLY THE RAW MATERIALS LISTED IN ARTICLE 9 OF THE BIERSTEUERGESETZ THE USE OF ADDITIVES COULD BE AVOIDED . IN A SUPPLEMENTARY LETTER DATED 15 DECEMBER 1982 TO A MEMBER OF THE COMMISSION, THE GERMAN GOVERNMENT REPEATED THAT ARGUMENT AND MADE IT CLEAR THAT THE REQUIREMENT TO USE ONLY THE RAW MATERIALS LISTED IN ARTICLE 9 OF THE BIERSTEUERGESETZ INCLUDED THE PROHIBITION OF THE USE OF ADDITIVES, WHICH WAS DESIGNED TO PROTECT PUBLIC HEALTH . 16 IN ITS REASONED OPINION THE COMMISSION ADHERED TO ITS POINT OF VIEW . IT CONSIDERED THAT THE FACT THAT BEER BREWED ACCORDING TO THE GERMAN TRADITION OF THE REINHEITSGEBOT COULD BE MANUFACTURED WITHOUT ADDITIVES DID NOT SIGNIFY GENERALLY THAT THERE WAS NO TECHNOLOGICAL NECESSITY FOR THE USE OF ADDITIVES IN BEER BREWED ACCORDING TO OTHER TRADITIONS OR USING OTHER RAW MATERIALS . THE QUESTION OF THE TECHNOLOGICAL NECESSITY FOR THE USE OF ADDITIVES COULD BE DECIDED ONLY IN THE LIGHT OF THE MANUFACTURING METHODS EMPLOYED AND IN RELATION TO SPECIFIC ADDITIVES . 17 IN ITS REPLY TO THE REASONED OPINION THE GERMAN GOVERNMENT REITERATED ITS ARGUMENTS RELATING TO PREVENTIVE HEALTH PROTECTION WHICH, IN ITS VIEW, JUSTIFIED THE PROVISIONS IN ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ . HOWEVER, IT DID NOT ELUCIDATE THE EXACT SCOPE OF THAT LEGISLATION OR ITS RELATIONSHIP WITH THE RULES ON ADDITIVES . 18 IN THE STATEMENT OF THE GROUNDS IT RELIES ON IN ITS APPLICATION, THE COMMISSION COMPLAINS OF THE BARRIERS TO IMPORTS RESULTING FROM THE APPLICATION OF THE BIERSTEUERGESETZ TO BEERS MANUFACTURED IN OTHER MEMBER STATES FROM OTHER RAW MATERIALS OR USING ADDITIVES AUTHORIZED IN THOSE STATES . 19 IT WAS ONLY WHEN IT SUBMITTED ITS DEFENCE THAT THE GERMAN GOVERNMENT STATED THAT THE RULES ON THE PURITY OF BEER WERE CONTAINED IN TWO SEPARATE BUT COMPLEMENTARY PIECES OF LEGISLATION, AND PROVIDED THE DESCRIPTION OF ITS LEGISLATION WHICH IS GIVEN ABOVE . 20 IN ITS REPLY THE COMMISSION SET OUT ITS SEPARATE OBJECTIONS TO THE RULES ON DESIGNATION IN ARTICLE 10 OF THE BIERSTEUERGESETZ AND TO THE ABSOLUTE BAN ON ADDITIVES IN BEER . IN THE COMMISSION' S VIEW, THE GERMAN GOVERNMENT' S COMPREHENSIVE DESCRIPTION OF THE APPLICABLE LAW DOES NOT FUNDAMENTALLY ALTER THE FACTS UNDERLYING THIS CASE . THE COMMISSION STRESSES THAT ITS APPLICATION IS NOT AIMED EXCLUSIVELY AT ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ BUT GENERALLY AT THE PROHIBITION ON THE MARKETING OF BEER FROM OTHER MEMBER STATES WHICH DOES NOT SATISFY THE MANUFACTURING CRITERIA SET OUT IN THOSE PROVISIONS . IN ITS OPINION, THE PRECISE STATUTORY BASIS FOR THAT PROHIBITION IS OF NO IMPORTANCE . 21 IN THOSE CIRCUMSTANCES THERE ARE TWO REASONS WHY IT MUST BE CONSIDERED THAT THE APPLICATION IS DIRECTED BOTH AGAINST THE PROHIBITION ON THE MARKETING UNDER THE DESIGNATION "BIER" OF BEERS MANUFACTURED IN OTHER MEMBER STATES IN ACCORDANCE WITH RULES NOT CORRESPONDING TO THOSE IN ARTICLE 9 OF THE BIERSTEUERGESETZ, AND AGAINST THE PROHIBITION ON THE IMPORTATION OF BEERS CONTAINING ADDITIVES WHOSE USE IS AUTHORIZED IN THE MEMBER STATE OF ORIGIN BUT FORBIDDEN IN THE FEDERAL REPUBLIC OF GERMANY . 22 IN THE FIRST PLACE, THE COMMISSION IDENTIFIED THE SUBSTANCE OF THE INFRINGEMENT FROM THE OUTSET IN SO FAR AS FROM THE BEGINNING OF THE PRE-LITIGATION PROCEDURE IT CHALLENGED THE PROHIBITION ON MARKETING BEER IMPORTED INTO THE FEDERAL REPUBLIC OF GERMANY FROM OTHER MEMBER STATES WHICH IS NOT BREWED IN ACCORDANCE WITH THE RULES IN FORCE IN THE FEDERAL REPUBLIC OF GERMANY . IT REFERRED TO ARTICLE 9 OF THE BIERSTEUERGESETZ ONLY IN ORDER TO SPECIFY THOSE RULES MORE PRECISELY . AS THE GERMAN GOVERNMENT STATED, THE SCOPE OF ARTICLE 9 IS NOT RESTRICTED TO RAW MATERIALS BUT ALSO COVERS ADDITIVES . BESIDES, THE ARGUMENTS DEVELOPED BY THE COMMISSION DURING THE PRE-LITIGATION PROCEDURE TO THE EFFECT THAT AN ABSOLUTE BAN ON ADDITIVES IS INAPPROPRIATE SHOW THAT IT INTENDED ITS ACTION TO COVER THAT PROHIBITION . 23 IN THE SECOND PLACE, IT MUST BE OBSERVED THAT, FROM THE START OF THE PROCEDURE, THE GERMAN GOVERNMENT ITSELF RAISED IN ITS DEFENCE MAINLY ARGUMENTS CONCERNING ADDITIVES AND THE PROTECTION OF PUBLIC HEALTH, WHICH SHOWS THAT IT UNDERSTOOD AND ACKNOWLEDGED THAT THE SUBJECT-MATTER OF THE PROCEEDINGS ALSO COVERED THE ABSOLUTE BAN ON THE USE OF ADDITIVES AND MAKES IT CLEAR THAT IT HAS NOT BEEN DENIED THE RIGHT TO A FAIR HEARING IN THAT RESPECT . THE PROHIBITION ON THE MARKETING UNDER THE DESIGNATION "BIER" OF BEERS NOT COMPLYING WITH THE REQUIREMENTS OF ARTICLE 9 OF THE BIERSTEUERGESETZ 24 IT MUST BE NOTED IN THE FIRST PLACE THAT THE PROVISION ON THE MANUFACTURE OF BEER SET OUT IN ARTICLE 9 OF THE BIERSTEUERGESETZ CANNOT IN ITSELF CONSTITUTE A MEASURE HAVING AN EFFECT EQUIVALENT TO A QUANTITATIVE RESTRICTION ON IMPORTS CONTRARY TO ARTICLE 30 OF THE EEC TREATY, SINCE IT APPLIES ONLY TO BREWERIES IN THE FEDERAL REPUBLIC OF GERMANY . ARTICLE 9 OF THE BIERSTEUERGESETZ IS AT ISSUE IN THIS CASE ONLY IN SO FAR AS ARTICLE 10 OF THAT LAW, WHICH COVERS BOTH PRODUCTS IMPORTED FROM OTHER MEMBER STATES AND PRODUCTS MANUFACTURED IN GERMANY, REFERS THERETO IN ORDER TO DETERMINE THE BEVERAGES WHICH MAY BE MARKETED UNDER THE DESIGNATION "BIER ". 25 AS FAR AS THOSE RULES ON DESIGNATION ARE CONCERNED, THE COMMISSION CONCEDES THAT AS LONG AS HARMONIZATION HAS NOT BEEN ACHIEVED AT COMMUNITY LEVEL THE MEMBER STATES HAVE THE POWER IN PRINCIPLE TO LAY DOWN RULES GOVERNING THE MANUFACTURE, THE COMPOSITION AND THE MARKETING OF BEVERAGES . IT STRESSES, HOWEVER, THAT RULES WHICH, LIKE ARTICLE 10 OF THE BIERSTEUERGESETZ, PROHIBIT THE USE OF A GENERIC DESIGNATION FOR THE MARKETING OF PRODUCTS MANUFACTURED PARTLY FROM RAW MATERIALS, SUCH AS RICE AND MAIZE, OTHER THAN THOSE WHOSE USE IS PRESCRIBED IN THE NATIONAL TERRITORY ARE CONTRARY TO COMMUNITY LAW . IN ANY EVENT, SUCH RULES GO BEYOND WHAT IS NECESSARY IN ORDER TO PROTECT THE GERMAN CONSUMER, SINCE THAT COULD BE DONE SIMPLY BY MEANS OF LABELLING OR NOTICES . THOSE RULES THEREFORE CONSTITUTE AN IMPEDIMENT TO TRADE CONTRARY TO ARTICLE 30 OF THE EEC TREATY . 26 THE GERMAN GOVERNMENT HAS FIRST SOUGHT TO JUSTIFY ITS RULES ON PUBLIC-HEALTH GROUNDS . IT MAINTAINS THAT THE USE OF RAW MATERIALS OTHER THAN THOSE PERMITTED BY ARTICLE 9 OF THE BIERSTEUERGESETZ WOULD INEVITABLY ENTAIL THE USE OF ADDITIVES . HOWEVER, AT THE HEARING THE GERMAN GOVERNMENT CONCEDED THAT ARTICLE 10 OF THE BIERSTEUERGESETZ, WHICH IS MERELY A RULE ON DESIGNATION, WAS EXCLUSIVELY INTENDED TO PROTECT CONSUMERS . IN ITS VIEW, CONSUMERS ASSOCIATE THE DESIGNATION "BIER" WITH A BEVERAGE MANUFACTURED FROM ONLY THE RAW MATERIALS LISTED IN ARTICLE 9 OF THE BIERSTEUERGESETZ . CONSEQUENTLY, IT IS NECESSARY TO PREVENT THEM FROM BEING MISLED AS TO THE NATURE OF THE PRODUCT BY BEING LED TO BELIEVE THAT A BEVERAGE CALLED "BIER" COMPLIES WITH THE REINHEITSGEBOT WHEN THAT IS NOT THE CASE . THE GERMAN GOVERNMENT MAINTAINS THAT ITS RULES ARE NOT PROTECTIONIST IN AIM . IT STRESSES IN THAT REGARD THAT THE RAW MATERIALS WHOSE USE IS SPECIFIED IN ARTICLE 9 ( 1 ) AND ( 2 ) OF THE BIERSTEUERGESETZ ARE NOT NECESSARILY OF NATIONAL ORIGIN . ANY TRADER MARKETING PRODUCTS SATISFYING THE PRESCRIBED RULES IS FREE TO USE THE DESIGNATION "BIER" AND THOSE RULES CAN READILY BE COMPLIED WITH OUTSIDE THE FEDERAL REPUBLIC OF GERMANY . 27 ACCORDING TO A CONSISTENT LINE OF DECISIONS OF THE COURT ( ABOVE ALL, THE JUDGMENT OF 11 JULY 1974 IN CASE 8/74 PROCUREUR DU ROI V DASSONVILLE (( 1974 )) ECR 837 ) THE PROHIBITION OF MEASURES HAVING AN EFFECT EQUIVALENT TO QUANTITATIVE RESTRICTIONS UNDER ARTICLE 30 OF THE EEC TREATY COVERS "ALL TRADING RULES ENACTED BY MEMBER STATES WHICH ARE CAPABLE OF HINDERING, DIRECTLY OR INDIRECTLY, ACTUALLY OR POTENTIALLY, INTRA-COMMUNITY TRADE ". 28 THE COURT HAS ALSO CONSISTENTLY HELD ( IN PARTICULAR IN THE JUDGMENT OF 20 FEBRUARY 1979 IN CASE 120/78 REWE-ZENTRAL AG V BUNDESMONOPOLVERWALTUNG (( 1979 )) ECR 649, AND THE JUDGMENT OF 10 NOVEMBER 1982 IN CASE 261/81 WALTER RAU LEBENSMITTELWERKE V DE SMEDT (( 1982 )) ECR 3961 ) THAT "IN THE ABSENCE OF COMMON RULES RELATING TO THE MARKETING OF THE PRODUCTS CONCERNED, OBSTACLES TO FREE MOVEMENT WITHIN THE COMMUNITY RESULTING FROM DISPARITIES BETWEEN THE NATIONAL LAWS MUST BE ACCEPTED IN SO FAR AS SUCH RULES, APPLICABLE TO DOMESTIC AND TO IMPORTED PRODUCTS WITHOUT DISTINCTION, MAY BE RECOGNIZED AS BEING NECESSARY IN ORDER TO SATISFY MANDATORY REQUIREMENTS RELATING INTER ALIA TO CONSUMER PROTECTION . IT IS ALSO NECESSARY FOR SUCH RULES TO BE PROPORTIONATE TO THE AIM IN VIEW . IF A MEMBER STATE HAS A CHOICE BETWEEN VARIOUS MEASURES TO ATTAIN THE SAME OBJECTIVE IT SHOULD CHOOSE THE MEANS WHICH LEAST RESTRICTS THE FREE MOVEMENT OF GOODS ". 29 IT IS NOT CONTESTED THAT THE APPLICATION OF ARTICLE 10 OF THE BIERSTEUERGESETZ TO BEERS FROM OTHER MEMBER STATES IN WHOSE MANUFACTURE RAW MATERIALS OTHER THAN MALTED BARLEY HAVE BEEN LAWFULLY USED, IN PARTICULAR RICE AND MAIZE, IS LIABLE TO CONSTITUTE AN OBSTACLE TO THEIR IMPORTATION INTO THE FEDERAL REPUBLIC OF GERMANY . 30 ACCORDINGLY, IT MUST BE ESTABLISHED WHETHER THE APPLICATION OF THAT PROVISION MAY BE JUSTIFIED BY IMPERATIVE REQUIREMENTS RELATING TO CONSUMER PROTECTION . 31 THE GERMAN GOVERNMENT' S ARGUMENT THAT ARTICLE 10 OF THE BIERSTEUERGESETZ IS ESSENTIAL IN ORDER TO PROTECT GERMAN CONSUMERS BECAUSE, IN THEIR MINDS, THE DESIGNATION "BIER" IS INSEPARABLY LINKED TO THE BEVERAGE MANUFACTURED SOLELY FROM THE INGREDIENTS LAID DOWN IN ARTICLE 9 OF THE BIERSTEUERGESETZ MUST BE REJECTED . 32 FIRSTLY, CONSUMERS' CONCEPTIONS WHICH VARY FROM ONE MEMBER STATE TO THE OTHER ARE ALSO LIKELY TO EVOLVE IN THE COURSE OF TIME WITHIN A MEMBER STATE . THE ESTABLISHMENT OF THE COMMON MARKET IS, IT SHOULD BE ADDED, ONE OF THE FACTORS THAT MAY PLAY A MAJOR CONTRIBUTORY ROLE IN THAT DEVELOPMENT . WHEREAS RULES PROTECTING CONSUMERS AGAINST MISLEADING PRACTICES ENABLE SUCH A DEVELOPMENT TO BE TAKEN INTO ACCOUNT, LEGISLATION OF THE KIND CONTAINED IN ARTICLE 10 OF THE BIERSTEUERGESETZ PREVENTS IT FROM TAKING PLACE . AS THE COURT HAS ALREADY HELD IN ANOTHER CONTEXT ( JUDGMENT OF 27 FEBRUARY 1980 IN CASE 170/78 COMMISSION V UNITED KINGDOM (( 1980 )) ECR 417 ), THE LEGISLATION OF A MEMBER STATE MUST NOT "CRYSTALLIZE GIVEN CONSUMER HABITS SO AS TO CONSOLIDATE AN ADVANTAGE ACQUIRED BY NATIONAL INDUSTRIES CONCERNED TO COMPLY WITH THEM ". 33 SECONDLY, IN THE OTHER MEMBER STATES OF THE COMMUNITY THE DESIGNATIONS CORRESPONDING TO THE GERMAN DESIGNATION "BIER" ARE GENERIC DESIGNATIONS FOR A FERMENTED BEVERAGE MANUFACTURED FROM MALTED BARLEY, WHETHER MALTED BARLEY ON ITS OWN OR WITH THE ADDITION OF RICE OR MAIZE . THE SAME APPROACH IS TAKEN IN COMMUNITY LAW AS AN BE SEEN FROM HEADING NO 22.03 OF THE COMMON CUSTOMS TARIFF . THE GERMAN LEGISLATURE ITSELF UTILIZES THE DESIGNATION "BIER" IN THAT WAY IN ARTICLE 9 ( 7 ) AND ( 8 ) OF THE BIERSTEUERGESETZ IN ORDER TO REFER TO BEVERAGES NOT COMPLYING WITH THE MANUFACTURING RULES LAID DOWN IN ARTICLE 9 ( 1 ) AND ( 2 ). 34 THE GERMAN DESIGNATION "BIER" AND ITS EQUIVALENTS IN THE LANGUAGES OF THE OTHER MEMBER STATES OF THE COMMUNITY MAY THEREFORE NOT BE RESTRICTED TO BEERS MANUFACTURED IN ACCORDANCE WITH THE RULES IN FORCE IN THE FEDERAL REPUBLIC OF GERMANY . 35 IT IS ADMITTEDLY LEGITIMATE TO SEEK TO ENABLE CONSUMERS WHO ATTRIBUTE SPECIFIC QUALITIES TO BEERS MANUFACTURED FROM PARTICULAR RAW MATERIALS TO MAKE THEIR CHOICE IN THE LIGHT OF THAT CONSIDERATION . HOWEVER, AS THE COURT HAS ALREADY EMPHASIZED ( JUDGMENT OF 9 DECEMBER 1981 IN CASE 193/80 COMMISSION V ITALY (( 1981 )) ECR 3019 ), THAT POSSIBILITY MAY BE ENSURED BY MEANS WHICH DO NOT PREVENT THE IMPORTATION OF PRODUCTS WHICH HAVE BEEN LAWFULLY MANUFACTURED AND MARKETED IN OTHER MEMBER STATES AND, IN PARTICULAR, "BY THE COMPULSORY AFFIXING OF SUITABLE LABELS GIVING THE NATURE OF THE PRODUCT SOLD ". BY INDICATING THE RAW MATERIALS UTILIZED IN THE MANUFACTURE OF BEER "SUCH A COURSE WOULD ENABLE THE CONSUMER TO MAKE HIS CHOICE IN FULL KNOWLEDGE OF THE FACTS AND WOULD GUARANTEE TRANSPARENCY IN TRADING AND IN OFFERS TO THE PUBLIC ". IT MUST BE ADDED THAT SUCH A SYSTEM OF MANDATORY CONSUMER INFORMATION MUST NOT ENTAIL NEGATIVE ASSESSMENTS FOR BEERS NOT COMPLYING WITH THE REQUIREMENTS OF ARTICLE 9 OF THE BIERSTEUERGESETZ . 36 CONTRARY TO THE GERMAN GOVERNMENT' S VIEW, SUCH A SYSTEM OF CONSUMER INFORMATION MAY OPERATE PERFECTLY WELL EVEN IN THE CASE OF A PRODUCT WHICH, LIKE BEER, IS NOT NECESSARILY SUPPLIED TO CONSUMERS IN BOTTLES OR IN CANS CAPABLE OF BEARING THE APPROPRIATE DETAILS . THAT IS BORNE OUT, ONCE AGAIN, BY THE GERMAN LEGISLATION ITSELF . ARTICLE 26 ( 1 ) AND ( 2 ) OF THE AFOREMENTIONED REGULATION IMPLEMENTING THE BIERSTEUERGESETZ PROVIDES FOR A SYSTEM OF CONSUMER INFORMATION IN RESPECT OF CERTAIN BEERS, EVEN WHERE THOSE BEERS ARE SOLD ON DRAUGHT, WHEN THE REQUISITE INFORMATION MUST APPEAR ON THE CASKS OR THE BEER TAPS . 37 IT FOLLOWS FROM THE FOREGOING THAT BY APPLYING THE RULES ON DESIGNATION IN ARTICLE 10 OF THE BIERSTEUERGESETZ TO BEERS IMPORTED FROM OTHER MEMBER STATES WHICH WERE MANUFACTURED AND MARKETED LAWFULLY IN THOSE STATES THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 OF THE EEC TREATY . THE ABSOLUTE BAN ON THE MARKETING OF BEERS CONTAINING ADDITIVES 38 IN THE COMMISSION' S OPINION THE ABSOLUTE BAN ON THE MARKETING OF BEERS CONTAINING ADDITIVES CANNOT BE JUSTIFIED ON PUBLIC-HEALTH GROUNDS . IT MAINTAINS THAT THE OTHER MEMBER STATES CONTROL VERY STRICTLY THE UTILIZATION OF ADDITIVES IN FOODSTUFFS AND DO NOT AUTHORIZE THE USE OF ANY GIVEN ADDITIVE UNTIL THOROUGH TESTS HAVE ESTABLISHED THAT IT IS HARMLESS . IN THE COMMISSION' S VIEW, THERE SHOULD BE A PRESUMPTION THAT BEERS MANUFACTURED IN OTHER MEMBER STATES WHICH CONTAIN ADDITIVES AUTHORIZED THERE REPRESENT NO DANGER TO PUBLIC HEALTH . THE COMMISSION ARGUES THAT IF THE FEDERAL REPUBLIC OF GERMANY WISHES TO OPPOSE THE IMPORTATION OF SUCH BEERS THEN IT BEARS THE ONUS OF PROVING THAT SUCH BEERS ARE A DANGER TO PUBLIC HEALTH . THE COMMISSION CONSIDERS THAT IN THIS CASE THAT BURDEN OF PROOF HAS NOT BEEN DISCHARGED . IN ANY EVENT, THE RULES ON ADDITIVES APPLYING TO BEER IN THE FEDERAL REPUBLIC OF GERMANY ARE DISPROPORTIONATE IN SO FAR AS THEY COMPLETELY PRECLUDE THE USE OF ADDITIVES WHEREAS THE RULES FOR OTHER BEVERAGES, SUCH AS SOFT DRINKS, ARE MUCH MORE FLEXIBLE . 39 FOR ITS PART, THE GERMAN GOVERNMENT CONSIDERS THAT IN VIEW OF THE DANGERS RESULTING FROM THE UTILIZATION OF ADDITIVES WHOSE LONG-TERM EFFECTS ARE NOT YET KNOWN AND IN PARTICULAR OF THE RISKS RESULTING FROM THE ACCUMULATION OF ADDITIVES IN THE ORGANISM AND THEIR INTERACTION WITH OTHER SUBSTANCES, SUCH AS ALCOHOL, IT IS NECESSARY TO MINIMIZE THE QUANTITY OF ADDITIVES INGESTED . SINCE BEER IS A FOODSTUFF OF WHICH LARGE QUANTITIES ARE CONSUMED IN GERMANY, THE GERMAN GOVERNMENT CONSIDERS THAT IT IS PARTICULARLY DESIRABLE TO PROHIBIT THE USE OF ANY ADDITIVE IN ITS MANUFACTURE, ESPECIALLY IN SO FAR AS THE USE OF ADDITIVES IS NOT TECHNOLOGICALLY NECESSARY AND CAN BE AVOIDED IF ONLY THE INGREDIENTS LAID DOWN IN THE BIERSTEUERGESETZ ARE USED . IN THOSE CIRCUMSTANCES, THE GERMAN RULES ON ADDITIVES IN BEER ARE FULLY JUSTIFIED BY THE NEED TO SAFEGUARD PUBLIC HEALTH AND DO NOT INFRINGE THE PRINCIPLE OF PROPORTIONALITY . 40 IT IS NOT CONTESTED THAT THE PROHIBITION ON THE MARKETING OF BEERS CONTAINING ADDITIVES CONSTITUTES A BARRIER TO THE IMPORTATION FROM OTHER MEMBER STATES OF BEERS CONTAINING ADDITIVES AUTHORIZED IN THOSE STATES, AND IS TO THAT EXTENT COVERED BY ARTICLE 30 OF THE EEC TREATY . HOWEVER, IT MUST BE ASCERTAINED WHETHER IT IS POSSIBLE TO JUSTIFY THAT PROHIBITION UNDER ARTICLE 36 OF THE TREATY ON GROUNDS OF THE PROTECTION OF HUMAN HEALTH . 41 THE COURT HAS CONSISTENTLY HELD ( IN PARTICULAR IN THE JUDGMENT OF 14 JULY 1983 IN CASE 174/82 SANDOZ BV (( 1983 )) ECR 2445 ) THAT "IN SO FAR AS THERE ARE UNCERTAINTIES AT THE PRESENT STATE OF SCIENTIFIC RESEARCH IT IS FOR THE MEMBER STATES, IN THE ABSENCE OF HARMONIZATION, TO DECIDE WHAT DEGREE OF PROTECTION OF THE HEALTH AND LIFE OF HUMANS THEY INTEND TO ASSURE, HAVING REGARD HOWEVER TO THE REQUIREMENTS OF THE FREE MOVEMENT OF GOODS WITHIN THE COMMUNITY ". 42 AS MAY ALSO BE SEEN FROM THE DECISIONS OF THE COURT ( AND ESPECIALLY THE JUDGMENT OF 14 JULY 1983 IN THE SANDOZ CASE, CITED ABOVE, THE JUDGMENT OF 10 DECEMBER 1985 IN CASE 247/84 MOTTE (( 1985 )) ECR 3887, AND THE JUDGMENT OF 6 MAY 1986 IN CASE 304/84 MINISTERE PUBLIC V MULLER AND OTHERS (( 1986 )) ECR 1511 ), IN SUCH CIRCUMSTANCES COMMUNITY LAW DOES NOT PRECLUDE THE ADOPTION BY THE MEMBER STATES OF LEGISLATION WHEREBY THE USE OF ADDITIVES IS SUBJECTED TO PRIOR AUTHORIZATION GRANTED BY A MEASURE OF GENERAL APPLICATION FOR SPECIFIC ADDITIVES, IN RESPECT OF ALL PRODUCTS, FOR CERTAIN PRODUCTS ONLY OR FOR CERTAIN USES . SUCH LEGISLATION MEETS A GENUINE NEED OF HEALTH POLICY, NAMELY THAT OF RESTRICTING THE UNCONTROLLED CONSUMPTION OF FOOD ADDITIVES . 43 HOWEVER, THE APPLICATION TO IMPORTED PRODUCTS OF PROHIBITIONS ON MARKETING PRODUCTS CONTAINING ADDITIVES WHICH ARE AUTHORIZED IN THE MEMBER STATE OF PRODUCTION BUT PROHIBITED IN THE MEMBER STATE OF IMPORTATION IS PERMISSIBLE ONLY IN SO FAR AS IT COMPLIES WITH THE REQUIREMENTS OF ARTICLE 36 OF THE TREATY AS IT HAS BEEN INTERPRETED BY THE COURT . 44 IT MUST BE BORNE IN MIND, IN THE FIRST PLACE, THAT IN ITS JUDGMENTS IN THE SANDOZ, MOTTE AND MULLER CASES, CITED ABOVE, THE COURT INFERRED FROM THE PRINCIPLE OF PROPORTIONALITY UNDERLYING THE LAST SENTENCE OF ARTICLE 36 OF THE TREATY THAT PROHIBITIONS ON THE MARKETING OF PRODUCTS CONTAINING ADDITIVES AUTHORIZED IN THE MEMBER STATE OF PRODUCTION BUT PROHIBITED IN THE MEMBER STATE OF IMPORTATION MUST BE RESTRICTED TO WHAT IS ACTUALLY NECESSARY TO SECURE THE PROTECTION OF PUBLIC HEALTH . THE COURT ALSO CONCLUDED THAT THE USE OF A SPECIFIC ADDITIVE WHICH IS AUTHORIZED IN ANOTHER MEMBER STATE MUST BE AUTHORIZED IN THE CASE OF A PRODUCT IMPORTED FROM THAT MEMBER STATE WHERE, IN VIEW, ON THE ONE HAND, OF THE FINDINGS OF INTERNATIONAL SCIENTIFIC RESEARCH, AND IN PARTICULAR OF THE WORK OF THE COMMUNITY' S SCIENTIFIC COMMITTEE FOR FOOD, THE CODEX ALIMENTARIUS COMMITTEE OF THE FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS ( FAO ) AND THE WORLD HEALTH ORGANIZATION, AND, ON THE OTHER HAND, OF THE EATING HABITS PREVAILING IN THE IMPORTING MEMBER STATE, THE ADDITIVE IN QUESTION DOES NOT PRESENT A RISK TO PUBLIC HEALTH AND MEETS A REAL NEED, ESPECIALLY A TECHNICAL ONE . 45 SECONDLY, IT SHOULD BE REMEMBERED THAT, AS THE COURT HELD IN ITS JUDGMENT OF 6 MAY 1986 IN THE MULLER CASE, CITED ABOVE, BY VIRTUE OF THE PRINCIPLE OF PROPORTIONALITY, TRADERS MUST ALSO BE ABLE TO APPLY, UNDER A PROCEDURE WHICH IS EASILY ACCESSIBLE TO THEM AND CAN BE CONCLUDED WITHIN A REASONABLE TIME, FOR THE USE OF SPECIFIC ADDITIVES TO BE AUTHORIZED BY A MEASURE OF GENERAL APPLICATION . 46 IT SHOULD BE POINTED OUT THAT IT MUST BE OPEN TO TRADERS TO CHALLENGE BEFORE THE COURTS AN UNJUSTIFIED FAILURE TO GRANT AUTHORIZATION . WITHOUT PREJUDICE TO THE RIGHT OF THE COMPETENT NATIONAL AUTHORITIES OF THE IMPORTING MEMBER STATE TO ASK TRADERS TO PRODUCE THE INFORMATION IN THEIR POSSESSION WHICH MAY BE USEFUL FOR THE PURPOSE OF ASSESSING THE FACTS, IT IS FOR THOSE AUTHORITIES TO DEMONSTRATE, AS THE COURT HELD IN ITS JUDGMENT OF 6 MAY 1986 IN THE MULLER CASE, CITED ABOVE, THAT THE PROHIBITION IS JUSTIFIED ON GROUNDS RELATING TO THE PROTECTION OF THE HEALTH OF ITS POPULATION . 47 IT MUST BE OBSERVED THAT THE GERMAN RULES ON ADDITIVES APPLICABLE TO BEER RESULT IN THE EXCLUSION OF ALL THE ADDITIVES AUTHORIZED IN THE OTHER MEMBER STATES AND NOT THE EXCLUSION OF JUST SOME OF THEM FOR WHICH THERE IS CONCRETE JUSTIFICATION BY REASON OF THE RISKS WHICH THEY INVOLVE IN VIEW OF THE EATING HABITS OF THE GERMAN POPULATION; MOREOVER THOSE RULES DO NOT LAY DOWN ANY PROCEDURE WHEREBY TRADERS CAN OBTAIN AUTHORIZATION FOR THE USE OF A SPECIFIC ADDITIVE IN THE MANUFACTURE OF BEER BY MEANS OF A MEASURE OF GENERAL APPLICATION . 48 AS REGARDS MORE SPECIFICALLY THE HARMFULNESS OF ADDITIVES, THE GERMAN GOVERNMENT, CITING EXPERTS' REPORTS, HAS REFERRED TO THE RISKS INHERENT IN THE INGESTION OF ADDITIVES IN GENERAL . IT MAINTAINS THAT IT IS IMPORTANT, FOR REASONS OF GENERAL PREVENTIVE HEALTH PROTECTION, TO MINIMIZE THE QUANTITY OF ADDITIVES INGESTED, AND THAT IT IS PARTICULARLY ADVISABLE TO PROHIBIT ALTOGETHER THEIR USE IN THE MANUFACTURE OF BEER, A FOODSTUFF CONSUMED IN CONSIDERABLE QUANTITIES BY THE GERMAN POPULATION . 49 HOWEVER, IT APPEARS FROM THE TABLES OF ADDITIVES AUTHORIZED FOR USE IN THE VARIOUS FOODSTUFFS SUBMITTED BY THE GERMAN GOVERNMENT ITSELF THAT SOME OF THE ADDITIVES AUTHORIZED IN OTHER MEMBER STATES FOR USE IN THE MANUFACTURE OF BEER ARE ALSO AUTHORIZED UNDER THE GERMAN RULES, IN PARTICULAR THE REGULATION ON ADDITIVES, FOR USE IN THE MANUFACTURE OF ALL, OR VIRTUALLY ALL, BEVERAGES . MERE REFERENCE TO THE POTENTIAL RISKS OF THE INGESTION OF ADDITIVES IN GENERAL AND TO THE FACT THAT BEER IS A FOODSTUFF CONSUMED IN LARGE QUANTITIES DOES NOT SUFFICE TO JUSTIFY THE IMPOSITION OF STRICTER RULES IN THE CASE OF BEER . 50 AS REGARDS THE NEED, AND IN PARTICULAR THE TECHNOLOGICAL NEED, FOR ADDITIVES, THE GERMAN GOVERNMENT ARGUES THAT THERE IS NO NEED FOR ADDITIVES IF BEER IS MANUFACTURED IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 9 OF THE BIERSTEUERGESETZ . 51 IT MUST BE EMPHASIZED THAT MERE REFERENCE TO THE FACT THAT BEER CAN BE MANUFACTURED WITHOUT ADDITIVES IF IT IS MADE FROM ONLY THE RAW MATERIALS PRESCRIBED IN THE FEDERAL REPUBLIC OF GERMANY DOES NOT SUFFICE TO PRECLUDE THE POSSIBILITY THAT SOME ADDITIVES MAY MEET A TECHNOLOGICAL NEED . SUCH AN INTERPRETATION OF THE CONCEPT OF TECHNOLOGICAL NEED, WHICH RESULTS IN FAVOURING NATIONAL PRODUCTION METHODS, CONSTITUTES A DISGUISED MEANS OF RESTRICTING TRADE BETWEEN MEMBER STATES . 52 THE CONCEPT OF TECHNOLOGICAL NEED MUST BE ASSESSED IN THE LIGHT OF THE RAW MATERIALS UTILIZED AND BEARING IN MIND THE ASSESSMENT MADE BY THE AUTHORITIES OF THE MEMBER STATE WHERE THE PRODUCT WAS LAWFULLY MANUFACTURED AND MARKETED . ACCOUNT MUST ALSO BE TAKEN OF THE FINDINGS OF INTERNATIONAL SCIENTIFIC RESEARCH AND IN PARTICULAR THE WORK OF THE COMMUNITY' S SCIENTIFIC COMMITTEE FOR FOOD, THE CODEX ALIMENTARIUS COMMITTEE OF THE FAO AND THE WORLD HEALTH ORGANIZATION . 53 CONSEQUENTLY, IN SO FAR AS THE GERMAN RULES ON ADDITIVES IN BEER ENTAIL A GENERAL BAN ON ADDITIVES, THEIR APPLICATION TO BEERS IMPORTED FROM OTHER MEMBER STATES IS CONTRARY TO THE REQUIREMENTS OF COMMUNITY LAW AS LAID DOWN IN THE CASE-LAW OF THE COURT, SINCE THAT PROHIBITION IS CONTRARY TO THE PRINCIPLE OF PROPORTIONALITY AND IS THEREFORE NOT COVERED BY THE EXCEPTION PROVIDED FOR IN ARTICLE 36 OF THE EEC TREATY . 54 IN VIEW OF THE FOREGOING CONSIDERATIONS IT MUST BE HELD THAT BY PROHIBITING THE MARKETING OF BEERS LAWFULLY MANUFACTURED AND MARKETED IN ANOTHER MEMBER STATE IF THEY DO NOT COMPLY WITH ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ, THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 OF THE EEC TREATY . Decision on costs COSTS 55 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE FEDERAL REPUBLIC OF GERMANY HAS FAILED IN ITS SUBMISSIONS, IT MUST BE ORDERED TO PAY THE COSTS . Operative part ON THOSE GROUNDS, THE COURT HEREBY : ( 1 ) DECLARES THAT, BY PROHIBITING THE MARKETING OF BEERS LAWFULLY MANUFACTURED AND MARKETED IN ANOTHER MEMBER STATE IF THEY DO NOT COMPLY WITH ARTICLES 9 AND 10 OF THE BIERSTEUERGESETZ, THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 OF THE EEC TREATY; ( 2 ) ORDERS THE FEDERAL REPUBLIC OF GERMANY TO PAY THE COSTS .

COURT OF APPEAL FOR ONTARIO CITATION: Bilodeau (Re), 2021 ONCA 198 DATE:  20210331 DOCKET: C68631 Watt, Hoy and Nordheimer JJ.A. IN THE MATTER OF:  Matthew Bilodeau AN APPEAL UNDER PART XX.1 OF THE CODE Stephen F. Gehl, for the appellant Rebecca Schwartz, for the respondent, The Attorney General of Ontario Julie A. Zamprogna Balles, for the respondent, The Person in Charge of the Southwest Centre for Forensic Mental Health Care St. Joseph’s Health Care London Heard: March 26, 2021 by video conference On appeal from the disposition of the Ontario Review Board, dated July 16, 2020, with reasons dated August 4, 2020. REASONS FOR DECISION [1] Mr. Bilodeau appeals the disposition of the Ontario Review Board, continuing his conditional discharge but reducing his obligation to report to the Hospital to not less than two times per month. [2] Counsel for Mr. Bilodeau argues that the Board’s finding that he continues to pose a significant threat to the safety of the public was unreasonable and seeks an absolute discharge. In particular, he argues that the Board’s finding that he poses a significant threat was speculative, not grounded in the evidence, and failed to consider that  his only incident of violence was the index offence, he has been compliant with medication for eight years, and he has voluntarily returned to the Hospital when symptomatic. [3] We are not persuaded that there is any basis for this court to intervene. The Board’s conclusion was reasonable and is grounded in the evidence. The path to its conclusion is clear. The Board’s decision reflected “an internally coherent and rational chain of analysis” that was “justified in relation to the facts and law”: Canada (Minister of Citizenship and Immigration) v. Vavilov , 2019 SCC 65, 441 D.L.R. (4th) 1, at paras. 83, 85. [4] The Board reviewed and considered the evidence of Mr. Bilodeau’s treating physician, Dr. Ugwunze, and the Hospital Report. The evidence on which the Board’s disposition rests includes the following. [5] On April 3, 2012, Mr. Bilodeau was found not criminally responsible on account of mental disorder on two charges of attempt murder, after stabbing his father with a large butcher knife and stabbing his mother in the chest with a smaller knife. The offence occurred less than two weeks after he had stopped his medication. [6] Mr. Bilodeau is diagnosed with schizoaffective disorder, substance use disorder (in remission) and anxiety disorder NOS. [7] At the time of the disposition under appeal, Mr. Bilodeau lived alone in a one -bedroom apartment. However, he continued to suffer from active psychotic symptoms and continues to require oversight. Dr. Ugwunze opined that should Mr. Bilodeau miss two doses of any of the three anti-psychotic medications he takes, his mental state would deteriorate significantly within 48 hours. Further, Dr. Ugwunze’s evidence was that the therapeutic level of one of his anti-psychotic medications, clozapine, is affected by his use of cigarettes and, as a result, his medication levels require monitoring to ensure that they remain within the therapeutic range. [8] Mr. Bilodeau has made progress and, in the year under review, steps were made to transfer Mr. Bilodeau’s care from a forensic outreach team to an Assertive Community Treatment Team (ACTT).  But as a result of restrictions arising from the COVID-19 pandemic, a therapeutic relationship had not developed by the time of the Board hearing. Dr Ugwunze explained that a developed therapeutic relationship was necessary to manage Mr. Bilodeau’s medication, given his attempts to negotiate reductions and question the authenticity of his medication. Mr. Bilodeau struggles to adjust to change and it takes him a long time to build therapeutic trust. [9] Mr. Ugwunze testified that, if given an absolute discharge at this time, Mr. Bilodeau’s risk of violent re-offending would increase to at least moderate and might actually be higher. [10] The Board found that “the evidence before us is quite clear and given the severity of the index offence and [Mr. Bilodeau’s] propensity for extreme unprovoked and unpredictable violence it is imperative that he needs to be actively monitored by a therapeutic team that knows him well”. [11] The Board did not misapprehend that there was only one incident of violence. While there was only one incident of violence, it was extreme and unprovoked. The risk of violence if Mr. Bilodeau does not maintain therapeutic levels of medication is clear. In its reasons, the Board noted the evidence of medication compliance under the forensic outpatient team, while also noting Dr. Ugwunze’s evidence that, while compliant, Mr. Bilodeau has, at times, expressed not wanting to take his medications. The Board’s review of the evidence included that in July 2018, and on prior occasions, Mr. Bilodeau returned to the hospital at his own request and that Mr. Bilodeau has been adhering to his relapse prevention program as best he can. But the Board also considered the risk that a transition, such as to the ACTT, poses. [12] Contrary to counsel for Mr. Bilodeau’s assertion, the Board did not signal that Mr. Bilodeau would always present a significant threat to the safety of the public, given the nature of his mental illness and the gravity of the index offence. Rather, the Board accepted the evidence of Dr. Ugwunze of the need for a strong therapeutic relationship to manage that risk and that Mr. Bilodeau had not yet developed such a relationship outside of the forensic team. [13] Accordingly, the appeal is dismissed. “David Watt J.A.” “Alexandra Hoy J.A.” “I.V.B. Nordheimer J.A.”

The Honourable Mr Justice Stuart-Smith: The OCENSA pipeline was constructed in and from late 1995 and passes through parts of Colombia that have been and remain extremely dangerous because of the activities of criminal gangs connected with the drugs trade. The pipeline also passes through a significant number of different farms owned by Colombian citizens. Those responsible for the installation of the pipeline entered into agreements with the landowners which included provision for compensation for damage that might be caused. However, in the wake of the construction of the pipeline many landowners considered that they had not been adequately compensated for the loss and damage it had caused to their land and livelihoods. In circumstances that do not matter for present purposes, the Colombian claimants came to be represented by English lawyers of the highest calibre and experience, Messrs Leigh Day ["Leigh Day"], and the decision was taken to bring claims in England against the present Defendant, an offshoot of BP that had been involved in the construction of the pipeline. The Defendant also instructed lawyers of the highest calibre and expertise, Messrs Freshfields Bruckhaus Deringer LLP ["Freshfields"]. A first group of claimants brought claims that were settled by mediation in about 2006. The present series of claims were intimated by a letter from Leigh Day to the Defendant on 23 May 2007. Proceedings were issued on 29 January 2008. A GLO was made on 24 September 2008. From then until the summer of 2013 the litigation was managed in the Queen's Bench Division by the Senior Master. There are now ten Lead Claimants chosen from a cohort of over fifty. The Lead Claimants' properties range from 13[1] to 338[2] hectares, most being less than 100 hectares. It is common ground that, subject to proof of liability, the substantive law of Colombia determines what heads of damage may be recovered while the procedural law of England determines the assessment and quantification of those heads of damage: see Harding v Wealands [2006] UKHL 32. In mid-2012 the Claimants served Revised Schedules of Loss and Damage for each of the Lead Claimants. Under the heading "General Damages", the schedules included claims for "Cost of Reinstatement", "Moral Damages" and "Loss of Amenity/Quality of Life". The Defendant accepted that the pleading of claims for Moral Damages and Loss of Amenity/Quality of Life was adequate and that they could be pursued; but it objected to the admission of the proposed claim for Costs of Reinstatement. In December 2012 the Senior Master gave judgment directing that the litigation should be transferred to the TCC and refusing permission to the Claimants to advance the claim based upon the cost of reinstating their land ["the 2012 Judgment"]. That judgment forms an integral part of the context for the present applications. It should be read by anyone who wishes to follow the intended sense of this judgment. The essence of the Senior Master's reasoning was that the claim for reinstatement costs had not previously been intimated and was being brought too late for it to be accommodated without irremediable prejudice being caused to the Defendant. His judgment was not appealed by the Claimants, so that the parties are bound by the decision to exclude the claim based upon the cost of reinstating their land. I do not consider myself formally bound by the narrative and reasoning contained in the 2012 Judgment, though it is entitled to considerable weight given the Senior Master's detailed personal knowledge of the history of the proceedings. However, having reviewed it for the purposes of the present applications, I endorse and adopt the history of the proceedings as set out in the 2012 Judgment and endorse the reasoning that the Senior Master gave in reaching his conclusion that the claim based upon reinstatement costs should not be permitted to proceed. On 15 February 2013, after giving his judgment on reinstatement costs, the Senior Master directed that the Lead Claimants should provide the Defendant "with a written statement which sets out their case as to how they will contend for general damages in respect of damage to their properties". Pursuant to that order, the Lead Claimants first served a short statement on 8 March 2013 and then served Further and Better Particulars of the Claims for General Damages dated 24 April 2013 ["the F&BPs"]. The F&BPs run to 43 pages of which 11 may be described as generic and 32 as specific to each Lead Claimant in turn. They provoked the Defendant to issue the first application that is now before the Court. The application was issued on 15 July 2013. By it the Defendant seeks an order that: "1. The Claimants require the permission of the Court to include a claim for general damages as set out in the Further and Better Particulars of the Claims for General Damages dated 24 April 2013; 2. The Claimants are refused permission to include the claim for general damages as set out in the Further and Better Particulars of Claims for General Damages dated 24 April 2013; Alternatively, 3. The Claimants' claim for general damages as set out in the Further and Better Particulars of the Claims for General Damages dated 24 April 2013 be struck out; Alternatively, 4. There be summary judgment on the Claimants' claim for general damages as set out in the Further and Better Particulars of the Claims for General Damages dated 24 April 2013. " The application is supported by the 7th Statement of Mr Isted, the Defendant's solicitor. In opposition, the Claimants served the 16th Statement of Ms Srinivasan, the partner at Leigh Day having care and conduct of the litigation on behalf of the Claimants. Issue 1: Do the Claimants require permission of the Court to include a claim for general damages as set out in the F&PBs? Pleadings and Amendments Mr Layton QC, Leading Counsel for the Claimants, submitted that the purpose of statements of case is not to articulate and develop legal arguments but is to set out material facts. That is, in my view, an incomplete statement of the purpose of statements of case. While I accept that one function is to set out the material facts upon which the party relies, it must now be axiomatic that the purpose of statements of case is to "enable the court and the parties to identify and define the real issues in dispute."[3] That was so before the introduction of the CPR, and was reinforced by the changes that were introduced in the light of Lord Woolf's recommendations. Specifically, one of the principles that led to the introduction of pre-action protocols was that letters of claim and pre-action exchanges of information should become the norm so as to enable disputes to be defined and, if possible, settled before litigation was commenced. While there may be cases, of which this is one, where not all issues can be fully defined at the outset, the principle is clear: the parties are to define and address the issues in dispute as soon as reasonably possible. The Court is required to take a direct interest in the achievement of this end: CPR1.4(2)(b) provides that the Court must further the overriding objective by actively managing cases, which includes "identifying the issues at an early stage." To the same end CPR16.5(1) requires the defendant to state which of the allegations in the particulars of claim he denies, which allegations he is unable to admit or deny, but which he requires the claimant to prove, and which allegations he admits. CPR16.5(2) goes further by requiring that where a defendant denies an allegation he must state his reasons for doing so and, if he intends to put forward a different version of events from that given by the claimant, to state his own version. By these provisions, the rules attempt to ensure that both the parties and the Court can identify the matters in dispute with which they have to deal. That is necessary for the furtherance of other aspects of the Overriding Objective, including ensuring that the parties are on an equal footing, saving expense and ensuring that litigation is dealt with expeditiously and fairly. Seen in this light, the necessity for amendments arises where a party wishes to raise or pursue an issue which the existing pleadings do not accurately and fairly identify for the Court and the other party. The touchstone should be whether the existing pleadings identify the issue with sufficient particularity to enable the opposing party to understand the case it has to meet so that it can take appropriate steps to prepare to meet it (which may include accepting that it is well founded, assessing and pursuing the prospects of settlement, attempting to defeat it, or any variation on these themes) and, if necessary, to enable the Court to rule on the issue in due course. This is clear from the well-known observation of Peter Gibson LJ in Cobbold v LB Greenwich [1999] EWCA Civ 2074 that: "Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon… ." [Emphasis added]. It has long been well established that a party bringing forward amendments should formulate them with clarity. This is particularly so when the amendment is made late, but is of general application. Thus in Hyams v Stuart King [1908] 696, 724 Farwell LJ gave guidance, which is as apt in the post-CPR twenty-first century as it was at the start of the twentieth[4]: "… it is the duty of the Plaintiff's counsel, a duty which ought to be enforced by the judge, when he asks for an amendment which raises a fresh issue or a fresh cause of action, to formulate and state in writing the exact amendment that he asks, in justice to the defendant, in order that he may know exactly the new case that he has to meet, and to the judge in order that he may know exactly what he is asked to try, and to the Court of Appeal in order that they may know what has been tried and decided." Particular attention is often given to amendments that are brought forward "late", including those brought forward for the first time at trial. At this stage it is only necessary to point out that "late" is an elastic and relative term when applied to the timing of proposed amendments. What will matter when it is asserted that a proposed amendment is or is not "late" is whether or not the allowing of the amendment would have an adverse impact on the fairness of the proceedings. In many cases there will be a tension between the Court's instinctive wish to allow the real issues that exist between the parties to be brought forward for decision and its concern that to introduce an issue will be unfair, particularly where any disadvantage to the opposing party will be irremediable and cannot be remedied by an appropriate order for costs. In all such cases a balance must be struck. General and Special Damages As will appear in greater detail below, the Claimants assert that the matters they wish to pursue are to be described as "general damages" or "damages at large." I doubt the usefulness of either term when considering whether or not an amendment is required or should be granted. The terms "general damage" and "general damages" are capable of more than one meaning, depending on context. They can be used to denote damage falling within the first rather than the second limb of Hadley v Baxendale. In other contexts they may be used to indicate the nature of the proof that is required to give rise to an entitlement to recover. Where that use is intended, general damages are usually (but not always) used to denote non-pecuniary losses which are not susceptible to precise calculation (such as damages for pain, suffering and loss of amenity in personal injury actions); but losses which are essentially pecuniary may be included (as with damages for loss of profits attributable to passing off). A third distinction has historically been associated with pleading practice, with "special damages" requiring to be pleaded with sufficient particularity to demonstrate the calculation that underpins the claim while "general damages" merely require a general averment, with quantification being left to the judge or jury. An obvious example of this use of the terms is again to be found in personal injury pleadings where a Claimant conventionally asserts a claim for damages for pain suffering and loss of amenity without quantifying it but is required to provide greater detail in respect of an alleged loss of earnings or other financial losses.[5] None of these conventional uses of the terms will generally inform the question whether or not an amendment is required. This is at least in part because the various uses are themselves elastic. In my judgment, the level of precision that is required when pleading an issue or case, including a particular head of damages, should be determined by the need to provide a fair and sufficient indication to the Court and the opposing party of the case that is being brought and that the opposing party has to meet. Although I am not aware of specific authority on the point, modern pleading practice should not be and is not constrained by whether the label "general" or "special" damages is given to a particular item of claim. Take, for example, a claim for damages to compensate for physical damage to land. It is (correctly) common ground that the normal approach to assessment of such a claim is either by reference to diminution in value or by reference to costs of reinstatement. Describing such claims as claims for general damages should not and does not determine the level of particularisation that is required. If a claim for damage to land based on diminution in value were to be advanced, the opposing party needs certain information if it is to be able to meet the claim on an equal footing: as a minimum it needs to know what sum is claimed and the nature of the case in support of that claimed sum. In some cases the diminution in value claim may be advanced by reference to comparables; alternatively it may be by reference to a reduction in the income stream which the land had generated but which can no longer be maintained; or it may be by reference to costs of reinstatement. If any of these are the nature of the case that is being advanced, they should be pleaded so that the opposing party can address the propositions on which the claim is based and either accept or refute them. If the claim is advanced on the basis of costs of reinstatement, the opposing party must be entitled to know what those costs are said to be and how they are computed calculated or otherwise made up. If that information is not provided, there can be no equality of arms and the opposing party is unfairly disadvantaged. It follows from these observations that the mere fact that a party says that it claims damages because damage has been caused to land is not sufficient to alert the opposing party to the nature of the case that is being advanced, since claims arising out of damage to land may be many and varied. For these reasons, I approach the question whether the Claimants require the Court's permission to include a claim on the basis set out in the F&BPs by asking whether the claim there set out has previously been fairly and sufficiently brought to the attention of the Defendant (and the Court) so that the Defendant could or should have been able to identify it as the case it had to meet. The formulation of the Claimants case up to the F&BPs By their skeleton argument for the present hearing, the Claimants submit that "the central issue is ... whether the Court should be precluded at trial from considering whether the Claimants are entitled, in law and in fact, to any general damages for the damage to their land." On the question whether what is currently set out in the F&BPs constitutes or gives rise to the need for an amendment, they submit that the F&BPs "do not represent a change of case. The information in the [F&BPs] – most of which was anyway information already in the possession of the Defendant - represents the further elucidation of an existing case. It is further information about facts (the damage to the land) and a claim (the claim for damages) which has always featured as part of the pleaded case." The Claimants rely in particular upon the contents of pre-accident correspondence, the Claim Form, the Particulars of Claim and further information provided in February 2012. Since the hearing the parties have provided an agreed schedule of the key documents showing how the claim has been presented. The pre-action letter of claim was sent on 23 May 2007. It stated that "the construction of the pipeline has caused very significant damage to the lands surrounding the right of way." and that "The impact of the damage has been devastating to our clients. It has resulted in land that had previously been farmed by families for generations becoming unworkable, water sources have effectively disappeared or at best been depleted to unviable levels for agriculture, mining, the rearing of livestock and for human habitation of the farms. The sedation [sic] of water sources has similarly impacted upon agriculture and activities such as fish farming; …" Under the heading "Quantum" it said "you will appreciate that our clients are all farmers who carried out various economic activities both for their own family sustenance (which typically includes several extended families) as well as to sell commercially and derive and income from the same. We attach five example schedules setting out details of the damage and losses sustained. …" A typical pre-action schedule of loss is included in the hearing papers[6]. It identified the farm and its pre-pipeline productivity. It alleged de-forestation, sedimentation of water sources and other damage to land and alleged that currently the farm could no longer support those who had lived on the farm before. Schedules identified the pre-pipeline annual productivity of the farm, lost income by reference to reduced annual production, additional expenditure, current income and expenditure, additional income received, and a calculation of loss which aggregated the financial losses set out in the previous schedule and projected the annualised loss of production for balance of the 20-year expected life of the pipeline. It has been evident (and is not disputed) that the Claimants' cases have been founded from the outset upon allegations that their land had been damaged. However, neither in the pre-action letter nor in the pre-action schedules was there any mention of a claim for damage to the land advanced on the basis of diminution in value of the land, or by reference to the costs of reinstating the land. The letter articulated the Quantum claim as being in respect of the economic activities carried out on the farm, and this was explained by the schedules which provided a calculation based upon loss of productivity. Neither the letter nor the schedules mentioned any claim for general damages or any alternative formulation of a claim for damage to the land itself (as opposed to the Claimants' enjoyment of their land). The Defendant's letter of response to the pre-action letter of claim was dated 16 August 2007. The Defendant said that, because the schedules were not supported by evidence and there was no indication of the evidence that would be adduced to support the claims, it was impossible for the Defendant to respond to the section of the pre-action letter dealing with Quantum or the schedules that had been provided. The Claim Form issued on 29 January 2008 gave as Brief Details of Claim that "the Claimants' claim is for damages for damage to their properties in Antioquia, Colombia and the consequential financial losses caused by the nuisance, and/or negligence and/or breach of contracts entered into between the Defendant and the Claimants … in relation to the construction and operation of an oil pipeline passing under the land of the Claimants." It therefore raised specifically (a) a claim for damages for damage to the land, and (b) a claim for damages for consequential financial losses. The GLO made on 24 September 2008 established Standard Minimum Requirements for entry of a claim on the Group Register. Those requirements were pre-requisites which any Claimant had to satisfy in order to enjoy the benefits of being able to bring his or her claim within the structure of the Group Litigation. The Standard Minimum Requirements included that each Claimant should complete a Schedule of Core Information ["SOCI"]. Each SOCI had to include information about Loss and Damage as follows: "17. Details of the damage alleged to have been caused to the Affected Property as a result of construction of the OCENSA PIPELINE. Details of whether, prior to construction of the OCENSA PIPELINE, the Affected Property, was used for: agriculture, rearing livestock, forestry or mining. 19. Details of whether the Affected Property has been used for agriculture, rearing livestock, forestry or mining since construction of the OCENSA PIPELINE. 20. Details of any consequential losses claimed by the Claimant. 21. Details of the current state of the Affected Property and whether or not it generates any income. " At [19] of the 2012 judgment, the Senior Master said of the requirement to provide SOCIs in this form that: "the intention in my judgment was to give the Defendant the information they needed to check whether there was any damage to the land and whether it had been caused by the pipeline and if so if it had caused the consequential losses. I am quite certain that if there had been any intention to claim damages based on the future cost of remediation of the Claimant's land I would have insisted (and no doubt the Defendant would as well) on them being asked to give some indication, at the very least, of any remediation work they intended to carry out and probably a "ballpark" figure for the cost thereof. As the Claimants themselves maintain, reinstatement cost is a well known measure of loss the availability of which would have been well known to their lawyers at the time and if there had been any intention to claim it they would or should have intimated the fact." The Defendant submits on the present application that at least one purpose of the SOCIs was to alert the Defendant to the nature of the claim it had to meet and that, if a claim for general damages (or a claim such as is now being advanced by the F&BPs) was being advanced, it should have featured in them. While it is right that the GLO's formulation of the Core Information required of the Claimants did not refer to general damages, that is not surprising since by then the Court already had before it a formulation of how the Claimants were putting their claim, which did not indicate any wider basis of claim than for the loss of productivity. As the Senior Master put it at [17] of the 2012 Judgment, "the appropriate GLO issues … were formulated on the basis of the claim as it was understood to be in particular by the Defendant in the light of the draft particulars of claim and schedules of loss that had been served." On the information that is available to the Court on the present application, that was correct. Whatever the reason, as further SOCIs were filed, none made mention of a claim for general damages or expanded on the existing basis of claim, namely a claim for loss of productivity over the expected life of the pipeline. On 1 December 2008, Particulars of Claim were served in the case which has now become Lead Case 10. At [41] they referred to the damage alleged to have been caused to the land, including removal of vegetation and inadequate revegetation, soil erosion, sedimentation and damage to water courses. At [42] and [43] they alleged breaches of obligations owed pursuant to agreements and under Colombian law. At [44C] they alleged that the Defendant was liable to compensate the Claimant because its breaches, including environmental damage, were characterised by "dolo" or because the damage that occurred (including environmental damage) was foreseeable at the time of contracting. The Particulars of Claim concluded at [50] that "by reason of the breach of contract and/or negligence of the Defendant and/or the facts and matters set out above, the Claimant has suffered loss and damage and claims accordingly. Further particulars will be delivered in due course."[7] The Defendant requested further and better particulars stating that "the Claimant is obliged to particularise his loss. Provide full particulars of the loss and damage which the Claimant claims." By way of further particulars, on 29 May 2009 the Claimant referred back to the schedule which had previously been served on 6 July 2007, which was in the form that had been adopted for the pre-action schedules and the SOCIs, as described above. The net effect, therefore, was that, while the Particulars of Claim referred to the fact of damage to the land, there was no further expansion or exposition of the case on quantum, which remained articulated as a claim for past and future loss of productivity over the 20-year expected life of the pipeline. At [22] of the 2012 Judgment the Senior Master summarised the position to this point by saying that: "The purpose of these documents was to allow the court and the Defendant to know; (a) what damage the pipeline was alleged to have caused and; (b) the value of the claims and (c) to enable the court and the parties to craft appropriate directions including the selection of lead cases." On the information available to the Court on the present applications, that was plainly right. On 12 March 2010, by which time the Group Register had been closed for 9 months and Lead Cases chosen on the basis of the information then available, Particulars of Claim were served by the other 9 Lead Claimants. The Particulars of Claim generally followed the pattern that had previously been adopted and, specifically, alleged the fact of damage to the land. Under the heading "Loss and Damage" the Particulars of Claim pleaded that: "By reason of the facts and matters set out above the … Claimants have suffered loss and damage and claim accordingly. In this regard, a Schedule of Loss was served on 6 July 2007. Further particulars will be served in due course. The Claimants claim compensation pursuant to Colombian law, quantified pursuant to English law and/or damages" Once again, therefore, the formulation of the claim on Quantum reverted to and did not expand upon the formulation adopted by the Schedules in and from 2007. On 1 March 2011 the Senior Master ordered the Lead Claimants to particularise by 26 April 2011 what relief, if any, other than the payment of damages/compensation and interest they claimed; and to serve and updated Schedule of Loss setting out the losses they claimed by 31 January 2012. In response to the first order the Lead Claimants confirmed that they claimed no other relief. The Claimants were unable to comply with the second order in the 11 months originally allowed by the Senior Master. The date for service of the updated schedules was extended first to 13 May 2012 and ultimately to 12 June 2012, just under 15 ½ months after the original order. On 13 September 2011 the Senior Master ordered the Claimants to identify "by marking the relevant location on a map or photograph ... those parts of their properties which have suffered erosion or other damage as a result of the construction of the OCENSA pipeline, which they contend have suffered a consequent reduction in productivity." The terms of the order, requiring the identification of damage to the land which was said to have caused reduction in productivity, accurately reflected the manner in which the Lead Claimants had pleaded their claims up to that date. The Lead Claimants provided the information by annotating aerial photographs with numbers in the locations of damage, which numbers were cross-referred to tables specifying the nature of the damage suffered in that location. As before, the identified damage consisted of affected crops, affected pasture, soil erosion, and affected watercourses. On 24 February 2012 the Claimants served further information. It included sections entitled "Generic Matters" and "The Lead Properties" and two Appendices running in aggregate to just under 300 pages, plus the annotated aerial photographs and tables to which I have just referred. The "Generic Matters" referred to damage to the Claimant's Land, linking the descriptions of damage to allegations of negligence or other default on the part of the Defendant. Section (VI) of the "Generic Matters" was headed "DAMAGE". It summarised features of the damage on the Lead Properties which are alleged to be common to the Lead Claimants Properties under the following headings: i) Productivity/Fertility of the ROW (Right of Way); ii) Productivity/Fertility of Sedimented Fields/Land; iii) Productivity/Fertility of Swampy/Flooded Areas; iv) Reduced Productivity of the Property as a whole. Part 2 of the Further Information provided details of the damage alleged to each of the Lead Claimants' properties in turn. The Further Information did not address the nature of the claims being brought that arose out of the alleged damage. The only pointer to the claims that the Lead Claimants wished to bring was the headings for the common damage identified above, which were again consistent with a claim being brought on the basis of reduced productivity and did not indicate the existence of any other head of claim. On 13 June 2012 the Lead Claimants served Updated Schedules of Loss and Damage which, for the first time, identified claims for the cost of soil recuperation and regeneration. Further particularisation was ordered. In their final form the Revised Schedules were presented under the following headings: "I Summary of Claim II General Damages (1) Cost of Reinstatement (2) Moral Damages (3) Loss of Amenity/Quality of Life (4) Past Loss of Domestic Consumption (5) Future Loss of Domestic Consumption (6) Outlay of Labour or Resources III Past Expenses IV Past Loss of Income V Losses and Expenses Affecting the [ ] Family VI Interest VII Future Expenses VIII Future Loss of Income IX Payments for which Credit is Given" The Defendant disputed the Lead Claimants' right to bring a claim for the cost of reinstatement, which led to the 2012 Judgment. The heads of claim described as "Moral Damages" and "Loss of Amenity/Quality of Life" are directly relevant to the present application and require some explanation. The Revised Schedule of Loss and Damage for Lead Claimant 38 (which is provided to the Court as being typical) presents a claim for Moral Damages, pleading that "pursuant to Colombian law, the Claimants are entitled to claim damages for emotional distress, pain and suffering, known in Colombian law as daño moral." As particulars of the claim it alleges that the Claimant and the families who lived on the properties at the time of the construction of the pipeline, have suffered emotional distress, pain and suffering, due to: "14.1 The anguish and uncertainty caused by the damage to the soil on pasture fields and water sources on the Property, which occurred all at once over a short period of time, and the damages attendant thereon which had an immediately affected a number of activities which the Claimants relied on for their livelihood (notably, loss of livestock, fruit trees, timber, and fish); 14.2 In particular, the uncertainty as to the availability of drinking water due to damage caused to the water source used by [the families]. ... The Claimants also suffered the anxiety of having to search for alternative sources of drinking water and were forced to construct a new well at another location on the property. However, the quality of the well water was not as good as the one previously used. The Claimants' anxiety in not having suitable drinking water available was only allayed after they were provided an aqueduct to replace the loss of the well. 14.3 The anguish and uncertainty as to the general lack of availability and accessibility of suitable water on the Property upon which the various farm activities depended (in particular cattle, fishing and crop irrigation). ... This caused a situation of real anxiety and insecurity for the Claimants in circumstances where a large number of family members and the main farming activities depended upon these sources and suitable alternatives are limited for a number of reasons, not least because they are located at great distances which are inconvenient." The Revised Schedule also presents a claim for Loss of Amenity/Quality of Life, pleading that "Under Colombian law, the Claimants are entitled to claim daño a la vida de relación, which translated means loss of quality of life and which can be equated to loss of amenity. Colombian law awards this head of loss to compensate for damage which prevents the claimant enjoying his/her former levels of quality of life, and which recognises the increased difficulties that the claimant faces in living his life as a result of the tortious wrong suffered." It rehearses that the Claimants are subsistence farmers who lived according to a traditional and inherited way of life, relying upon personal and inherited knowledge in order to farm their land. Subsistence farming involves both sale of produce and barter with neighbours and requires not merely self-sufficiency but a surplus to provide food security and to allow him to trade for the acquisition of necessities. It particularises the loss of amenity/loss of quality of life flowing from the Claimants' inability to carry on their traditional way of life or being unable to carry it on without considerable increased difficulties. It instances continuing difficulties including the need to spend additional time and labour in order to secure maximum productivity from their land; the need to spend extra time to acquire suitable water; consequent reduction in time for leisure and social activities; the continuing effect of damage to the soil, pasture fields and water courses which caused anxiety and distress for the Claimants and their families; loss of production which led to a loss of social status; reduced levels of food security consequent upon reduced production, with the result that the Claimants and their families have been obliged to go hungry and/or to forego key nutritional elements of their diet, if they have been unable to source these elements by other means (e.g. purchase or bartering); lack of ability to generate surpluses as before; and inability to participate in the barter economy with consequent reduction in social status. In addition it is alleged under this head that the Claimants "lost the full amenity of the Property due to the damage caused to by the construction of the pipeline." Instances of this loss are given: the available water on the property in the affected water courses may not be suitable for animals or humans because of a significant increase in iron levels; the sedimentation of the well meant that the Claimants could not continue to allow it to be used by the small community of 12 families as a source of drinking water, particularly in the dry season; and the severe erosion to the top layers of the soil and the presence of iron rock shells which is an indication of severely degraded shells. These two heads of claim are similar to heads of claim that are recognised under English law, but I bear in mind at all times that they are not necessarily identical. Further explanation of the two heads of claim is provided by the Expert on Colombian Law whose report has been served on behalf of the Claimants. She explains that Moral Damages are not aimed at punishing the wrongdoer but are measured "according to the intensity of the emotional distress." Loss of amenity damages are said to be awarded in special cases, in particular for personal injury. It has been defined as the deterioration of the quality of life of the victim. The main difference between the two categories is that "while moral damages are related to the most intimate and subjective feelings, the damage to a person's life of relationship is expressed in objective terms, affecting the external dimension of the victim, with a negative impact on its previous way of life, even if no monetary loss is suffered." In the light of this explanation I understand that Colombian Law recognises a distinction between (a) compensation for damage caused to property, (b) compensation for pecuniary losses suffered as a result of damage to property, and (c) compensation for losses that are personal to the victim although consequential upon damage to property, which in Colombian law are referred to as Moral Damages and Loss of Quality of Life. When assessing these heads of claim applying English law, similar distinctions are familiar since categories of compensable damage may include (a) compensation for damage to property, which in the case of land is typically measured by reference to diminution in value and/or costs of reinstatement, (b) consequential losses, such as loss of income or increased expenditure, and (c) compensation for the personal effect upon the victim, which may be characterised as damages for loss of amenity. I would merely add for present purposes that loss of productivity may in some cases be used as the basis for measuring (or providing a cross-check for) diminution in value, as typically happens when valuing income-producing buildings by reference to Estimated Rental Values and Yields. For completeness I note that, as a general principle, it appears that the object of awards of damages in Colombian law is essentially the same as that enunciated in English law by Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39, namely to put the party as nearly as possible in the same position as he would have been in if he had not sustained the wrong. On 15 February 2013 the Senior Master ordered the Lead Claimant to "provide a written statement which sets out their case as to how they will contend for general damages in respect of damage to their property". The Claimants' response was served on 8 March 2013 and included: "3. The Lead Claimants will contend that, in circumstances where they are precluded from claiming for the cost of reinstatement to their land, the actual financial loss caused to each of them by the Defendants' actionable breach of duty as pleaded in the Schedules of Loss is inadequate to satisfy the basic criterion for the award of damages, namely to put them in the same position as they would have been in if they had not sustained the said breaches of duty. 4. They will ask the court to award them, in addition to the damages referred to in the Schedules of Loss, such sum by way of general damages as the court, in its function as tribunal of fact equivalent to a jury considers to be just and equitable in all the circumstances of the case to provide them adequate compensation for the damage to their land. In this regard, in addition to the general principles of law founding such a claim for general damages, the Lead Claimants will rely on the court's power under section 50 of the Senior Courts Act 1981 to award damages in lieu of specific performance or injunction." This formulation makes clear that the claim for general damages is brought because of the disallowance of the claim for costs of reinstatement and in substitution for it. It marked the final state of the development of the Claimants' case on quantum before the service of the F&BPs on 24 April 2013. The Case Advanced by the F&BPS The immediate purpose of this review is to identify whether the F&BPs seek to introduce a case which is materially different from what has been advanced before such that it amounts to an amendment requiring the permission of the Court. I leave to later the questions whether, if an amendment is required, the claims that are being advanced are legally admissible and, if so, whether permission to amend should be given. The first section of the F&BPs is headed "Introduction" and serves that purpose. At [5] it is pleaded that "the Defendant has accepted that the heads numbered (2) to (6) under "General Damages" [in the Revised Schedules] are adequately pleaded. These particulars do not concern those heads, but concern the damage to the Lead Claimants' land." For reasons that will appear, this statement is incorrect, as the F&BPs cannot reasonably be interpreted as being solely concerned with the damage to the Lead Claimants' land but go into considerable detail about what is in one place described as the Claimants' "symbiotic relationship" with their land. The second section sets out the "Legal Basis and Approach" adopted by the Claimants and bears close scrutiny. [6] pleads that the particulars in the second section "are intended to give notice to the Defendant of the legal basis for the Lead Claimants' claims in respect of those general damages which are not within the heads of loss set out in the March 2013 Schedules of Loss and of the approach which the Lead Claimants will ask the court to adopt." It therefore appears that the intention of the F&BPs is to advance a claim for general damages which is not within the heads of loss set out in the Revised Schedules of Loss (including moral damages and loss of amenity damages). That would be consistent with the 8 March 2013 Statement. On the basis of my finding that no claim for general damages had been identified or articulated before the Revised Schedules of Loss it would therefore follow that the claims being advanced in the F&BPs were new when put forward by a combination of the Revised Schedules, the 8 March 2013 Statement and the F&BPs. However, since it is the Claimants' submission that these documents merely elucidate an existing case, it is necessary to analyse the F&BPs to see whether this is in fact correct. Having identified the Livingstone v Rawyards Coal principle at [10], the Claimants set out how they submit the Court should give effect to it in this case. [11]-[19] are central to the formulation of the Claimants' case and are set out in full below: "Giving Effect to the Underlying Principle 11. In these cases, the court cannot adopt any of the approaches usually adopted by English courts in the assessment of damage to immovable property. An assessment based on a diminution in value is unrealistic in these cases, in view of the particular circumstances of the Lead Claimants and their properties and not least in view of the changing and uncertain security situation which prevails in this part of Colombia. The Defendant has not contended the contrary. The same goes for the cost of replacement land, which in any event would not be a just approach to adopt. Claims based on the cost of reinstatement, which were advanced by the Claimants, have been excluded by order of the court. It is therefore necessary for the court to adopt another approach to assess the sum which it should award each Lead Claimant. 12. The Claimants will ask the court to assess such general damages at large pursuant to its fact-finding or 'jury' function. As noted below, it should do so in light of all the circumstances of the case. 13. The Claimants will submit that the court should first reach at least a provisional view as to what sums to award in respect of each of the heads in the Revised Schedule of Loss, and that it should then consider whether those sums adequately give effect to the underlying compensatory or indemnity principle. If and to the extent that they do not, then the application of that underlying principle requires that the court make an additional award of general damages to make good that deficiency. For example (and without limitation), the court's assessment of moral damages or damages for loss of amenity / quality of life will be directed particularly to the personal non-pecuniary loss suffered by the particular Lead Claimants, whereas the court may consider that an award under those heads will have taken no account, or only inadequate account, of the damage to that Lead Claimants' property. The court may further consider that the quantitative exercise which the Claimants will ask it to undertake in respect of the Claimants' pecuniary losses by way of loss of productivity and other matters fails, or fails adequately, to compensate for non-pecuniary losses suffered by reason of the damage to the Claimants' land. 14. Such an approach is in line with the court's approach to the assessment of damages for trespass. Examples of cases in which such an approach has been adopted are the decisions of the Court of Appeal in Scutt v Lomax (unrep, 25 January 1990) and Bryant v. Macklin [2005] EWCA Civ 762. 15. In considering whether the award of damages does satisfy the underlying principle, the Claimants will ask the court to consider one or more of a number of cross-checks to benchmark its assessment. 16. First, it could consider an upward revision of its multiplier in respect of future loss of productivity to take account of the matters which it has not, or not adequately, reflected in its assessment of the other heads of loss. 17. Secondly, it could consider an award of damages on a 'perpetuity' basis in place of a multiplier-based approach. 18. Thirdly, it could consider the Wrotham Park case law, following the decision of Brightman J. in Wrotham Park Estate Co. Ltd v. Parkside Homes Ltd [1974] 1 WLR 798. In the current state of the law, Wrotham Park awards may (relevantly) refer to (1) compensatory damages which exceed the actual financial loss caused to the Claimants by the actionable breach of duty; or (2) damages awarded (in lieu of specific performance or an injunction) under the jurisdiction created by Lord Cairns's Act and now to be found in section 50 of the Senior Courts Act 1981: see Pell Frischmann Engineering Ltd v. Bow Valley Ian Ltd [2009] UKPC 45, para. 46 19. The Claimants rely on each of these two descriptions of Wrotham Park damages. One of the bases on which Wrotham Park damages may be assessed is to consider the sum for which a reasonable and reasonably advised person, with knowledge of all available options, in the position of the Claimants, would have negotiated for compensation with a reasonable counter-party if he or she had known in advance that damage would occur of the nature and extent which did occur ('hypothetical lost bargain basis')." A number of points immediately arise: i) In her 16th Witness Statement, Ms Srinivasan gives detailed reasons why the Claimants consider that diminution in value is not an appropriate measure of damages for the damage to the Claimants' land. In briefest summary, she says that issues relating to security and public order tend to be the most important depreciating factor, that armed groups may illegally occupy farms at any time and that there is no stable information about property values. That may be right, but it does not follow that diminution in value is an irrelevant consideration. For reasons that are discussed later, the value of the land in its undamaged and damaged states may be a relevant factor when deciding what constitutes appropriate compensation, whatever is adopted as the primary approach to quantification of loss; ii) For similar reasons, it is not obvious why the cost of replacement land is irrelevant to the assessment of damage to the Claimants' immoveable property. If, for example, it were to be shown that the claims based upon loss of productivity, or the claims as now being formulated as claims for damage to land, were to result in sums being claimed that were exorbitantly greater than the cost of replacement land, the cost of replacement land could be a material consideration, acknowledging all the while that removal of the Claimants from their damaged land would be a major step and is not one that they presently appear to contemplate; iii) The assertion in [11] that "it is therefore necessary for the court to adopt another approach to assess the sum which it should award each Lead Claimant" neglects the fact that the only reason why the Claimants' preferred approach to the assessment of damages for damage to the land as such (cost of reinstatement) is unavailable is because the Claimants did not advance it until it was too late for the claim to be brought fairly. It would be wrong to suggest that it was otherwise "necessary" as a matter of principle for an alternative measure of loss to be devised; iv) The suggestion in [12] that the Court should assess "such" general damages "at large pursuant to its fact-finding or "jury" function" and that it should do so in light of all the circumstances of the case, provides no clue as to how the Defendant is expected to address this head of claim or how the Court is to approach its functions. The only identification of the principles to be adopted by the Court are in [13] where it is suggested that the Court should assess the other heads of damage and "should then consider whether those sums adequately give effect to the underlying compensatory or indemnity principle." This will necessarily include making a "fact-finding" or "jury-function" assessment of the claimed loss which would, but for the Claimants' procedural failures to advance the claim in good time, have been measured by reference to the cost of reinstatement. In circumstances where the Claimant rejects the relevance of replacement costs or diminution in value but has consistently advanced a financial case based upon diminution in the income stream for a period of 20 years, there seems to be no sound basis upon which or by reference to which the Court is meant to address this supposedly fact-finding assessment, unless it be by reference to costs of reinstatement, which the Claimants have consistently asserted is the preferable measure of loss. What has happened in this case is that the Claimants have attempted to bring an appropriate claim for damage to their land but have done so too late. The Livingstone v Rawyards Coal principle applies where all necessary and appropriate claims are brought forward to provide adequate vehicles for the provision of full compensation. It does not state or imply that where a legally recognisable and conventional head of claim is ruled inadmissible because of a party's procedural default, the deficit shall be made up by damages awarded "at large." Before returning to the authorities upon which the Claimants rely in support of the claim they wish to advance and the cross checks that the suggest should be applied, I turn to the Facts Relied On by the Claimants in the F&BPs, treating the facts in relation to Lead Claimant 38 as typical. At [22] the Claimants plead that "the nature of the exercise which the Claimants will ask the court to perform involves the court taking account of all the circumstances of the case." The facts specific to Lead Claimant 38 are at [23.3] of the F&BPs and include the following: i) "It is intended that the property will stay within the family. Therefore, insofar as the damage to the property remains unremediated, the patrimony of [the Claimant] is reduced. The family heirs will continue to contend with damaged land and damaged water sources into the future."[8] This includes two separate matters. First, the effect upon the present Claimants patrimony, which is clarified later[9]; and, second, the fact that the heirs (who are not Claimants) will have to contend with damaged land. This implies a claim for the financial consequences to the heirs of inheriting the property "insofar as the damage to the property remains unremediated". It does not state whether the property will or will not remain unremediated and does not advance a claim that the present owners have suffered financially measurable loss as a result of the damage to their land; ii) "[The Claimant] has had to contend with the acute distress of witnessing the undoing of the work he, his late brother and his family members had done due to the damage suffered to the property."[10] This appears to lay the basis for a claim for Moral Damages or, possibly, loss of amenity damages. It does not appear to be relevant to an assessment of compensation for damage to the land as such; iii) "The land was intended to provide security to the Claimants and their entire extended family far into the future... . [The Claimant] is now faced with a situation wherein the lifetime of work designed to provide such security to his and his entire extended family at present and into the future has been undermined by the damage to the property."[11] The loss of productivity during the expected life of the pipeline is already claimed and, if proved, will compensate for the lack of security during that period. The Claimants do not identify what else is being referred to either in terms of period or of quantification of the "loss of security". The pleaded facts and matters could also be the basis for a claim for Moral Damages or Loss of Amenity Damages. Viewed either on its own or in context, the nature of the case being advanced is unclear; iv) "The Claimants have suffered particularly acutely due to the damage to the water sources on the property. The well relied upon by the Claimants became substantially sedimented and, during the initial period of damage, the Claimants' family members, including young children, fell ill after drinking the sedimented water. No assessment has ever been made of either the physical harm or the emotional distress arising out of this incident.. Ultimately, an aqueduct was installed with the intention of remedying the ongoing problems with the water quality. However, the aqueduct has not solved the problems of obtaining sufficient drinking water."[12] This advances a claim for personal injuries and claims for emotional distress and continuing difficulties in obtaining drinking water which appear to fall within the ambit of the claims for Moral Damages or Loss of Amenity Damages. The opening words ("The Claimants have suffered ...") indicate that this is not a claim in respect of damage to land as such but for the impact it has had on the quality of life of the Claimants; v) "The Claimants and their large family have lost the ability to rely on available resources (both natural and man made) on their farm to the extent they did before the damage caused by the OCENSA pipeline."[13] It is not clear what, if anything, this is intended to add to the loss of productivity claim and the claims that are already admitted in respect of loss of domestic production. The facts alleged might be intended to form the basis of a claim for Moral Damages or Loss of Amenity but the F&BPs do not identify their relevance apart from the statement at [5] that they do not concern those heads of damage but do "concern the damage to the Lead Claimants' land." How they are intended to affect the assessment of damages "at large" for damage to land is not stated and is not self-evident; vi) "The ongoing damage to water sources means that the land is significantly impaired both as an asset and in its functions as a farm and a place for domestic life. This has not been valued adequately or at all by claims for loss of productivity."[14] Any impairment of the land "as an asset" would be compensable by reference to diminution in value or cost of reinstatement. Impairment "in its functions as a farm" has no obvious meaning if it is not a reference to loss of productivity. Impairment "as a place for domestic life" is the subject of the claims for Moral Damages or Loss of Amenity. If and to the extent that the financial consequences are not reflected in the loss of productivity claim, that is a consequence of the Claimants' failure to advance a claim for damage to their land as such on one of the conventional bases or to limit their loss of productivity claim to a period of 20 years; vii) After pleading that the contracts entered into before the pipeline was constructed were inadequate to provide full compensation, it is alleged that "a reasonably advised person, with knowledge of all available option, in the position of the Claimants, would have negotiated for compensation which would have represented the severity and extent of damage suffered, and which would have reflected the ongoing nature of the damage which would outlast the Claimants lives ..." This is a reference to the Wrotham Park Estate line of authority which had previously been suggested as a cross-check with which the Court could bench-mark its assessment. I refer again to the Claimants' suggested cross-checks under Issue 2 below. For present purposes it is sufficient to record that at [15] – [18] of the F&BPs the Claimants suggested three "cross-checks to bench-mark [the Court's] assessment." They are: i) "An upward revision of its multiplier in respect of future loss of productivity to take account of the matters which it has not, or not adequately, reflected in its assessment of the other heads of loss"; ii) "An award of damages on a "perpetuity" basis in place of a multiplier-based approach"; and iii) The Wrotham Park case law, under which awards "may (relevantly) refer to (1) compensatory damages which exceed the actual financial loss caused to the Claimants by the actionable breach of duty; or (2) damages awarded (in lieu of specific performance or an injunction) under the jurisdiction created by Lord Cairns's Act and now to be found in section 50 of the Senior Courts Act 1981." Before service of the F&BPs the Claimants had not hinted at, far less articulated, a claim for compensation for damage to the land as such (or any other claim) which should involve the implementation of these cross-checks as a part of the process of assessing damages. Discussion The Claimants submit that they are advancing a claim for "general damages" or for damages "at large" and that the F&BPs do not represent a change of case. Until service of the Revised Schedules of Loss the Claimants had not at any stage articulated a claim for "general damages". They had made plain from the outset that their case was founded on the fact of damage to land, but they had not identified or advanced a claim for compensation for the damage to their land as such, instead opting to formulate a claim for lost productivity over the life of the pipeline and other miscellaneous expenses that were identified by and from the time of the SOCIs. Equally, until service of the Revised Schedules of Loss they had not at any stage identified or advanced a case claiming compensation for the personal effects upon them of the damage to their land. That was done for the first time in the Revised Schedules by the advancing of the claims for moral damages and loss of amenity damages. As I have said, and as the review of the F&BPs set out above shows, the Claimants are wrong to submit that the matters pleaded in the F&BPs do not concern heads (2) to (6) under "General Damages" and are wrong to suggest that they concern only damage to the Lead Claimants land. It is clear that, while references are made to the damage to the Lead Claimants' land the main thrust of the specific particulars at [23.3] is to identify respects in which the Claimants' enjoyment of their land is diminished, though there are passing references to loss of productivity. It is not at all clear from the F&BPs how the claim there being articulated differs from the claims for Moral Damages or Loss of Amenity, which are already in play. When asked to explain the demarcation between the claims for Moral Damages and Loss of Amenity that are already in play and the claims being advanced in the F&BPs (which say that they do not concern those heads), Mr Layton QC said that the matters raised in the F&BPs sounded in damages either as Moral Damages or Loss of Amenity Damages or otherwise. He did not identify any demarcation line for the Court (or the Defendant). Furthermore, it is not at all clear how the matters raised in the F&BPs are supposed to be translated into "proper compensation" for damage to land as opposed to their adverse effect upon the Claimants' enjoyment of that land. The reference to loss of patrimony is clearly expressed, but if the Claimants are wishing to assert that loss of patrimony as there expressed forms a coherent part of an assessment of damages for damage to land, they have not explained how such an assessment is meant to work and it is not, in my view, self-evident. This confusion is not resolved by the evidence served by the Claimants for this application. Ms Srinivasan summarises the Claimants position in her 16th Statement by saying that "The Claimants' claim is and always has been for damages to or compensation for their property and for damages for the loss of productivity and expenses consequential on the damage to their property."[15] She says that "the Claimants have already adequately claimed, particularised and explained their claim for general damages for the damage to their land and no further particularisation or amendment of the statement of case is or should be required."[16] She summarises the Claimants approach to General Damages as being that "the heads of loss covered by general damages for moral damages and for loss of quality of life do not cover certain types of loss or do so inadequately such that the Claimants contend an additional award will be required in order to properly satisfy the compensatory objective of an award of damages."[17] At [46] she summarises the Nature of the Damage to the Properties in respect of which compensation is sought; and at [48] she summarises the nature of the loss for which compensation is sought in terms that are consistent with the F&BPs but do not provide further explanation of how such matters are to be converted into compensation for damage to the land, as opposed to compensation for the Claimants' ongoing loss of amenity. Viewed overall, however, Ms Srinivasan supports the suggestion that the claims that the Claimant now wishes to advance, as set out in the F&BPs, are claims for damage to the land. The Claimants' skeleton argument for this hearing submits that the nature of the damage for which compensation is sought is (in briefest summary) damage caused by erosion and sedimentation and damage to water courses and that the compensation for this damage is sought on the basis that the financial losses which flow from the damage to the land (together with moral damages and damages for loss of amenity/quality of life) do not represent adequate compensation for the damage caused[18]. This explanation confirms what was said in the 8 March 2013 Statement, namely that the claim now being advanced is intended to take the place of the claim for reinstatement costs which the Senior Master disallowed in the 2012 Judgment. I return to the question which, when answered, should determine Issue 1: do the F&BPS seek to introduce a case which is materially different from what has been advanced before such that it amounts to an amendment requiring the permission of the Court? In answering that question the touchstone that I apply is whether the previous pleadings identified the issues now being considered with sufficient particularity to enable the opposing party to understand the case it has to meet. There is only one possible answer to this question: there is nothing in the previous pleadings (or in the pre-action correspondence) which identified, advanced or articulated a claim such as is now advanced by the F&BPs. The issue is not determined by the Claimants' use of the label "general damages". What matters is that at no stage did the Claimants identify, advance or articulate such a claim for damages for damage to the Claimants' land so as to identify for the Defendant (or the Court) the case that the Defendant had to meet. That omission occurred because the Claimants did not formulate any claim for damage to their land (rather than loss of productivity consequent upon that damage) until the Revised Schedules attempted to advance a claim for reinstatement costs. That was a new claim and was disallowed. The present attempt to bring a claim in for general damages for damage to the land is an attempt to introduce a further new claim in substitution for the disallowed reinstatement costs claim. The Claimants submission that the F&BPs do not represent a change of case is rejected, since no such case had been articulated before: the fact that some of the information now contained in the F&BPs had previously been in the possession of the Defendant does not mean that the case now being advanced is "an elucidation of an existing case." While the Claimants have always founded their claims on the fact of damage to their land, it was not until the Revised Schedules of Loss in mid-2012 that any claim was advanced other than on the basis of loss of productivity over the expected life of the pipeline. I therefore conclude that the Claimants require permission to include a claim for general damages as set out in the F&BPs. Issue 2: Should permission be granted to include the claim for general damages as set out in the F&BPs. The Court's first instinct will be that amendments ought in general to be allowed so that the real dispute between the parties can be adjudicated upon. It is therefore for the Claimants to satisfy the Court that the amendment identifies a real (as opposed to fanciful) dispute. Once that is done, the burden is on the Defendant to satisfy the Court that there are good reasons why permission should not be granted. Do the proposed amendments raise a real dispute to be tried? On the first point, the Claimants submit that the damage to their land is serious and should be the subject of compensation. The Defendant responds to this by submitting that a claim for damages at large in circumstances where the Claimants could, had they done so in time, have brought a claim for reinstatement costs is not recognised in English law and is therefore inadmissible. There are well recognised circumstances in which the Court will award what are described as general damages where conventional heads of claim leave an apparent deficit in compensation. One such circumstance is exemplified by the decisions in Scutt v Lomax (2000) 79 P & CR D31 (CA) and Bryant v Macklin [2005] EWCA Civ 762. In Scutt v Lomax the Defendant's trespass destroyed trees and structures on the Claimant's land, which the Claimant had established as a memorial to his daughter. In stating the applicable principles Clarke LJ explained that the measure of damages in trespass which has caused damage to land may be diminution in value of the land or the reasonable cost of reasonable reinstatement, or in some cases a figure in between. The reasonable cost of reasonable reinstatement may ordinarily be recovered even if it is greater than the diminution in value. However, when considering the reasonable cost of reasonable reinstatement the Court will consider whether the amount awarded is objectively fair; and in deciding what steps it is reasonable to take by way of reinstatement, the Court will take account of the cost of the reinstatement. This process, which is founded on what is reasonable and objectively fair, may lead to the conclusion that full reinstatement is either unreasonable of itself or is unreasonably costly, in which case the Court may only award the cost of partial reinstatement. If that happens, the consequence of the Court's principled approach to the measure of damages may lead to a deficit, through no fault of the Claimant's. In Scutt it was concluded that it was not reasonable to replace mature willow trees with replacements of the same maturity, at a cost of £18,500. £8,000 was awarded, which would cover the cost of less mature trees. But that left a deficit, since the application of the principled approach would leave the Claimant's site with trees that were less mature than would have been the case but for the Defendant's tort. In those circumstances, the Court awarded general damages "to compensate the claimant for the loss of amenity" caused (amongst other things) by the replacement with less mature trees. It is also to be noted that the sum awarded as general damages was £3,000, not the £10,500 deficit attributable to the principled approach to reinstatement cost. Bryant v Macklin was similar: it was held that neither diminution in value nor full reinstatement costs should be awarded. Instead, damages were calculated by reference to the cost of planting young whips in place of the mature trees that had been destroyed. This application of the normal principled approach led to a deficit in compensation and the court awarded general damages in addition, which were expressed to be general damages for loss of amenity. Three points may be made about these authorities. First, in each case the Claimant had claimed damages on the conventional basis for claims for damage to land, i.e. diminution in value or reinstatement costs. The need for general damages arose from the principled approach by the court to assessing what were the reasonable costs of reasonable reinstatement. Second, in each case the general damages that were awarded were awarded in addition to and not in substitution for an award of damages by reference to diminution in value or costs of reinstatement. In other words, the award of general damages was a "top up" to a conventionally framed award of damages and did not replace it. Third, it will immediately be noted that the Courts' description of the awards as being compensation for loss of amenity suggests that they would fall within the Colombian law heads of damage (Moral Damages and Loss of Amenity) that are already in play in this action. The parties have not identified any case where general damages for loss of amenity of the type awarded in Scutt and Macklin have been awarded in substitution for a conventional award of damages based on diminution in value or reinstatement costs. It seems to me that there is a conceptual difficulty in attempting to evaluate damage to land by reference to a person's loss of amenity. In some cases, no doubt, the reduced amenity to be had from a piece of land may feed into an assessment of diminution of value; but that brings the Court round in a full circle and begs the question whether what is being valued is the land or the landowner's amenity. Even if such damages were recognisable in principle, it seems to me highly doubtful that the Court would feel compelled to adopt this measure in circumstances where the need for the Claimants to advance it is their own failure to advance a conventional claim in time so that the conventional claim, when finally advanced, has been disallowed by the Court. As the statements of principle in Scutt make clear, part of the assessment of damages in such cases involves an assessment of what is fair and objectively reasonable; and I doubt whether it is either fair or objectively reasonable to fashion a novel head of damages, for which there are no developed criteria or principles in the authorities, so as to assist the Claimants in these circumstances. The second line of authority upon which the Claimants rely builds on Wrotham Park Estate Company v Parkside Homes Ltd [1974] 2 All ER 321. In Wrotham Park the Defendant's breach of covenant profited him but did not diminish the value of the Plaintiff's land. Brightman J awarded damages assessed by reference to what might reasonably have been demanded by the Plaintiffs from the Defendant as a quid pro quo for agreeing in advance to relax the requirements of the covenant to permit the Defendant to act as he did. The express basis for the award was that it would not be "just that the plaintiffs should receive no compensation and that the defendants should be left in undisturbed possession of the fruits of their wrongdoing."[19] The fundamental requirements of justice are at the heart of the jurisdiction to make awards of this kind. Thus in WWF – World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2007] EWCA Civ 286 at [59] Chadwick LJ said: "When the court makes an award of damages on the Wrotham Park basis it does so because it is satisfied that that is a just response to circumstances in which the compensation which is the claimant's due cannot be measured (or cannot be measured solely) by reference to identifiable financial loss. ... [T]he underlying feature is that the court recognises the need to compensate the claimant in circumstances where he cannot demonstrate identifiable financial loss." More recently, in Giedo Van Der Garde BV v Force India Formula One Team [2010] EWHC 2373 (QB) at [515] Stadlen J expressed the view that Wrotham Park damages may fall for consideration "in any suitable case where recoupment of financial loss may not provide an adequate answer." I do not understand his reference to a case where recoupment of financial loss "may not" provide an adequate answer as qualifying the statement of principle in WWF which is stated to be on the basis that "the claimant's due cannot be measured (or cannot be measured solely) by reference to identifiable financial loss." In addition, it seems clear that the Court of Appeal in WWF regarded an award of damages by reference to diminution of value or reinstatement costs as measuring the Claimant's due "by reference to identifiable financial loss": the problem arises when the application of the conventional measures of damage cannot provide adequate compensation. These and other statements of principle to which the Court was referred[20] show that the awarding of negotiation damages is a flexible and pragmatic response of the common law in circumstances where the application of its principles would otherwise lead to unjust under-compensation. None arose in circumstances where the deficit was attributable to the failure by the party claiming damages to pursue a conventional claim on established principles; and in none was it suggested that the damages might be awarded in substitution for a conventional award in circumstances where such an award would (or should) have been available. In theory, a claim for Wrotham Park or "negotiation" damages could have been made in conjunction with a claim for reinstatement costs if the facts of the case justified it; but I am extremely doubtful that the principles underpinning an award of such damages justify the bringing of a claim in substitution for the disallowed claim for reinstatement costs. On balance, while it is established that general damages for loss of amenity may be awarded to a Claimant in circumstances where the application of conventional principles for measuring damage to land would lead to under-compensation, I would conclude that English law does not recognise as an alternative approach to the quantification of damages for physical damage to land a head of general damages or damages at large in circumstances where it would (or should) have been open to a claimant to advance the claim by reference to diminution in value or reinstatement costs or both. I would also conclude that English law does not recognise as an alternative approach to quantification for physical damage to land a measure of "negotiation" damages based upon the putative negotiation that would have occurred between reasonable men if they had been able to foresee the damage that ensued. I would therefore refuse the Claimants permission to amend to the extent that the Revised Schedules, the 8 March 2013 Statement and the F&BPs advance a claim for compensation for the damage to the Claimants' land adopting as the measure of loss either general damages at large or Wrotham Park/negotiation damages as there set out and as set out above. That is my first reason for refusing permission. However, if I am wrong in my conclusion on the current state of the law, there are additional reasons why I refuse permission on the facts of this application. Exercising the Court's Discretion First, the Claimants formulation of the new claim fails substantially to comply with the requirement that pleadings and, in particular amendments should be formulated with clarity so that the opposing party and the Court may understand the case that is being advanced. As my review above shows, there is a serious lack of clarity in the F&BPs, largely because the material facts relied upon are matters that appear to be relevant to the admitted Moral Damages and Loss of Amenity Claim with no attempt either in the pleading or in submissions to differentiate between those that are relevant to the admitted claims or the proposed new claims. It is in my view inadequate simply to say that they are relevant to one or the other without specifying which. This failure leaves a pervasive uncertainty about how the Defendant and the Court is expected to approach the quantification of the proposed head of claim which is unfair to the Defendant and unsatisfactory for the Court. Second, the situation is exacerbated by the Claimants' approach to their proposed cross-checks. The first proposed cross-check is that "[the Court] could consider an upward revision of its multiplier in respect of future loss of productivity to take account of the matters which it has not, or not adequately, reflected in its assessment of the other heads of loss." This is, to my mind, unprincipled and lacking in coherence. On my reading of the F&BPs, the matters which it is alleged will not have been adequately reflected in the other heads of loss are those set out in the F&BPs. They typically include the anxiety and distress suffered by the Claimants during their lives and the lives of the pipeline. At present the productivity claims are calculated by reference to the expected life of the pipeline. I can see no principled basis upon which the Court could simply make an "upward revision of the multiplier in respect of loss of productivity" to reach appropriate compensation for the matters detailed in the F&BPs. If other matters are relied upon by the Claimants they are not coherently identified. The second suggestion is that the Court "could consider an award of damages on a "perpetuity" basis in place of a multiplier-based approach." What does this mean? Normally in the calculation of damages, an award on a perpetuity basis would be calculated by reference to multiplicands and multipliers. The Claimants do not explain how else this cross-check or bench-mark is to be calculated, computed or otherwise made up. Nor is it clear what is to be awarded on a perpetuity basis. It is evident that the personal Claimants themselves are not going to suffer loss in perpetuity. If this has meaning at all, it appears to involve an attempt to reach a present-day capitalisation of the permanent damage to the land, which opens the door to consideration of a diminution in value calculation and consideration of the relative merits and costs of reinstatement in order to assess the fairness and relevance of this proposed cross-check. The Claimants have provided worked examples of this perpetuity approach. It involves applying a multiplier of 40 to the total future annual losses. It therefore approximates to the loss of productivity claim but applying a multiplier of 40 in place of a multiplier calculated by reference to the balance of the expected life of the Claimant. Thus, contrary to what is said in the F&BPs, this cross check maintains a multiplier based approach but revises the allegedly appropriate multiplier to 40. Converted to pounds sterling, the calculation generates sums ranging from £6,079[21] to £3,586,795[22], which of itself raises questions about the usefulness of this approach as a cross-check because of the very wide spread of outcomes. All that can be said with confidence is that this brings into play considerations of reasonableness, which would need to be assessed by reference to matters such as the original value of the property, diminution in value, the cost of replacement land (including compensation for the facts associated with moving) and the relative cost of reinstatement. The third suggested cross-check is the negotiation damages approach. Again the Claimants have provided worked examples. The model applies a rate of compensation derived from the original compensation agreements to the area alleged to be damaged, subject to a discount of between 0-40% (differing for each claim) "for margin of error to be applied to damaged areas." The product of that equation is then multiplied by the number of quarter-years to date and projected forwards by reference to the Ogden Tables. A further discount of 50% is then applied. This calculation generates figures ranging from £66,029[23] to £1,523,575[24]. There is no obvious correlation between the results of the cross-check on a perpetuity basis and that on the negotiation damages basis. It is obvious that the Claimants' discounts for margins for error would need to be investigated in detail by the Defendant. The effect of applying the cross-checks and using the resulting figures as the upper limit of the Claimants' claims is shown by a table annexed by Mr Isted to his 7th Statement. For the cohort of 10 Lead Claimants in aggregate, the value of the total productivity losses that have previously formed the basis of their claims is £4,963,772. The effect of the total general damages claim in aggregate is to increase the value of the claims to £12,236,713. It is inevitable, therefore, that if the new claims were to be allowed, the Defendant would wish and be entitled to commit considerable resources to investigating and, if so advised, defending them. This leads directly to the issue of prejudice, which is the third substantial additional reason for refusing permission. The Claimants submit that the process of awarding the general damages for damage to land for which they contend involves the Court in doing no more than getting a "feel" for the proper level of compensation. They submit that the process is analogous to that undertaken in Scutt and, in other areas of the law of damages, in Jarvis v Swann Tours. On this basis, they submit that the proposed amendments would not give rise to the need for substantial further evidence. I reject this submission: i) It is quite unrealistic to expect the Court to get a "feel" and to convert that feeling into a monetary award in a vacuum. This is effectively acknowledged by the Claimants when proposing their cross-checks. Yet their proposed cross-checks cannot be implemented without resort to considerations which are not presently in play. For example, the Court would wish to test the suggested perpetuity basis against matters such as the original value of the land, the diminution in value caused by the damage, the prospect and cost of full or partial remediation, and the feasibility of relocation. If, as at present seems likely for at least some Lead Cases, the perpetuity basis would generate a claim that is substantially in excess of any of these measures, the validity of the perpetuity basis as a reasonable and fair approach to the assessment of damages would be called into question. The Claimants' Wrotham Park cross-check calculation raises precisely the same questions; ii) Even if the Claimants had not proposed their cross-checks, the conventional approaches to valuing damage to land would be relevant and important considerations for the Court when trying to get the "feel" for the appropriate level of compensation for damage to land in a region of Colombia with which the Court is not intimately familiar. It is no answer for the Claimants to submit that their cross-checks merely provide a range of figures for the Court's consideration, that range being from zero to the sum produced by the sample calculations. What is material is that the Claimants do not limit their claims within the range of figures provided. To the contrary they plead that "the Claimants do not seek to limit the court's powers to award whatever sums it considers to be appropriate", implying that the Court may be invited to award figures outside the range if it thinks appropriate. At the very least, the Claimants are proposing that the figures generated by their calculations are within the range that the Court might feel it appropriate to award. iii) I therefore accept the Defendant's submission that, in order to meet the proposed general damages claim on an equal footing with the Claimants, it must be entitled to carry out investigations so that it can place before the Court evidence about diminution in value, cost of replacement and cost of reinstatement. That would involve the instruction of experts who are not presently instructed and substantial further inspections of the Lead Claimants properties over and beyond those that have been undertaken or planned. Because of the constraints upon carrying out investigations in Colombia, which are detailed in the 2012 Judgment and in the 7th Witness Statement of Mr Isted (whose evidence on this topic I accept) I conclude that it is not possible for such investigations to be undertaken and evidence fairly gathered and presented to the Court under the current timetable. Neither party applies for a further adjournment of the trial. In that sense, the bringing forward of the disputed general damages claim involves a "late" application for permission to amend since there is not time in the very unusual circumstances applicable to this case for the new claim to be accommodated fairly in the time available. There are other real aspects of prejudice to the Defendant which would accrue if permission were granted, and which cannot be remedied by an order for costs, arising out of the fact that the Defendant conducted the litigation until June 2012 on the basis that the claim it had to meet was a claim for loss of productivity during the expected life of the pipeline: i) The original site investigations would have been conducted differently and with a view to different issues; ii) The Defendant engaged in the selection of Lead Cases by reference to the claim and the issues that the Claimants had raised. I accept the evidence of Mr Isted in his 7th Statement that, if the proposed general damages claim had been in issue, the Defendant would have taken the view that it necessitated an assessment of the cost of reinstatement, diminution in value, and replacement of land values; and that the Defendant would have taken those issues into account when selecting lead cases. It is not feasible now to revisit the selection of lead cases taking those issues into account; iii) Different or additional experts would have been engaged from the outset. In striking the balance between the desire to have all relevant and substantial issues in play and the factors that militate against the granting of permission, I exclude any consideration of the prospects of the Defendant recovering costs in the future. However, the balance falls decisively against the granting of permission for the reasons I have outlined above, which substantially echo the reasons given for disallowing the claim for cost of reinstatement by the Senior Master in the 2012 Judgment. I have borne in mind at all times that the trial date has slipped since the Senior Master carried out his assessment in the 2012 Judgment. For that reason I have considered the position afresh and with a view to the trial being held in the Autumn of 2014. Conclusion and the Way Forward For the reasons set out above I refuse permission to the Claimants to bring the claim, described as a claim for general damages for damage to the Claimants' land, as formulated in the Statement dated 8 March 2013 and the F&BPs. As I have said, a number of the facts and matters pleaded in the F&BPs appear to me to be potentially relevant to the existing claims for Moral Damages and Damages for Loss of Amenity. The Claimants shall within 28 days identify which of those facts and matters are relied upon in support of the existing claims and whether each fact and matter so identified is relied upon in support of the claim for (a) Moral Damages or (b) Loss of Amenity Damages or (c) both Moral Damages and Loss of Amenity damages. That can be done either by annotating the F&BPs or by extracting text from the F&BPs into a fresh document, in which case the F&BPs will fall away. If it wishes to respond to the Claimants' exercise, the Defendant may do so within 28 days of receiving it. Note 1   Lead Claimant 61    [Back] Note 2   Lead Claimant 82    [Back] Note 3   Note 7.0.2, White Book 2013 Vol 1, 324.    [Back] Note 4   See Swain Mason v Mills & Reeve LLP (Practice Note) [2011] EWCA Civ 14    [Back] Note 5   See for slightly greater detail McGregor on Damages 18th Edn. 1-029 – 1-031.    [Back] Note 6   HB/16/581-591    [Back] Note 7   This is the text as it was after amendment of [50] in October 2010. The amendments are not material for present purposes.    [Back] Note 8   [23.3.1]    [Back] Note 9    [23.3.4] pleads that “Due to the damage ... this has meant the Second Claimant will lose the opportunity to pass on his and his late broth’s asset ... to their children and/or close family members in a suitable condition as they would have been able to had the damage not been caused.”    [Back] Note 10   [23.3.2]    [Back] Note 11   [23.3.3]    [Back] Note 12   [23.3.5]    [Back] Note 13   [23.3.6]    [Back] Note 14   [23.3.7]    [Back] Note 15   [4.1]    [Back] Note 16   [4.3]    [Back] Note 17   [12]    [Back] Note 18   See Claimants’ Skeleton at [15] – [17].    [Back] Note 19   At 339d    [Back] Note 20   Pell Frischmann Engineering Ltd v Bow Valley Iran Ltd and ors [2009] UKPC Case Ref 45, in particular at [46-48]; Tamares (Vincent Square) Limited v Fairpoint Properties (Vincent Square) Limited [2007] EWHC 212 (Ch), in particular at [22]    [Back] Note 21   Lead Claimant 61    [Back] Note 22   Lead Claimant 10    [Back] Note 23   Lead Claimant 61    [Back] Note 24   Lead Claimant 93    [Back]

LORD JUSTICE LONGMORE: If parties to what is often called a distributorship agreement do business in different countries but do not expressly agree what law is to govern their contractual relationship, it is often difficult to decide what that law should be. That is the problem which arises in this case where the parties agree that they entered into a binding contract in November 1995 for the exclusive distribution in Germany, Switzerland and Austria by the German claimants ("Print Concept") of air-cooled drying systems to be made and supplied by the defendants, G.E.W. (EC) Ltd ("GEW"), who carry on business in England. The answer to the problem is said to be of importance because the contract has now terminated and, if German law governs the contract, GEW will have to pay an indemnity assessed as a proportion of the average contractual turnover while the contract lasted, whereas no such indemnity is said to be payable if the contract is governed by English law. An English court, like a German court, must answer the question "which law applies to the contract?" by reference to the Rome Convention, which was introduced into English law by the Contracts (Applicable Law) Act 1990. Article 4 of the Convention is headed "Applicable law in the absence of choice". It relevantly provides: "1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country. 2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration. However, if the contract is entered into in the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated. ... 5. Paragraph 2 shall not apply if the characteristic performance cannot be determined, and the presumptions in paragraphs 2, 3 and 4 shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country." Section 3(3) of the 1990 Act encourages the court to have regard to the Giuliano-Lagarde report on the Convention in the Official Journal of the Communities of 31st October 1980. That report makes it clear at page 20 that the law of characteristic performance "defines the connecting factor of the contract from the inside, and not from the outside by elements unrelated to the essence of the obligation such as the nationality of the contracting parties or the place where the contract was concluded." The authors, having observed that the concept of characteristic performance gives rise to no difficulty with unilateral contracts, state that in bilateral contracts the counter-performance of one of the parties in a modern economy usually takes the form of payment of money; the authors then say that that counter-performance will not be the characteristic performance and continue: "It is the performance for which the payment is due, i.e. depending on the type of contract, the delivery of goods... the provision of a service ... etc which usually constitutes the centre of gravity and the socio-economic function of the contractual transaction." For this reason the parties in this case have agreed that in an ordinary sale and purchase contract the law governing the contract will be that of the vendor's central administration or place of business. Nothing turns in the present appeal on the difference between the place of central administration or the place of business of either party. Since we are concerned here with a contract entered into in the course of trade, I will refer to the principal place of business of the relevant party, viz Germany or England, as the case may be. The 13th edition of Dicey and Morris, edited by Sir Lawrence Collins and others, informs its readers (page 1237) that the source of the expression "characteristic performance" is Swiss doctrine and develops the discussion of the concept by reference to examples to be found in Article 117 of the Swiss Private International Law Act of 1987. In paragraph 32-115 on page 1238, the editors say: "Swiss case-law provides more examples, including the case of a distribution agreement, where the characteristic performance has been held to be that of the vendor. But distribution agreements commonly involve reciprocal obligations other than the payment of money: the distributor of the goods may have an obligation to build up the market by advertising the goods, and using its best endeavours to market them. Such a case demonstrates the fragility of the concept of characteristic performance, and provides an example of a case where it may not be possible to determine it, or where it may be disregarded." Mr Justice David Steel, who was invited to decide the question of the applicable law as a preliminary issue in the court below, correctly observed that in this passage Sir Lawrence Collins had identified the fence which, by the time he came to page 16 of his judgment, that learned judge could no longer straddle. The judge determined two preliminary issues ordered to be tried by Langley J, but it is only the question of the applicable law which arises on this appeal. The agreement between the parties was an oral agreement and related to the manufacture, sale and distribution of drying systems which are used to dry printed material on printing presses. The particular system to which the agreement applies was called a narrow web system, and the products manufactured by GEW are thus sometimes called narrow web products as opposed to wide web products, which are also manufactured by GEW but are not the subject of the particular oral agreement with which this appeal is concerned. As it happened, the majority of the narrow web drying systems supplied pursuant to the oral agreement of 1995 were ultimately supplied to a manufacturer of printing presses in Germany called Arsoma Druckmaschinen GmbH. This supply was made pursuant to a tripartite written delivery and purchase agreement made on 24th June 1996 between Print Concept, GEW and Arsoma. It is, however, not the law of that agreement but the law of the antecedent oral agreement which has to be determined for the purpose of this appeal. Outline Submissions For Print Concept Mr Michael Briggs QC's main submission was that the antecedent oral agreement was a contract whereby, in return for GEW agreeing that Print Concept were to have exclusive rights of distribution in Germany, Switzerland and Austria, Print Concept impliedly agreed to use their best endeavours to promote GEW's products in those territories. He then submitted that the performance of that "best endeavours" obligation was the performance which was characteristic of the contract, and that it was Print Concept who were to effect that performance. Print Concept's principal place of business was Germany so the contract was governed by the law of Germany. Mr. Plender QC for GEW accepted that there was an oral distribution agreement which was antecedent to the Arsoma agreement, and that that was a binding contract between GEW and Print Concept. He also accepted that there was a promise by GEW that Print Concept was to have exclusive rights of distribution in Germany, Switzerland and Austria and, probably, that there was an implied obligation on Print Concept to use their best endeavours to promote GEW's product in the territories. But he submitted that that was not the sum total of the parties' obligations because there was also an agreement that if Print Concept could find customers who wanted the product and were prepared to order it, at any rate in a not excessive quantity, GEW agreed that they would supply the product to Print Concept and Print Concept agreed that they would pay for it at a reasonable price. He therefore supported the judge's conclusion that the real substance of the contract (and thus the characteristic performance) was the sale and delivery of the systems for which Print Concept had been given exclusive distribution rights. The Contract In order to determine the performance which is characteristic of a contract one has to know what the terms of the contract are. When a contract is an informal and oral but nevertheless binding agreement, it may be difficult to discover the terms. Much may well be implied rather than express and the parties may intend that any gap be left for the court to fill, as necessary: see, for example, Hillas v Arcos (1932) 147 LT 503. In the present case one needs to know something of the background to the agreement before ascertaining its terms. Before 1995 Mr. Jurgen Welle, now the owner and managing director of Print Concept, had been the sole distributor in Germany for a company called Spectral Limited, which also manufactured and sold drying systems for use in the printing industry. Mr Malcolm Rae, now the managing director of GEW, was originally employed by Spectral as a technical manager, and in that capacity got to know Mr Welle quite well. In about April 1991 Mr Rae left Spectral and set up GEW starting his business from home. Mr. Welle lent him some initial capital which was soon repaid out of the first two or three sales of small driers to German buyers which were made with Mr. Welle's help. One of Spectral's customers in Germany was Arsoma and it was Mr. Welle who had introduced Arsoma to Spectral. Mr. Rae would have liked Mr Welle to act as his distributor in Germany but Mr Welle was committed to Spectral. Mr. Rae therefore appointed another distributor on behalf of GEW in German-speaking countries. GEW supplied equipment to that distributor, Karl Baier, and Mr Baier would then sell the products in Germany at his own prices. In due course Spectral was sold to an American company and Mr Welle decided to leave Spectral, and since Mr Rae had (as Mr. Welle put it) always asked Mr Welle to work more closely with him, he (Mr Welle) agreed to be GEW's exclusive distributor of GEW's narrow web products in Germany, Austria and Switzerland. The agreement began on 1st March 1995 and was wholly informal, but the way it worked was (as with Mr Baier) that GEW would supply its equipment to Mr Welle at an agreed price and Mr Welle would resell for whatever price he could get. Mr Welle further agreed not to sell narrow web systems manufactured by anyone other than GEW and GEW agreed they would not sell direct to any customer in the German-speaking territories. The narrow web systems were made to order, which meant that a customer specification was usually required before the systems were created. Mr Welle would be responsible for producing that specification but Mr. Rae was (according to his own evidence) involved in the vast majority of prospective orders directly with the end user in relation to the specification. GEW would then give its quotation to Mr Welle in sterling and Mr Welle would quote his own price to the customer in Deutschmarks. Since it was a made-to-order product of a technical nature, GEW would frequently be involved when the time came for the product to be installed on the customer's machines. Of the position between them at this stage Mr Welle stated: "If I did not arrange the sale of a sufficient number of systems I believe that GEW would have been justified in ending the arrangement." In the next sentence of his witness statement, he says that he founded the company Print Concept GmbH in November 1995 in order to carry out the exclusive sales from GEW. Mr Welle became the owner and managing director of Print Concept but the initial arrangements, made with him individually, continued as before. The next material event was that Arsoma started to require GEW products. There is some (irrelevant for present purposes) debate about how the introduction came about but it was formalized in the tripartite "Delivery and Purchase Agreement" of 24th June 1996 which I have already mentioned. By this agreement Arsoma undertook to equip the printing machines which it manufactured with GEW's drying systems and to purchase those drying systems exclusively through Print Concept. Print Concept and GEW agreed not to supply Arsoma's customers with the GEW drying systems directly or indirectly. Price and terms of delivery were to be agreed between Print Concept and Arsoma before the beginning of each year, the agreement was to apply until 31st December 1997 and was automatically renewable for a further two years unless terminated no less than six months prior to the expiry date. Before the judge it was common ground that the earlier distribution agreement and the tripartite Arsoma contract stood or fell together so far as their governing law was concerned. Although the judge does not expressly say so, his conclusion that the distribution agreement was governed by English law may well have been influenced by the existence of the later Arsoma contract which, because it was in terms a sale and purchase agreement, would be governed by English law as the principal place of business of the vendor, who was the party effecting the performance which was characteristic of that contract. Before the judge Print Concept's then counsel argued that both the distribution agreement and the Arsoma agreement were governed by German law. Mr Briggs, however, accepted that the Arsoma contract was governed by English law because the characteristic performance was that of the vendor; he accordingly withdrew previous counsel's concession that the contracts must be governed by the same law. He emphasised the fact that the distribution agreement preceded the Arsoma agreement and must have had its own law from the date of inception, regardless of the fact that an English law "delivery and purchase agreement" was made subsequently. It is for that reason that I have felt it necessary to set out at some length the largely uncontroversial history of how the distribution agreement came into existence. On the basis of that history, what were its terms? First, it was expressly agreed that Mr Welle and later his company were to have the exclusive right to distribute GEW's narrow web systems in Germany, Switzerland and Austria. I draw no distinction between Mr Welle and his company and therefore refer to the company as if it were party to the agreement throughout, while appreciating that the contract sued upon by Print Concept only came into existence in November 1995 (probably by way of novation of the original contract). Secondly, it was expressly agreed that Print Concept would not sell any other company's narrow web systems in the territories. Thirdly, it was agreed (probably by conduct rather than express oral discussion) that the mechanism of the arrangement was to be a sale by GEW to Print Concept and an on-sale by Print Concept to the customer. It was thus a principal to principal transaction rather than an agency on commission transaction. Beyond that, were there any implied terms? I have already referred to Mr Welle's view that if he did not arrange a sufficient number of sales, GEW would be entitled to end the arrangement. The judge did not come to a final view about this, saying merely that there was no such express obligation, while acknowledging that there may have been some such implied obligation. Mr Briggs submitted not merely that there was indeed such an implied obligation but that it was the performance of that obligation which was characteristic of the contract. The formulation which Mr Briggs proposed was that Print Concept was under an obligation to use its best endeavours to maximise sales in the German-speaking market place. Mr Briggs' primary submission was that there was no need for any other implied obligations in the contract. He submitted in the alternative that, if there was any other implied obligation, it could not be an obligation, the performance of which was characteristic of the contract. Mr. Plender did not strongly oppose Mr Briggs' implied term but contended that, if such a term was to be implied, it would be necessary to imply some other term about responsibility for supplying the products if they were ordered, otherwise Mr Briggs' term was hopelessly one-sided. We were thus treated to the unusual spectacle in this court of counsel enthusiastically suggesting that each of their respective clients should be subject to comparatively onerous implied obligations over and above what their clients had expressly agreed. Mr Plender's formulation of the implied term, to which GEW were subject, was that GEW would make available for distribution a commercially viable volume of products at a reasonable price whenever Print Concept were in a position to purchase and distribute them. For my part, I would accept that the contract did contain Mr. Briggs' implied term, since the purpose of the contract could hardly be promoted if Print Concept did nothing to try to achieve sales in its territories. But I think that Mr. Plender was also correct in submitting that there would have to be a concomitant obligation on GEW to supply products as and when asked to do so, because the purpose of the contract could not be promoted in the absence of any such term any more than in the absence of Mr Briggs' term. In this context it is important to remember that the relationship of exclusive distributor had been established some months before Print Concept had been incorporated and took over Mr Welle's responsibilities. During that time narrow web products had been supplied to Mr. Welle and Mr Welle had sold them on. It must have been the contemplation of both GEW and Print Concept, when Print Concept took over Mr Welle's position in November 1995, not merely that that supply would continue but that it would continue in the same form, namely that of a sale by GEW to Print Concept and an on-sale by Print Concept to the German-speaking customer. The judge went so far as to say, not merely that there were reciprocal obligations in the form of a sale of the drying systems by the defendant and a purchase of them by the plaintiff, but that they were express reciprocal obligations. I do not find it possible to go so far as to say on the evidence that the obligations were express reciprocal obligations, since neither witness is saying that there were express oral terms to that effect, but I do consider that there was an implied obligation on GEW in some such formulation as that suggested by Mr Plender. I would myself prefer to formulate the term in these words: "As and when reasonably required by Print Concept GEW will supply and Print Concept will purchase the products the subject matter of our agreement at a price on the price list for the current year or at a price to be otherwise agreed." This is in substance the same term as that for which Mr Plender contended but perhaps has the advantage of emphasising the reciprocity of the sale and purchase obligation which I (like the judge) consider to be of importance. Party effecting characteristic performance. Now that the terms of the contract have been ascertained, which party is the one who, in the words of Article 4(2), "is to effect the performance which is characteristics of the contract"? Mr Briggs submitted that the real and indeed only purpose of the contract was to penetrate the German-speaking market. He claimed that GEW's junior counsel had conceded as much in the court below when, almost at the beginning of the oral evidence of the first witness, Mr Welle, and well before any detailed submissions could have been made, he objected to a question from Mr. Randolph, then, but not now, appearing for Print Concept. Mr. Randolph asked Mr Welle why GEW had been unable, before Mr Welle came on the scene, to penetrate the German market. GEW's counsel said that, if the court were to go into that, it would mean trying the whole case rather than the preliminary issues ordered by Langley J, no doubt because Mr. Rae did not accept that GEW had been unable to penetrate the German-speaking market before Mr. Welle agreed to become GEW's exclusive distributor. The judge upheld the objection but before he did so said: "It seems to me that this perhaps is an argument of modest significance. I do not believe, as presently advised, that there is any controversy in the description that the purpose of the agreement was for Print Concept to distribute systems within the German-speaking market. I am bound to say at the moment why they [by which the judge meant GEW] had been unable to penetrate that market other than through the assistance of this particular claimant does not seem to me to help me." Counsel said that he did not disagree with that for a moment. If Mr. Briggs were seeking to hold GEW to a binding concession made by GEW's counsel, different in kind from the concession of Mr. Randolph already mentioned in relation to the oral agreement and the Arsoma agreement having a common law, I would decide that counsel's assent was confined to the third sentence of the judge in the passage I have quoted rather than the second sentence. But this would be ridiculously formalistic. The question is not to be decided on the basis of throwaway remarks by counsel during the evidence, but by an even-handed examination of all the evidence once it is given. Giving that even-handed consideration to the evidence before him, the judge concluded that the real substance of the arrangements between the parties was that: "There has taken place a series of orders for drying systems under the terms of the oral facility ... supplemented and indeed effectively dominated by the Arsoma contract ... The case falls fairly and squarely within the category of bilateral contracts whose performance by one of the parties takes the form of payment of money. Indeed, one cannot help but notice that the Arsoma contract is indeed called a 'delivery and purchase agreement'. Accordingly in my judgment the characteristic performance of the contracts is that of the vendor and, accordingly, English law applies." Mr. Briggs criticised this approach of the judge because he relied on the Arsoma contract to come to his conclusion when that contract came into existence only after the oral distributorship agreement. I would comment that, since the parties were agreed at that stage that the distributorship agreement and the Arsoma agreement had the same law, the judge can hardly be criticised for the approach he adopted. But now that concession is withdrawn and the focus is solely on the distributorship agreement, Mr Briggs' point is well made. It is necessary to determine the law which governed the distributorship agreement as at November 1995. So I stand back and ask myself the question, who was the party in 1995 who was to effect the performance which was characteristic of the contract? As it seems to me, the "real meat" of the arrangement of that date, to adopt the phrase of Messrs Forsyth and Moser in their useful article entitled The Impact of the Applicable Law of Contract on the Law of Jurisdiction under the European Conventions (1996) 45 ICLQ 190, was the supply of the products rather than the penetration of the German market. No doubt they were both important; but the penetration of the German market could not even take place without the supply and purchase of the drying systems, and it was the performance of that supply obligation (which usually included vetting the specification and helping to instal the equipment sold) which was, in my judgment, characteristic of what was a distributorship agreement intended to be fulfilled by individual contracts of sale and purchase. Mr. Briggs sought to dismiss the fact that the distributorship agreement would be implemented by individual contracts of sale and purchase as a fact of little importance and, indeed, as showing that the essence of the oral distributorship agreement must have been not sale and purchase, which would happen in the future, but the only other obligation of substance, viz to use best endeavours to penetrate the German-speaking market. But it is not appropriate to separate the obligations in this way. The global picture must be assessed, and in that global picture it is of the essence that the parties contemplated that the agreement would be performed by the making of sale and purchase contracts which would almost inevitably, under Rome Convention principles, be governed by the law of the vendor. This is not to fall into the error of using a later contract to govern the law of an earlier contract; it is to accept the good sense of saying that the essential characteristic of the particular distributorship agreement before us was the intended supply and purchase of narrow web products, pursuant to the implied term for which Mr Plender contended. The party who was to effect that characteristic performance was of course GEW and English law therefore governs the agreement. I should add that we were referred to authorities in the courts of Germany, Holland and Scotland but, speaking for myself, I did not find those authorities of assistance, since they dealt with different contracts in different terms. It is therefore possible to decide this appeal on the basis of the presumption in Article 4(2) of the Convention without reference to the fallback position adopted by Article 4(5). As to that, I will only say that if I did feel it necessary to refer to that paragraph of Article 4, and to ascertain with what country the contract was most closely connected pursuant to Article 4(1), I would, like the judge, conclude that the contract was most closely connected with England in any event. I would dismiss this appeal. SIR CHRISTOPHER SLADE: I agree. LORD JUSTICE TUCKEY: I also agree. Order: Appeal dismissed; detailed assessment; permission to appeal to House of Lords refused.

Judgment of the Court of 16 June 1981. - Maria Salonia v Giorgio Poidomani and Franca Baglieri, née Giglio. - Reference for a preliminary ruling: Tribunale civile e penale di Ragusa - Italy. - Competition: newspaper distributors. - Case 126/80. European Court reports 1981 Page 01563 Swedish special edition Page 00129 Finnish special edition Page 00133 Spanish special edition Page 00385 Summary Parties Subject of the case Grounds Decision on costs Operative part Keywords 1 . REFERENCES FOR A PRELIMINARY RULING - JURISDICTION OF THE COURT - LIMITS - ASSESSMENT OF RELEVANCE OF QUESTIONS RAISED - CONDITIONS ( EEC TREATY , ART . 177 ) 2 . REFERENCES FOR A PRELIMINARY RULING - BRINGING A MATTER BEFORE THE COURT - QUESTION RAISED BY NATIONAL COURT OF ITS OWN MOTION - PERMISSIBILITY ( EEC TREATY , ART . 177 ) 3 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PROHIBITION - CONDITIONS - EFFECT ON TRADE BETWEEN MEMBER STATES - ADVERSE EFFECT ON COMPETITION ( EEC TREATY , ART . 85 ( 1 )) 4 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - EFFECT ON TRADE BETWEEN MEMBER STATES - EXCLUSIVE DISTRIBUTION AGREEMENT EXTENDING THROUGHOUT NATIONAL TERRITORY - AGREEMENT RESTRICTED TO DISTRIBUTION OF NATIONAL PRODUCTS - APPRECIABLE EFFECT ON TRADE ( EEC TREATY , ART . 85 ( 1 )) 5 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - EFFECT ON THE MARKET - EXCLUSIVE DISTRIBUTION AGREEMENT EXTENDING THROUGHOUT NATIONAL TERRITORY - AGREEMENT RESTRICTED TO DISTRIBUTION OF NATIONAL NEWSPAPERS AND PERIODICALS - APPRECIABLE EFFECT ON THE MARKET - CRITERIA ( EEC TREATY , ART . 85 ( 1 )) 6 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - DOMINANT POSITION - SELECTIVE DISTRIBUTION AGREEMENT - PERMISSIBILITY - CONDITIONS - OBJECTIVE AND UNIFORM CRITERIA ( EEC TREATY , ARTS 85 ( 1 ) AND 86 ) 7 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PROHIBITION - EXEMPTION - BLOCK EXEMPTION - EXCLUSIVE DISTRIBUTION AGREEMENT BETWEEN TRADE UNION ASSOCIATIONS - EXEMPTION PRECLUDED ( EEC TREATY , ART . 85 ( 3 ); REGULATION NO 19/65 OF THE COUNCIL , ART . 1 ; REGULATION NO 67/67 OF THE COMMISSION , ART . 1 ) Summary 1 . ARTICLE 177 OF THE EEC TREATY , WHICH IS BASED ON A DISTINCT SEPARATION OF FUNCTIONS BETWEEN NATIONAL COURTS AND THE COURT OF JUSTICE , DOES NOT ALLOW THE LATTER TO CRITICIZE THE REASONS FOR THE REFERENCE . CONSEQUENTLY , A REQUEST FROM A NATIONAL COURT MAY BE REJECTED ONLY IF IT IS QUITE OBVIOUS THAT THE INTERPRETATION OF COMMUNITY LAW OR THE EXAMINATION OF THE VALIDITY OF A RULE OF COMMUNITY LAW SOUGHT BY THAT COURT BEARS NO RELATION TO THE ACTUAL NATURE OF THE CASE OR TO THE SUBJECT-MATTER OF THE MAIN ACTION . 2 . IN PROVIDING THAT A REFERENCE FOR A PRELIMINARY RULING MAY BE SUBMITTED TO THE COURT WHERE ' ' A QUESTION IS RAISED BEFORE ANY COURT OR TRIBUNAL OF A MEMBER STATE ' ' , THE SECOND AND THIRD PARAGRAPHS OF ARTICLE 177 OF THE EEC TREATY ARE NOT INTENDED TO RESTRICT THIS PROCEDURE EXCLUSIVELY TO CASES WHERE ONE OR OTHER OF THE PARTIES TO THE MAIN ACTION HAS TAKEN THE INITIATIVE OF RAISING A POINT CONCERNING THE INTERPRETATION OR THE VALIDITY OF COMMUNITY LAW , BUT ALSO EXTEND TO CASES WHERE A QUESTION OF THIS KIND IS RAISED BY THE NATIONAL COURT OR TRIBUNAL ITSELF WHICH CONSIDERS THAT A DECISION THEREON BY THE COURT OF JUSTICE IS ' ' NECESSARY TO ENABLE IT TO GIVE JUDGMENT ' ' . 3 . AN AGREEMENT WHICH MAKES IT POSSIBLE TO FORESEE , ON THE BASIS OF ALL THE OBJECTIVE FACTORS OF LAW OR OF FACT , WITH A SUFFICIENT DEGREE OF PROBABILITY THAT IT MAY HAVE AN INFLUENCE , DIRECT OR INDIRECT , ACTUAL OF POTENTIAL , ON THE PATTERN OF TRADE BETWEEN MEMBER STATES IN SUCH A WAY THAT IT MIGHT HINDER THE ATTAINMENT OF THE OBJECTIVES OF A SINGLE MARKET BETWEEN STATES AND WHICH HAS AS ITS OBJECT OR EFFECT THE RESTRICTION OR DISTORTION OF COMPETITION WITHIN THE COMMON MARKET , COMES WITHIN THE PROHIBITION LAID DOWN BY ARTICLE 85 ( 1 ) OF THE EEC TREATY . 4 . AN AGREEMENT PROVIDING FOR THE EXCLUSIVE DISTRIBUTION OF NATIONAL PRODUCTS ON THE TERRITORY OF A MEMBER STATE AND INVOLVING , INTER ALIA , THE APPLICATION OF A SELECTIVE DISTRIBUTION CLAUSE WHEREBY ONLY APPROVED RETAILERS HAVE ACCESS TO SUPPLIES MAY , BY ITS VERY NATURE , HAVE THE EFFECT OF REINFORCING THE PARTITIONING OF THE MARKET ON A NATIONAL BASIS , THEREBY IMPEDING THE ECONOMIC INTERPENETRATION WHICH THE TREATY IS DESIGNED TO BRING ABOUT AND PROTECTING NATIONAL PRODUCTION . EVEN IF THE SOLE SUBJECT-MATTER OF THE AGREEMENT IN QUESTION IS THE DISTRIBUTION OF NATIONAL PRODUCTS AND THE AGREEMENT IS NOT CONCERNED WITH THE DISTRIBUTION OF SIMILAR PRODUCTS FROM OTHER MEMBER STATES , A CLOSED-CIRCUIT DISTRIBUTION SYSTEM APPLYING TO MOST OF THE SALES OUTLETS FOR NATIONAL PRODUCTS ON NATIONAL TERRITORY MAY , WHEN THOSE OUTLETS ARE AT THE SAME TIME THOSE WHERE PRODUCTS FROM OTHER MEMBER STATES ARE NORMALLY SOLD , ALSO HAVE REPERCUSSIONS ON THE DISTRIBUTION OF THOSE PRODUCTS . SUCH AN AGREEMENT IS THEREFORE CAPABLE OF AFFECTING , AS FAR AS THE PRODUCTS IN QUESTION ARE CONCERNED , TRADE BETWEEN MEMBER STATES . HOWEVER , IT ESCAPES THE PROHIBITION LAID DOWN BY ARTICLE 85 ( 1 ) OF THE EEC TREATY IF IT HAS NO APPRECIABLE EFFECT ON SUCH TRADE . 5 . IN THE CASE OF NEWSPAPERS AND PERIODICALS , AN ASSESSMENT OF THE APPRECIABILITY OF THE EFFECTS WHICH A DISTRIBUTION AGREEMENT MAY HAVE IN THE TERRITORY OF A MEMBER STATE ON THE MARKET IN SUCH PUBLICATIONS FROM OTHER MEMBER STATES IS STRICTER THAN IN THE CASE OF OTHER PRODUCTS . IN ORDER TO DETERMINE WHETHER AN EXCLUSIVE DISTRIBUTION AGREEMENT FOR NATIONAL NEWSPAPERS AND PERIODICALS IS CAPABLE OF HAVING AN APPRECIABLE EFFECT ON THE MARKET IN SUCH PUBLICATIONS FROM OTHER MEMBER STATES , IT IS NECESSARY TO CONSIDER FIRST WHETHER THAT MARKET MAY EMPLOY FOR THE SALE OF NEWSPAPERS IN THE AREA CONCERNED , CHANNELS OF DISTRIBUTION OTHER THAN THOSE GOVERNED BY THE AGREEMENT AND , SECONDLY , WHETHER DEMAND FOR THE AFORESAID PRODUCTS IS RIGID INASMUCH AT IS SHOWS NO SUBSTANTIAL VARIATIONS AS A RESULT OF THE ENTRY INTO FORCE AND THE TERMINATION OF THE AGREEMENT IN QUESTION . 6 . A SELECTIVE DISTRIBUTION CLAUSE RESTRICTING THE SUPPLY OF THE PRODUCTS COVERED BY THE AGREEMENT IN QUESTION TO APPROVED LICENCE-HOLDERS ALONE DOES NOT INFRINGE ARTICLE 85 ( 1 ) OR THE FIRST PARAGRAPH OF ARTICLE 86 OF THE EEC TREATY IF IT APPEARS THAT THE AUTHORIZED RETAILERS ARE SELECTED ON THE BASIS OF OBJECTIVE CRITERIA RELATING TO THE CAPACITY OF THE RETAILER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES ON CONNEXION WITH THE REQUIREMENTS FOR THE DISTRIBUTION OF THE PRODUCT AND THAT SUCH CRITERIA ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RETAILERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION . 7 . AN EXCLUSIVE DISTRIBUTION AGREEMENT CONCLUDED BETWEEN TRADE-UNION ASSOCIATIONS , EACH OF WHICH HAS A LARGE MEMBERSHIP , DOES NOT CONSTITUTE AN AGREEMENT ' ' TO WHICH ONLY TWO UNDERTAKINGS ARE PARTY ' ' WITHIN THE MEANING OF ARTICLE 1 ( 1 ) OF REGULATIONS NOS 19/65 AND 67/67 AND DOES NOT THEREFORE COME WITHIN THE CATEGORIES OF AGREEMENTS WHICH , UNDER THE AFORESAID REGULATIONS , MAY BE EXEMPTED FROM THE APPLICATION OF ARTICLE 85 ( 1 ) OF THE EEC TREATY . Parties IN CASE 126/80 REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNALE CIVILE , RAGUSA , FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN MARIA SALONIA , RAGUSA , AND GIORGIO POIDOMANI , RAGUSA , FRANCA BAGLIERI , NEE GIGLIO , RAGUSA , Subject of the case ON THE INTERPRETATION OF ARTICLES 85 AND 86 OF THE EEC TREATY , Grounds 1 BY ORDER OF 12 MAY 1980 , RECEIVED AT THE COURT ON 27 MAY 1980 , THE TRIBUNALE CIVILE , RAGUSA , REFERRED TO THE COURT , UNDER ARTICLE 177 OF THE EEC TREATY , SEVERAL PRELIMINARY QUESTIONS ON THE INTERPRETATION OF THE PROVISIONS OF THE TREATY RELATING TO COMPETITION AND , IN PARTICULAR , OF ARTICLE 85 , IN ORDER TO ENABLE IT TO ASSESS THE COMPATIBILITY WITH THE REQUIREMENTS OF THE TREATY OF CERTAIN CLAUSES CONTAINED IN THE NATIONAL AGREEMENT REGULATING THE RESALE OF DAILY NEWSPAPERS AND PERIODICALS ( HEREINAFTER REFERRED TO AS ' ' THE NATIONAL AGREEMENT ' ' ) CONCLUDED ON 23 OCTOBER 1974 BETWEEN THE ITALIAN FEDERATION OF NEWSPAPER PUBLISHERS ( FEDERAZIONE ITALIANA EDITORI GIORNALI ) AND THE UNITED FEDERATION OF TRADE UNIONS OF NEWSAGENTS ( FEDERAZIONE SINDACALE UNITARIA GIORNALAI ). 2 THESE QUESTIONS WERE RAISED IN CONNEXION WITH A DISPUTE BETWEEN THE HOLDER OF A LICENCE ISSUED BY THE ADMINISTRATIVE AUTHORITIES FOR THE RETAIL SELLING OF NEWSPAPERS AND PERIODICALS IN GENERAL AND THE PROPRIETORS OF THE WAREHOUSES FOR THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS IN RAGUSA , CONCERNING THE REFUSAL OF THE LATTER IN 1978 TO DELIVER NEWSPAPERS AND PERIODICALS TO THE SAID LICENCE-HOLDER . 3 IN SUPPORT OF THEIR REFUSAL , THE WAREHOUSE PROPRIETORS CONTENDED THAT THEY WERE UNDER NO OBLIGATION TO SUPPLY NEWSPAPERS AND PERIODICALS TO HOLDERS OF A RETAIL-SELLING LICENCE ISSUED BY THE ADMINISTRATIVE AUTHORITIES SINCE SUCH A LICENCE AFFORDS LICENCE-HOLDERS NO MORE THAN A POSSIBILITY OF BEING SUPPLIED . THEY MAINTAINED THAT AT THE TIME THE DISTRIBUTION SYSTEM FOR NEWSPAPERS AND PERIODICALS IN ITALY WAS GOVERNED BY THE ABOVE-MENTIONED NATIONAL AGREEMENT AND THAT THE PLAINTIFF IN THE MAIN ACTION DID NOT MEET THE REQUIREMENTS OF ARTICLE 2 OF THAT AGREEMENT . THEY EMPHASIZED IN THIS CONNEXION THAT UNDER THAT PROVISION , IN COMMUNES WITH OVER 2 500 INHABITANTS , PUBLISHERS MIGHT SUPPLY THEIR PUBLICATIONS FOR SALE ONLY TO HOLDERS OF A LICENCE ISSUED BY AN INTER-REGIONAL JOINT COMMITTEE WHICH ENTITLES THEM TO RECEIVE FROM THE DISTRIBUTORS PUBLICATIONS INTENDED FOR SALE . 4 THE TRIBUNALE CIVILE , RAGUSA , HEARING THE CASE AT FIRST INSTANCE , TOOK THE VIEW , ON THE BASIS OF JUDGMENT NO 2387 OF 4 SEPTEMBER 1962 OF THE COURT OF CASSATION , THAT THE BEFORE-MENTIONED RULES WERE NOT CONTRARY TO ITALIAN DOMESTIC LAW AND , IN PARTICULAR , WERE NOT CONTRARY TO THE PROVISIONS OF ARTICLE 2598 OF THE CIVIL CODE . HOWEVER , IT DID NOT RULE OUT THE POSSIBILITY THAT THE CLAUSES OF THE NATIONAL AGREEMENT PROHIBITING PUBLISHERS OF NEWSPAPERS AND PERIODICALS FROM DELIVERING THESE PRODUCTS TO SELLERS WHO HAD NOT OBTAINED THE TRADE LICENCES MIGHT PROVE TO BE INCOMPATIBLE WITH THE RULES OF COMPETITION CONTAINED IN THE EEC TREATY AND IN ORDER TO CLARIFY THIS POINT IT REFERRED THE FOLLOWING QUESTIONS TO THE COURT : ' ' 1 . DOES THE NATIONAL AGREEMENT OF 23 OCTOBER 1974 REGULATING THE RESALE OF DAILY NEWSPAPERS AND PERIODICALS CONSTITUTE A NATIONAL AGREEMENT PROTECTING THE MARKET IN THE DISTRIBUTION AND SALE OF ALL TYPES OF NEWSPAPERS , NATIONAL AND FOREIGN , IS IT AN INFRINGEMENT OF THE PROHIBITION ON AGREEMENTS LAID DOWN BY ARTICLE 85 OF THE TREATY AND , HAVING REGARD TO THE SPECIAL PROVISIONS GOVERNING ADMISSION TO THE NEWSPAPER TRADE , THE MINIMUM REQUIREMENTS , THE OBLIGATIONS AND PENALTIES IMPOSED UPON RETAILERS , DOES THE AGREEMENT LEAD TO A DISTORTION OF THE CONDITIONS OF COMPETITION? 2 . IS NOT THE SAID AGREEMENT INCOMPATIBLE WITH AND DOES IT NOT THEREFORE COME WITHIN THE PROHIBITION LAID DOWN BY ARTICLE 85 ( 1 ) OF THE TREATY TO THE EXTENT TO WHICH IT CREATES DISCRIMINATION AGAINST RETAILERS , IN SPITE OF THE PROPER LICENCE FOR THE SALE OF NEWSPAPERS ISSUED TO THEM BY THE COMPETENT ADMINISTRATIVE AUTHORITY , MERELY BECAUSE THEY DO NOT AGREE TO OBTAIN A LICENCE TO ENGAGE IN THE RETAIL TRADE , THE ISSUE OF WHICH IS , UNDER THE PROVISIONS OF THE SAID AGREEMENT , LEFT TO THE DISCRETION OF THE INTER-REGIONAL JOINT COMMITTEES ( AND NOW THE NATIONAL COMMITTEE FOR THE DISTRIBUTION OF DAILY NEWSPAPERS AND PERIODICALS ( COMMISSIONE NAZIONALE PER LA DIFFUSIONE DEI QUOTIDIANI E PERIODICI)? 3 . DOES NOT THE AGREEMENT INTERFERE WITH FREEDOM OF COMPETITION , IN WHICH THE CHOICE EXPRESSED BY CONSUMERS DETERMINES THE NUMBER OF SALES OUTLETS FOR NEWSPAPERS , IN THE SAME WAY AS THE RULES REGULATING THE MARKET APPLIED BY THE NETHERLANDS ASSOCIATION OF DEALERS IN BICYCLES AND RELATED GOODS , WHICH CONTAIN PRINCIPLES AND RESTRICTIONS SIMILAR TO THOSE OF THE AGREEMENT ON DAILY NEWSPAPERS AND WHICH WERE PROHIBITED BY THE COMMISSION ( DECISION OF 2 DECEMBER 1977 , OFFICIAL JOURNAL L 20 OF 25 JANUARY 1978)? 4 . MAY THE CLAUSES PROHIBITING SUPPLY FOR SALE , CONTAINED IN ARTICLE 2 OF THE AGREEMENT IN QUESTION AND ARTICLE 1 OF THE RULES GOVERNING THE FUNCTIONING OF THE JOINT COMMITTEES , BE REGARDED AS SATISFYING OBJECTIVE CRITERIA SUCH AS TO PRECLUDE ANY ABUSE AND MAY THEY BE EXEMPTED UNDER ARTICLE 85 ( 3 ) EVEN IF THEY WERE LAID DOWN FOR THE PURPOSE OF CONTRIBUTING TO AN IMPROVEMENT IN DISTRIBUTION? 5 . DOES THE FACT THAT SUPPLIES ARE CUT OFF FROM RETAILERS WHO , LIKE MRS SALONIA , HAVE NOT OBTAINED THE LICENCE REQUIRED BY THE SAID AGREEMENT , THUS PREVENTING SUCH CATEGORIES OF PERSONS FROM OBTAINING THE PRODUCTS FOR SALE IN ANOTHER WAY , PRECLUDE RELIANCE UPON THE EXEMPTION PROVIDED FOR BY REGULATIONS 19 AND 67 AND , IF SUCH EXEMPTION HAS BEEN GRANTED , DOES THAT FACT NOT LEAD TO AN ASSUMPTION THAT THE BENEFIT THEREOF HAS BEEN REVOKED? 6 . DOES NOT THE CONDUCT LAID DOWN IN AND GOVERNED BY THE AGREEMENT IN QUESTION CONSTITUTE AN ABUSE OF A DOMINANT POSITION? ' ' THE JURISDICTION OF THE COURT 5 THE DEFENDANTS IN THE MAIN ACTION ALLEGE THAT IN THE PRESENT CASE THE COURT HAS NOT BEEN VALIDLY SEISED , UNDER ARTICLE 177 OF THE TREATY , OF A REQUEST FOR A PRELIMINARY RULING . THEY MAINTAIN , IN THE FIRST PLACE , THAT THE QUESTIONS REFERRED TO THE COURT BEAR NO RELATION TO THE REAL SUBJECT-MATTER OF THE DISPUTE SINCE NEITHER THE PLAINTIFF NOR THE DEFENDANTS HAVE RELIED ON ANY RULE OF COMMUNITY LAW IN SUPPORT OF THEIR ARGUMENTS . THEY CONTEND , MOREOVER , THAT THE QUESTIONS SUBMITTED RELATE TO AN AGREEMENT TO WHICH NONE OF THE PARTIES TO THE CASE IS A SIGNATORY . FINALLY , THEY POINT OUT THAT THE INTERPRETATION OF THE TREATY SOUGHT BY THE NATIONAL COURT SERVES NO USEFUL PURPOSE SINCE THE NATIONAL AGREEMENT OF 23 OCTOBER 1974 WAS NO LONGER IN FORCE WHEN THE FACTS GIVING RISE TO THE ACTION OCCURRED AND IT COULD NOT THEREFORE AT THAT TIME CONSTITUTE THE LEGAL BASIS FOR THE REFUSAL ON THE PART OF THE NEWSPAPER DISTRIBUTORS TO SUPPLY THE PLAINTIFF . 6 AS THE COURT STATED IN ITS JUDGMENT OF 19 DECEMBER 1968 IN CASE 13/68 SALGOIL ( 1968 ) ECR 453 , ARTICLE 177 OF THE TREATY , WHICH IS BASED ON A DISTINCT SEPARATION OF FUNCTIONS BETWEEN NATIONAL COURTS AND THE COURT OF JUSTICE , DOES NOT ALLOW THE LATTER TO CRITICIZE THE REASONS FOR THE REFERENCE . CONSEQUENTLY , A REQUEST FROM A NATIONAL COURT MAY BE REJECTED ONLY IF IT IS QUITE OBVIOUS THAT THE INTERPRETATION OF COMMUNITY LAW OR THE EXAMINATION OF THE VALIDITY OF A RULE OF COMMUNITY LAW SOUGHT BY THAT COURT BEARS NO RELATION TO THE ACTUAL NATURE OF THE CASE OR TO THE SUBJECT-MATTER OF THE MAIN ACTION . 7 HOWEVER , THAT IS NOT SO IN THIS CASE . IN THE FIRST PLACE , THE FACT THAT THE PARTIES TO THE MAIN ACTION FAILED TO RAISE A POINT OF COMMUNITY LAW BEFORE THE NATIONAL COURT DOES NOT PRECLUDE THE LATTER FROM BRINGING THE MATTER BEFORE THE COURT OF JUSTICE . IN PROVIDING THAT REFERENCE FOR A PRELIMINARY RULING MAY BE SUBMITTED TO THE COURT WHERE ' ' A QUESTION IS RAISED BEFORE ANY COURT OR TRIBUNAL OF A MEMBER STATE ' ' , THE SECOND AND THIRD PARAGRAPHS OF ARTICLE 177 OF THE TREATY ARE NOT INTENDED TO RESTRICT THIS PROCEDURE EXCLUSIVELY TO CASES WHERE ONE OR OTHER OF THE PARTIES TO THE MAIN ACTION HAS TAKEN THE INITIATIVE OF RAISING A POINT CONCERNING THE INTERPRETATION OR THE VALIDITY OF COMMUNITY LAW , BUT ALSO EXTEND TO CASES WHERE A QUESTION OF THIS KIND IS RAISED BY THE NATIONAL COURT OR TRIBUNAL ITSELF WHICH CONSIDERS THAT A DECISION THEREON BY THE COURT OF JUSTICE IS ' ' NECESSARY TO ENABLE IT TO GIVE JUDGMENT ' ' . 8 SIMILARLY , THE FACT THAT NEITHER THE PLAINTIFF NOR THE DEFENDANTS TO THE MAIN ACTION ARE PARTIES TO THE NATIONAL AGREEMENT FORMING THE SUBJECT-MATTER OF THE QUESTIONS ON THE INTERPRETATION OF THE TREATY REFERRED TO THE COURT OF JUSTICE BY THE NATIONAL COURT DOES NOT CALL IN QUESTION THE COURT ' S JURISDICTION SINCE THE APPLICATION OF ARTICLE 177 OF THE TREATY IS SUBJECT TO THE SOLE REQUIREMENT THAT NATIONAL COURTS MUST BE PROVIDED WITH ALL THE RELEVANT ELEMENTS OF COMMUNITY LAW WHICH ARE NECESSARY TO ENABLE THEM TO GIVE JUDGMENT . 9 FINALLY , ALTHOUGH IT IS TRUE THAT THE AGREEMENT IN QUESTION WAS REPUDIATED BY ONE OF THE PARTIES WITH EFFECT FROM 31 MARCH 1977 , WITH THE RESULT THAT IT WAS NO LONGER IN FORCE AT THE TIME WHEN THE FACTS GIVING RISE TO THE CASE OCCURRED , OR WHEN THE MAIN ACTION WAS COMMENCED , THAT IS TO SAY ON 21 AND 22 SEPTEMBER 1978 , NEVERTHELESS THE DEFENDANTS IN THE MAIN ACTION THEMSELVES DID NOT RULE OUT , IN THEIR ORAL ARGUMENT , THE POSSIBILITY THAT CERTAIN CLAUSES OF THE AGREEMENT MIGHT HAVE CONTINUED TO BE APPLIED IN PRACTICE AFTER 31 MARCH 1977 . FURTHERMORE , IT IS CLEAR FROM THE ORDER REFERRING THE MATTER TO THE COURT THAT IN THE MAIN ACTION THE DEFENDANTS HAD RELIED ON THE PROVISIONS OF THE ABOVE-MENTIONED NATIONAL AGREEMENT AND , MORE PARTICULARLY , ON THOSE OF ARTICLE 2 IN ORDER TO HAVE THE APPLICATION DISMISSED . 10 FOR THOSE REASONS , THE OBJECTION RAISED BY THE DEFENDANTS IN THE MAIN ACTION MUST BE DISMISSED . SUBSTANCE 11 THE PURPOSE OF THE FIRST AND THIRD QUESTIONS SUBMITTED BY THE NATIONAL COURT IS , IN THE FIRST PLACE , TO ESTABLISH WHETHER THE TERMS OF AN AGREEMENT , WHICH IS NATIONAL IN ITS SCOPE , AND WHICH RESTRICTS THE SUPPLY OF NEWSPAPERS AND PERIODICALS MERELY TO RETAILERS APPROVED BY A TRADE BODY COMPRISING THE REPRESENTATIVES OF THE NATIONAL NEWSPAPER PUBLISHERS ' AND NEWSAGENTS ' ASSOCIATIONS , CONSTITUTE AN INFRINGEMENT OF THE RULES OF COMPETITION UNDER ARTICLE 85 OF THE EEC TREATY . 12 ACCORDING TO THAT ARTICLE , AN AGREEMENT WHICH ' ' MAY AFFECT TRADE BETWEEN MEMBER STATES ' ' AND WHICH HAS AS ITS ' ' OBJECT OR EFFECT ' ' TO HARM ' ' COMPETITION WITHIN THE COMMON MARKET ' ' IS PROHIBITED AS INCOMPATIBLE WITH THE COMMON MARKET . THIS APPLIES TO AN AGREEMENT WHICH , AS THE COURT STATED IN ITS JUDGMENT OF 6 MAY 1971 IN CASE 1/71 CADILLON ( 1971 ) ECR 351 , MAKES IT POSSIBLE TO FORESEE , ON THE BASIS OF ALL THE OBJECTIVE FACTORS OF LAW OR OF FACT , WITH A SUFFICIENT DEGREE OF PROBABILITY THAT IT MAY HAVE AN INFLUENCE , DIRECT OR INDIRECT , ACTUAL OR POTENTIAL , ON THE PATTERN OF TRADE BETWEEN MEMBER STATES IN SUCH A WAY THAT IT MIGHT HINDER THE ATTAINMENT OF THE OBJECTIVES OF A SINGLE MARKET BETWEEN STATES AND WHICH HAS AS ITS OBJECT OR EFFECT THE RESTRICTION OR DISTORTION OF COMPETITION WITHIN THE COMMON MARKET . 13 IN THE PRESENT CASE , THE AGREEMENT REFERRED TO BY THE NATIONAL COURT PROVIDES FOR THE EXCLUSIVE DISTRIBUTION IN ITALY OF ITALIAN NEWSPAPERS AND PERIODICALS AND INVOLVES , INTER ALIA , THE APPLICATION OF A SELECTIVE DISTRIBUTION CLAUSE CONTAINED IN ARTICLE 2 WHEREBY ONLY APPROVED RETAILERS HAVE ACCESS TO THE SUPPLY OF NEWSPAPERS AND PERIODICALS . 14 SUCH AN AGREEMENT , WHICH EXTENDS THROUGHOUT THE TERRITORY OF A MEMBER STATE MAY BY ITS VERY NATURE HAVE THE EFFECT OF REINFORCING THE PARTITIONING OF THE MARKET ON A NATIONAL BASIS , THEREBY IMPEDING THE ECONOMIC INTERPENETRATION WHICH THE TREATY IS DESIGNED TO BRING ABOUT AND PROTECTING NATIONAL PRODUCTION . 15 ALTHOUGH IT IS TRUE THAT IN THE PRESENT CASE THE SOLE SUBJECT-MATTER OF THE AGREEMENT IN QUESTION IS THE DISTRIBUTION OF NATIONAL NEWSPAPERS AND PERIODICALS AND THAT THE AGREEMENT IS NOT CONCERNED WITH THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS FROM OTHER MEMBER STATES , THE FACT REMAINS THAT A CLOSED-CIRCUIT DISTRIBUTION SYSTEM APPLYING TO MOST OF THE SALES OUTLETS FOR NEWSPAPERS AND PERIODICALS ON NATIONAL TERRITORY MAY ALSO HAVE REPERCUSSIONS ON THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS FROM OTHER MEMBER STATES . 16 HAVING REGARD TO THESE FACTORS THEREFORE , IT IS IMPOSSIBLE TO RULE OUT IN PRINCIPLE THE POSSIBILITY THAT AN AGREEMENT SUCH AS THAT REFERRED TO BY THE NATIONAL COURT MAY , IN VIEW OF ITS CONTENT AND ITS SCOPE , AFFECT , AS FAR AS THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS IS CONCERNED , TRADE BETWEEN MEMBER STATES WITHIN THE MEANING OF ARTICLE 85 ( 1 ) OF THE TREATY . 17 HOWEVER , IT SHOULD BE RECALLED THAT SUCH AN AGREEMENT ESCAPES THE PROHIBITION LAID DOWN BY ARTICLE 85 IF IT HAS NO APPRECIABLE EFFECT ON TRADE BETWEEN MEMBER SATES . ALTHOUGH , IN THE CASE OF NEWSPAPERS AND PERIODICALS , AN ASSESSMENT OF THE APPRECIABILITY OF THE EFFECTS WHICH A DISTRIBUTION AGREEMENT MAY HAVE ON THE MARKET IS STRICTER THAN IN THE CASE OF OTHER PRODUCTS , IT IS NECESSARY NEVERTHELESS TO TAKE INTO ACCOUNT , FOR THE PURPOSE OF DETERMINING WHETHER AN AGREEMENT IS CAPABLE OF HAVING AN APPRECIABLE EFFECT ON THE MARKET IN NEWSPAPERS AND PERIODICALS FROM OTHER MEMBER STATES , FIRST THE FACT THAT THIS MARKET MAY EMPLOY , FOR THE SALE OF NEWSPAPERS IN THE AREA CONCERNED , CHANNELS OF DISTRIBUTION OTHER THAN THOSE GOVERNED BY THE AGREEMENT AND , SECONDLY , THAT DEMAND FOR THE AFORESAID PRODUCTS IS RIGID INASMUCH AS IT SHOWS NO SUBSTANTIAL VARIATIONS AS A RESULT OF THE ENTRY INTO FORCE AND THE TERMINATION OF THE AGREEMENT IN QUESTION . 18 IN THIS CONNEXION , THE FACT THAT THE STATISTICS PRODUCED BY THE COMMISSION DURING THE WRITTEN PROCEDURE AND SUPPLEMENTED AT THE SITTING REVEAL THAT THE DEMAND FOR NEWSPAPERS AND PERIODICALS FROM OTHER MEMBER STATES HAS NOT BEEN SUBJECT TO SUBSTANTIAL VARIATIONS BETWEEN 1972 AND 1979 CONSTITUTES ONE OF THE FACTORS WHICH HAVE TO BE ASSESSED . 19 IT IS FOR THE NATIONAL COURT TO DETERMINE , ON THE BASIS OF ALL THE RELEVANT INFORMATION WHICH IT MAY HAVE AT ITS DISPOSAL , WHETHER THE AGREEMENT IN FACT SATISFIES THE ABOVE-MENTIONED CONDITIONS AND THUS COMES WITHIN THE PROHIBITION LAID DOWN BY ARTICLE 85 ( 1 ). 20 HAVING REGARD TO THOSE FACTS , THE ANSWER TO THE FIRST AND THIRD QUESTIONS SHOULD THEREFORE BE THAT AN EXCLUSIVE DISTRIBUTION AGREEMENT FOR NEWSPAPERS AND PERIODICALS SUCH AS THAT REFERRED TO BY THE NATIONAL COURT COMES WITHIN THE PROHIBITION LAID DOWN BY ARICLE 85 ( 1 ) OF THE TREATY ONLY IF IT PROVES CAPABLE OF HAVING AN APPRECIABLE EFFECT ON TRADE BETWEEN THE MEMBER STATES . THE SECOND AND SIXTH QUESTIONS 21 IN ITS SECOND QUESTION , THE NATIONAL COURT ASKS WHETHER THE CLAUSE IN THE CONTESTED AGREEMENT WHICH PROVIDES THAT ONLY RETAILERS IN POSSESSION OF A TRADE LICENCE ISSUED BY THE INTER-REGIONAL JOINT COMMITTEES ARE ALLOWED TO SELL ITALIAN NEWSPAPERS AND PERIODICALS CREATES DISCRIMINATION CONTRARY TO THE TREATY . 22 IN ITS SIXTH QUESTION , IT ASKS WHETHER SUCH A RULE IS CAPABLE OF CONSTITUTING AN ABUSE OF A DOMINANT POSITION , PROHIBITED BY THE FIRST PARAGRAPH OF ARTICLE 86 OF THE TREATY . 23 THE PURPOSE OF THESE TWO QUESTIONS IS ESSENTIALLY TO ASCERTAIN WHETHER THE AGREEMENT TO WHICH THE NATIONAL COURT REFERS IS COMPATIBLE WITH THE PROVISIONS OF THE TREATY RELATING TO COMPETITION IN VIEW OF THE FACT THAT ARTICLE 2 OF THE AGREEMENT CONTAINS A CLAUSE PROVIDING FOR THE APPLICATION OF A CRITERION OF SELECTIVE DISTRIBUTION . 24 AS THE COURT HAS HELD , IN PARTICULAR IN ITS JUDGMENT OF 25 OCTOBER 1977 IN CASE 25/76 METRO ( 1977 ) ECR 1875 , SELECTIVE DISTRIBUTION SYSTEMS CONSTITUTE AN ASPECT OF COMPETITION WHICH ACCORDS WITH ARTICLE 85 ( 1 ), PROVIDED THAT RETAILERS ARE CHOSEN ON THE BASIS OF OBJECTIVE CRITERIA OF A QUALITATIVE NATURE RELATING TO THE CAPACITY OF THE RETAILER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES IN CONNEXION WITH THE REQUIREMENTS FOR THE DISTRIBUTION OF THE PRODUCT AND THAT SAID CRITERIA ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RETAILERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION . 25 IN THE CASE OF AN AGREEMENT SUCH AS THAT REFERRED TO BY THE NATIONAL COURT , IT IS NECESSARY TO TAKE ACCOUNT OF THOSE OF ITS PROVISIONS WHICH DEFINE THE CRITERIA GOVERNING THE CHOICE OF APPROVED RETAILERS , SUCH AS THE TENTH PARAGRAPH OF ARTICLE 3 AND ARTICLE 4 OF THE CONTESTED NATIONAL AGREEMENT WHICH PROVIDE THAT THE LICENCE SHALL BE GRANTED AS A RULE TO PERSONS WHO ' ' POSSESS THE APTITUDE TO PURSUE THE OCCUPATION OF NEWSAGENT ' ' . 26 IN THE PRESENT CASE , IT IS FOR THE NATIONAL COURT TO DETERMINE , IN THE LIGHT OF ALL THESE FACTORS , WHETHER GENUINE CONDITIONS EXIST WHICH ARE CAPABLE OF JUSTIFYING THE APPLICATION , IN THE CONTEXT OF THE AGREEMENT WITH WHICH IT IS CONCERNED , OF THE CONTESTED SELECTIVE DISTRIBUTION CRITERION . 27 THE ANSWER TO THE SECOND AND SIXTH QUESTIONS MUST THEREFORE BE THAT A SELECTIVE DISTRIBUTION CLAUSE SUCH AS THAT CONTAINED IN THE NATIONAL AGREEMENT REFERRED TO BY THE NATIONAL COURT , RESTRICTING THE SUPPLY OF THE PRODUCTS COVERED BY THE AGREEMENT TO APPROVED LICENCE-HOLDERS ALONE , DOES NOT INFRINGE ARTICLE 85 ( 1 ) OR THE FIRST PARAGRAPH OF ARTICLE 86 OF THE TREATY IF IT APPEARS THAT THE AUTHORIZED RETAILERS ARE SELECTED ON THE BASIS OF OBJECTIVE CRITERIA RELATING TO THE CAPACITY OF THE RETAILER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES IN CONNEXION WITH THE REQUIREMENTS FOR THE DISTRIBUTION OF THE PRODUCT AND THAT SUCH CRITERIA ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RETAILERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION . THE FOURTH QUESTION 28 IN ITS FOURTH QUESTION , THE NATIONAL COURT ASKS WHETHER THE CLAUSES OF THE CONTESTED NATIONAL AGREEMENT AND IN PARTICULAR THOSE CONTAINED IN THE RULES GOVERNING THE FUNCTIONING OF THE INTER-REGIONAL JOINT COMMITTEES MAY QUALIFY FOR EXEMPTION UNDER ARTICLE 85 ( 3 ) OF THE TREATY IF IT IS ESTABLISHED THAT THEIR PURPOSE IS TO CONTRIBUTE TO AN IMPROVEMENT IN DISTRIBUTION . 29 ARTICLE 4 ( 1 ) OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 ( OFFICIAL JOURNAL ENGLISH SPECIAL EDITION 1959-1962 , P . 87 ) PROVIDES THAT ' ' AGREEMENTS , DECISIONS AND CONCERTED PRACTICES OF THE KIND DESCRIBED IN ARTICLE 85 ( 1 ) OF THE TREATY WHICH COME INTO EXISTENCE AFTER THE ENTRY INTO FORCE OF THIS REGULATION AND IN RESPECT OF WHICH THE PARTIES SEEK APPLICATION OF ARTICLE 85 ( 3 ) MUST BE NOTIFIED TO THE COMMISSION . UNTIL THEY HAVE BEEN NOTIFIED , NO DECISION IN APPLICATION OF ARTICLE 85 ( 3 ) MAY BE TAKEN ' ' . 30 IT IS COMMON GROUND THAT THE CONTESTED AGREEMENT , WHICH WAS CONCLUDED AFTER THE ENTRY INTO FORCE OF THE AFORESAID REGULATION , HAS NOT SO FAR BEEN NOTIFIED TO THE COMMISSION . IN THESE CIRCUMSTANCES , IT HAS NOT BEEN POSSIBLE FOR ANY DECISION PURSUANT TO ARTICLE 85 ( 3 ) TO BE TAKEN IN REGARD TO THE AGREEMENT . 31 IT IS THEREFORE NECESSARY TO CONCLUDE THAT THE AGREEMENT REFERRED TO BY THE NATIONAL COURT COULD NOT , IN THE ABSENCE OF NOTIFICATION TO THE COMMISSION IN ACCORDANCE WITH ARTICLE 4 ( 1 ) OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 , BE THE OBJECT OF A DECLARATION OF INAPPLICABILITY UNDER ARTICLE 85 ( 3 ) OF THE TREATY . THE FIFTH QUESTION 32 IN ITS FIFTH QUESTION , THE NATIONAL COURT ASKS WHETHER THE CONTESTED AGREEMENT MAY QUALIFY FOR BLOCK EXEMPTION UNDER REGULATION NO 19/65 OF THE COUNCIL OF 2 MARCH 1965 AND UNDER REGULATION NO 67/67 OF THE COMMISSION OF 22 MARCH 1967 . 33 ARTICLE 1 ( 1 ) OF REGULATION NO 19/65 OF THE COUNCIL ( OFFICIAL JOURNAL ENGLISH SPECIAL EDITION 1965-1966 , P . 35 ) PROVIDES THAT IN ACCORDANCE WITH ARTICLE 85 ( 3 ) OF THE TREATY , ARTICLE 85 ( 1 ) DOES NOT APPLY TO CATEGORIES OF AGREEMENTS ' ' TO WHICH ONLY TWO UNDERTAKINGS ARE PARTY ' ' AND WHICH DISPLAY CERTAIN CHARACTERISTICS . 34 THE SAME PROVISION IS CONTAINED IN ARTICLE 1 ( 1 ) OF REGULATION NO 67/67 OF THE COMMISSION ( OFFICIAL JOURNAL ENGLISH SPECIAL EDITION P . 10 ). THEREFORE IT FOLLOWS FROM THESE PROVISIONS THAT AN AGREEMENT MAY QUALIFY FOR BLOCK EXEMPTION UNDER THE AFORESAID REGULATIONS NOS 19/65 AND 67/67 ONLY ON CONDITION THAT IT IS AN AGREEMENT ' ' TO WHICH ONLY TWO UNDERTAKINGS ARE PARTY ' ' . 35 IT IS UNDISPUTED THAT THE NATIONAL AGREEMENT REFERRED TO BY THE NATIONAL COURT WAS CONCLUDED BETWEEN THE ITALIAN PUBLISHERS ' ASSOCIATION AND THE ITALIAN NEWSAGENTS ' ASSOCIATION . SINCE THE PARTIES TO THE AGREEMENT ARE TRADE-UNION ASSOCIATIONS , BOTH OF WHICH HAVE A LARGE MEMBERSHIP , THEY CANNOT BE REGARDED AS ' ' TWO UNDERTAKINGS ' ' WITHIN THE MEANING OF THE AFORESAID REGULATIONS NOS 19/65 AND 67/67 , WITH THE RESULT THAT THE CONDITION CONTAINED IN ARTICLE 1 ( 1 ) OF THOSE REGULATIONS DOES NOT APPEAR TO HAVE BEEN MET IN THE PRESENT CASE . 36 THE ANSWER TO THE FIFTH QUESTION SHOULD THEREFORE BE THAT SINCE THE AGREEMENT REFERRED TO BY THE NATIONAL COURT IS NOT AN AGREEMENT ' ' TO WHICH ONLY TWO UNDERTAKINGS ARE PARTY ' ' WITHIN THE MEANING OF ARTICLE 1(1 ) OF REGULATION NO 19/65 OF THE COUNCIL OF 2 MARCH 1965 AND OF REGULATION NO 67/67 OF THE COMMISSION OF 22 MARCH 1967 , IT DOES NOT COME WITHIN THE CATEGORIES OF AGREEMENTS WHICH , UNDER THE AFORESAID REGULATIONS , MAY BE EXEMPTED FROM THE APPLICATION OF ARTICLE 85 ( 1 ) OF THE TREATY . Decision on costs 37 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE AND AS THE 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 IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE TRIBUNALE CIVILE , RAGUSA , BY ORDER OF 27 MAY 1980 , HEREBY RULES : 1 . AN EXCLUSIVE DISTRIBUTION AGREEMENT FOR NEWSPAPERS AND PERIODICALS SUCH AS THAT REFERRED TO BY THE NATIONAL COURT COMES WITHIN THE PROHIBITION LAID DOWN BY ARTICLE 86 ( 1 ) OF THE TREATY ONLY IF IT PROVES CAPABLE OF HAVING AN APPRECIABLE EFFECT ON TRADE BETWEEN MEMBER STATES . 2 . A SELECTIVE DISTRIBUTION CLAUSE , SUCH AS THAT CONTAINED IN THE NATIONAL AGREEMENT REFERRED TO BY THE NATIONAL COURT , RESTRICTING THE SUPPLY OF THE PRODUCTS COVERED BY THE AGREEMENT TO AUTHORIZED LICENCE-HOLDERS ALONE , DOES NOT INFRINGE ARTICLE 85 ( 1 ) OR THE FIRST PARAGRAPH OF ARTICLE 86 OF THE TREATY IF IT APPEARS THAT THE AUTHORIZED RETAILERS ARE SELECTED ON THE BASIS OF OBJECTIVE CRITERIA RELATING TO THE CAPACITY OF THE RETAILER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES IN CONNEXION WITH THE REQUIREMENTS FOR THE DISTRIBUTION OF THE PRODUCT AND THAT SUCH CRITERIA ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RETAILERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION . 3 . THE AGREEMENT REFERRED TO BY THE NATIONAL COURT COULD NOT , IN THE ABSENCE OF NOTIFICATION TO THE COMMISSION IN ACCORDANCE WITH ARTICLE 4 ( 1 ) OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 , BE THE OBJECT OF A DECLARATION OF INAPPLICABILITY UNDER ARTICLE 85 ( 3 ) OF THE TREATY . 4 . SINCE THE AGREEMENT REFERRED TO BY THE NATIONAL COURT IS NOT AN AGREEMENT ' ' TO WHICH ONLY TWO UNDERTAKINGS ARE PARTY ' ' WITHIN THE MEANING OF ARTICLE 1 ( 1 ) OF REGULATION NO 19/65 OF THE COUNCIL OF 2 MARCH 1965 AND OF REGULATION NO 67/67 OF THE COMMISSION OF 22 MARCH 1967 , IT DOES NOT COME WITHIN THE CATEGORIES OF AGREEMENTS WHICH , UNDER THE AFORESAID REGULATIONS , MAY BE EXEMPTED FROM THE APPLICATION OF ARTICLE 85 ( 1 ) OF THE TREATY .

FIRST SECTION CASE OF AKÇAM v. TURKEY (Application no. 32964/96) JUDGMENT STRASBOURG 30 October 2001 FINAL 30/01/2002 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 Akçam v. Turkey, The European Court of Human Rights (First Section), sitting as a Chamber composed of: MrsE. Palm, President,MrL. Ferrari Bravo,MrGaukur Jörundsson,MrB. Zupančič,MrT. Panţîru,MrR. Maruste, judges,MrF. Gölcüklü, ad hoc judge,and Mr M. O’Boyle, Section Registrar, Having deliberated in private on 31 August 1999 and on 9 October 2001, Delivers the following judgment, which was adopted on the last‑mentioned date: PROCEDURE 1. The case originated in an application (no. 32964/96) against the Republic of Turkey 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 a Turkish national, Mr Cahit Akçam (“the applicant”), on 28 August 1996. 2. The applicant was represented by Mr Mehdi Bektaş, a lawyer practising in Ankara (Turkey). The Turkish Government did not designate an Agent for the purposes of the proceedings before the Court. 3. The applicant complained under Article 6 § 1 of the Convention about the length of the criminal proceedings against him. 4. The application was transmitted to the Court on 1 November 1998, when Protocol No. 11 to the Convention came into force (Article 5 § 2 of Protocol No. 11). 5. The application was allocated to the First 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 of the Rules of Court. Mr Rıza Türmen, the judge elected in respect of Tukey, withdrew from sitting in the case (Rule 28). The Government accordingly appointed Mr Feyyaz Gölcüklü to sit as an ad hoc judge, in his place (Article 27 § 2 of the Convention and Rule 29 § 1). 6. The President of the Chamber decided that in the interests of the proper administration of justice, the present application should be joined to other applications against the same respondent State raising the same complaints (applications nos. 26480/95, 28291/95, 29280/95, 26699/96, 29700/96, 29701/96, 29702/96, 29703/96, 29911/96, 29912/96, 29913/96, 31831/96, 31834/96, 31853/96, 31880/96, 31891/96, 31960/96, 32987/96, 32900/96, 33362/96, 33369/96, 33645/96, 34591/96, 34687/96, 39428/96 and 43362/96) (Rule 43 § 2). 7. By a decision of 31 August 1999, having obtained the parties’ observations, the Court declared the application admissible. 8. The applicant and the Government each filed observations on the merits (Rule 59 § 1). THE FACTS I. THE CIRCUMSTANCES OF THE CASE A. Arrest and detention of the applicant 9. On 17 November 1980 police officers from the Ankara Security Directorate arrested the applicant on suspicion of membership of an illegal armed organisation, the Dev-Yol (Revolutionary Way). 10. On 20 February 1981 the Ankara Martial Law Court (sıkıyönetim mahkemesi) ordered the applicant’s detention on remand. B. Trial in the Ankara Martial Law Court 11. On 26 February 1982 the Military Public Prosecutor filed a bill of indictment with the Martial Law Court against the applicant and 722 other defendants. The Public Prosecutor accused the applicant, inter alia, of membership of the Dev-Yol, whose object was to undermine the constitutional order and replace it with a Marxist-Leninist regime. The prosecution sought the death penalty under Article 146 § 1 of the Turkish Criminal Code. 12. On 14 December 1988 the Ankara Martial Law Court ordered the applicant’s release pending trial. 13. In a judgment of 19 July 1989 the Martial Law Court convicted the applicant of membership of the Dev-Yol. It sentenced the applicant to 16 years’ imprisonment under Article 168 § 1 of the Turkish Criminal Code, permanently debarred him from employment in the civil service and placed him under judicial guardianship. C. Proceedings on appeal 14. As the applicant’s sentence exceeded 15 years’ imprisonment, his case was automatically referred to the Military Court of Cassation (askeri yargıtay). 15. Following promulgation of the Law of 27 December 1993, which abolished the jurisdiction of the Martial Law Courts, the Court of Cassation (yargıtay) acquired jurisdiction over the case and on 26 December 1994 the case file was transmitted to it. 16. On 27 December 1995 the Court of Cassation quashed the applicant’s conviction on the ground that he should have been convicted of the offence under Article 146 § 1 of the Turkish Criminal Code. It referred the case to the Ankara Assize Court (ağır ceza mahkemesi). The criminal proceedings are still pending before the latter court. II. RELEVANT DOMESTIC LAW AND PRACTICE 17. Article 146 § 1 of the Turkish Criminal Code provides: “Whosoever shall attempt to alter or amend in whole or in part the Constitution of the Turkish Republic or to effect a coup d’état against the Grand National Assembly formed under the Constitution or to prevent it by force from carrying out its functions shall be liable to the death penalty.” 18. Article 168 of the Criminal Code reads: “Any person who, with the intention of committing the offences defined in Articles ..., forms an armed gang or organisation or takes leadership ... or command of such a gang or organisation or assumes some special responsibility within it shall be sentenced to not less than fifteen years’ imprisonment. The other members of the gang or organisation shall be sentenced to not less than five and not more than fifteen years’ imprisonment.” THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION 19. The applicant complained about the length of the criminal proceedings against him. He alleged a violation of Article 6 § 1 of the Convention, which provides, as relevant: “In the determination of ... any criminal charge against him, everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...” 20. The Government refuted the applicant’s allegations. They argued that the case was complex on account of the nature of the charges the applicant faced and the need to organise a large-scale trial involving 723 defendants, including the applicant, all of whose involvement in Dev-Yol activities had to be established. They averred that these factors explained the length of the proceedings and that no negligence or delay could be imputed to the judicial authorities. A. Period to be taken into consideration 21. The Court notes that the proceedings began on 17 November 1980, the date of the applicant’s arrest, and are still pending before the Ankara Assize Court. They have thus already lasted almost twenty years and ten months. 22. The Court’s jurisdiction ratione temporis only permits it to consider the period of almost fourteen years and eight months that elapsed after 28 January 1987, the date of deposit of Turkey’s declaration recognising the right of individual petition (see Cankoçak v. Turkey (Sect. 1), nos. 25182/94 and 26956/95, judgment of 20 February 2001, § 26). It must nevertheless take account of the state of the proceedings at the time when the aforementioned declaration was deposited (ibid., § 25). On the critical date the proceedings had already lasted six years and two months. B. Reasonableness of the length of proceedings 23. The Court observes that the Martial Law Court took almost eight years and eight months to reach a verdict. It took the Military Court of Cassation more than four years to rule on the appeal. Furthermore, the Court of Cassation gave judgment on 27 December 1995, approximately one year after it had been seized of the case. Subsequent to the latter judgment the case was referred to the Ankara Assize Court (ağır ceza mahkemesi), where the criminal proceedings are still pending, and they have already lasted almost five years and nine months before that court. The Court considers that both at first instance and in the appeal proceedings there were substantial delays, which cannot be explained in terms of the admitted complexity of the case and must be considered attributable to the national authorities. 24. Having regard to all the evidence before it and to its case-law on the subject (see Şahiner v. Turkey (Sect. 1), no. 29279/95, judgment of 4 September 2001, to be published in ECHR 2001-...), the Court holds that the length of the proceedings in issue did not satisfy the “reasonable time” requirement. 25. There has accordingly been a breach of Article 6 § 1 of the Convention. II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 26. 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 27. The applicant claimed the sum of 500,000 French francs (FRF) by way of compensation for pecuniary and non-pecuniary damage. He referred in this connection to his suffering as a result of the excessive length of the proceedings against him. 28. The Government did not make any comments on the applicant’s claim. 29. The Court considers that the applicant must have suffered a certain amount of distress, having regard to the total length of the proceedings against him. Deciding on an equitable basis, it awards him the sum of FRF 100,000. B. Costs and expenses 30. The applicant did not specify his claim for reimbursement of legal costs and expenses incurred. He left the matter to be assessed by the Court. 31. The Government did not make any observations under this head of claim either. 32. The applicant clearly incurred some expenses in the Convention proceedings. The Court considers it reasonable to award the applicant FRF 10,000 by way of reimbursement of his costs and expenses. C. Default interest 33. According to the information available to the Court, the statutory rate of interest applicable in France at the date of adoption of the present judgment is 4,26% per annum. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Decides to disjoin the application from other applications joined pursuant to Rule 43 § 1; 2. Holds that there has been a violation of Article 6 § 1 of the Convention on account of the length of the criminal proceedings; 3. Holds (a) 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, the following amounts, to be converted into Turkish liras at the rate applicable on the date of settlement: (i) 100,000 (one hundred thousand) French francs in respect of non‑pecuniary damage; (ii) 10,000 (ten thousand) French francs in respect of costs and expenses, together with any tax that may be chargeable; (b) that simple interest at an annual rate of 4,26% shall be payable from the expiry of the above-mentioned three months until settlement; 4. Dismisses the remainder of the applicant’s claims for just satisfaction. Done in English, and notified in writing on 30 October 2001, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Michael O’BoyleElisabeth PalmRegistrarPresident

This is an appeal under Section 11 of the Tribunals and Inquiries Act 1992 against a decision of the Special Educational Needs and Disability Tribunal ("the Tribunal") dated 14 January 2008. The Appellants, Bedfordshire County Council ("the Council" and, sometimes, "LEA") claim that the Tribunal erred in law in its approach to ordering amendments to the Statement of Special Educational Needs and replacing the special school specified with another proposed by the parents Mr and Mrs Haslam. The first Respondents Mr and Mrs Haslam contend that the Tribunal was correct and that its decision should be upheld, (criticisms of some findings made in the Respondent's Notice not being proceeded with). The Second Respondent, the Chair of the Tribunal has, in accordance with usual practice, not participated in the appeal. In addition to hearing from Mr McManus QC and Mr Moulder for the Appellants and Mr McKendrick for the parents I also received submissions from Mr Friel on behalf of Ben, the child, who was joined to the action as an interested party by the Order of Pitchford J dated 11th April. Legal Background Before turning to the facts and issues I first summarise the legal structure within which they arise in this important but specialised jurisdiction. This case concerns Sections 324-326 of the Education Act 1996 as amended. Section 324 was helpfully summarised by Judge LJ in W -v- Leeds CC & SENDIST (2005) ELR 617 at 627 as follows. "Section 324 of the 1996 Act provides for the making and maintenance of a statement of a child's special educational needs where: 'It is necessary for the local education authority to determine the special educational provision which any learning difficulty he may have calls for'. In short, the statement is created to enable a proper assessment of the educational provision required for the particular child with special educational needs. Special educational needs arise where the child 'has a learning difficulty which calls for special educational provision to be made …' and for the purposes of the 1996 Act the child has a learning difficulty if: '(a) he has a significantly greater difficulty in learning than the majority of children of his age, (b) he has a disability which either prevents or hinders him from making use of educational facilities of a kind generally provided for children of his age in schools within the area of local educational authorities'. Special educational provision of itself means: '(a) … educational provision which is additional to, or otherwise different from, the educational provision made generally for children of his age "in such schools".' The form of the statement is prescribed, but by s324(3) it is required to: '(a) give details of the authority's assessment of the child's special educational needs; and (b) specify the special educational provision to be made for the purpose of meeting those needs'. The Education (Special Educational Needs) England (Consolidation) Regulations 2001 prescribe the form and contents of the statement. Thus part 2 of the statement is headed 'Special Educational Needs'. These are to be set out 'in terms of the child's learning difficulties which call for special educational provision'. Part 3 is entitled 'Special Educational Provision'. In this part of the statement the objectives which the special educational provision should aim to meet are specified. The educational provision to meet the needs in part 2 and the objectives in part 3 are then, in their turn, to be specified. Part 4 is concerned with placement in a school, and part 5 specifies the non-educational needs of a child for which provision is thought appropriate if the child is to benefit properly from the arrangements for special educational provision". Section 324(5)(a) of the Education Act 1996, as amended provides:- "Where a local education authority maintains a statement under this section then – a. Unless the child's parent has made suitable arrangements, the authority – i. Shall arrange that the special educational provision specified in the statement is made for the child, and ii. May arrange that any non-educational provision specified in the statement is made for him in such manner as they consider appropriate". It follows from that, the Council submits, that it is obliged to arrange the special educational provisions specified in the statement but has a discretion to arrange the non educational provision. This is the source for the detailed arguments and discussion in the area of the law of the differences between "educational" and non educational. It is for the LEA to determine subject to scrutiny by the Tribunal whether any particular provision is educational or non educational: London Borough of Bromley -v- Special Educational Needs Tribunal [1993] 3 All ER 587, CA. In that case, Sedley, LJ said at page 596: "Whether a form of help falls within this description [special educational needs] is a question primarily for the LEA and secondarily for the SENT's expert judgment". Section 326 of the Education Act 1996, as amended provides, as far as relevant: "(1) The parent of a child for whom a local education authority maintain a statement under Section 324 may appeal to the Tribunal – (a) when the statement is first made (b) if an amendment is made to the statement, or (c) if, after conducting an assessment under Section 323, the local authority determine not to amend the statement (1A) An appeal under this section may be against any of the following – (a) the description in the statement of the local education authority's assessment of the special educational needs, (b) the special educational provision specified in the statement (including the name of the school specified), (c) if no school is specified in the statement, that fact. (3) On an appeal under this section the Tribunal may – (a) dismiss the appeal, (b) order the authority to amend the statement, so far as it describes the authority's assessment of the child's special educational provision and make such other consequential amendments to the statement as the Tribunal thinks fit, or (c) order the authority to cease to maintain the statement". The Council submits and the other parties do not dispute that in this case the jurisdiction of the Tribunal was limited to determination of the assessment of the child's special educational needs and the provision to meet those needs, including the name of the school. The power of the Tribunal is simply to amend the description of the assessment and make consequential amendments arising from it. The Council submits that the power of consequential amendment has to be made within the ambit of the determination of the special education provision permitted within the appeal under Section 326(1A). The Council also submits that while the Tribunal can inform itself about the non educational provision that is proposed it is no part of its function to make orders in relation to it. See Leeds City Council, paragraphs 42, 43, 45 and 49-51. The parents submit that provision should not be made in Part 3 for needs which are not education or which relate to background and comment. If a matter appears in Part 3 therefore it becomes 'educational'. Further they submit that the Tribunal can lawfully refuse to name a school in Part 4, even though it has concluded that it meets the child's special educational needs if that provision is not going to be practicable. Subject to that the Council's submissions about the legal framework are not seriously disputed. There are further differences between the parties about the law but this judgment will be more coherent if I address those in the light of the facts. The facts and the decision of the Tribunal The background can be taken from the first two paragraphs of the Decision:- "1. Ben is severely autistic and also has a diagnosis of ADHD. He is non-verbal. He has severe learning difficulties, functioning at level P3-P5 in most areas of his curriculum. Ben is extremely difficult to manage; he exhibits challenging behaviour that can be erratic and unpredictable. He has no concept of danger and has extremely complex sensory issues. He requires 1:1support for all aspects of personal care and daily living skills. He is doubly incontinent, and is prone to diarrhoea. His development of fine motor tasks is significantly below that of his chronological age. He has considerable sleep disturbance, waking between 2 am and 4 am and has a very limited diet. He is difficult to manage at home, and has been aggressive to all family members. For example, he has broken the TV on four occasions and his brothers are frightened of him. Ben's parents had produced a short DVD showing what Ben can be like at home which had shown examples of his challenging and sometimes threatening behaviour. His parents are naturally exhausted, having looked after him full time, although he does attend for some respite at the Foxgloves. 2. Ben has attended the Rainbow School, a LEA maintained day special school. However, that school has now closed and the LEA issued an amended statement of special educational needs on 9 February 2007. Mr and Mrs Haslam appealed against Parts 2, 3 and 4 of this statement. Their proposed school at the hearing was the Shires School, an independent residential special school for autistic children. Enabling consent had been obtained for Ben to attend the school and a place is available. The LEA had a number of reservations regarding the Shires School. However, Mr Moulder confirmed that despite these reservations, the LEA did not consider that the Shires School would be inappropriate for Ben. It argued that it would be an unreasonable use of public expenditure when appropriate provision could be made for Ben by him attending the LEA's proposed school, Sunnyside School, at considerably less expense. This is a LEA maintained day special school catering for generic special educational needs that caters for autistic children. It is recognised as a centre for teaching children with autism and related communication difficulties. The Local Authority's Joint Allocation Panel recognised the potential need for a long-term 52 week care placement for Ben from December 2006. The Local Authority therefore proposed that Ben should reside at Maythorn children's home which is on the same site as Sunnyside School. Both Mr Friel and Mr Moulder presented skeleton arguments and it was agreed that the placement at Maythorn would be provided under Section 20 Children Act 1989 whereby parental responsibility remains with the parents and the arrangement requires parents consent". In Paragraph 3 the Tribunal records what the respective representatives have been able to agree before identifying a disagreement by the LEA with the parents' proposals that there be highly structured programmes to develop self-help skills throughout Ben's waking day. The LEA's case statement also stated, as the Tribunal records that since May 2007 the parents "have refused permission for any professionals permission by the LEA to have access to Ben and that therefore the LEA had no updated evidence …". At Paragraph 4 the Tribunal identifies its task "the central issue for the Tribunal was whether Ben required provision of educational programmes beyond the school day, by way of a waking day curriculum. The LEA recognised in its case statement that Ben needs a consistent approach across school and residential care settings". The Decision goes on to review the detailed written evidence before it and the testimony of the four witnesses giving evidence at the hearing. As is emphasised on behalf of the parents the Decision refers to the need for therapies to be planned on a "joined up" basis. There are references to the absence of a clear divide between education and care matters at the Shires School proposed by the parents and at Paragraph 22 the reason for the position adopted by the Council becomes clearer with a comparison of the cost of a placement at the Shires School of approximately £250,000 a year with something over £100,000 should Ben attend Sunnyside and live at the Maythorn children's home. The Tribunal then reaches its conclusions. In A and B amendments are made to Part 2 and Part 3 of the statement which are either agreed are not central to this appeal. At C the Tribunal concludes that "the day provision that was being offered by the LEA would be appropriate and would meet Ben's special educational needs during that time". That paragraph records that the "necessary consistency of approach that is so important for autistic children" has not been implemented and that Ben needs such an approach "across all settings". Reference is made to the fact that it has been extremely difficult for the parents to achieve any form of consistency at home as they have not had the necessary help and support from professionals. Paragraph D deals with what the Tribunal calls the "central issue as to whether Ben requires education beyond the school day by way of a waking day curriculum, we had regard to the case of London Borough of Bromley -v- Sent". The Decision goes on "the issue is whether in order to address these difficulties, Ben requires the delivery of educational programmes beyond the school day or whether he requires a measure of structure and consistency of approach throughout the day and across all settings as contained in the decision of R (Tottmann) -v- Hertfordshire County Council 2003". At E the Tribunal have regard to Mr Friel's submissions that educational programmes are needed beyond the school day but add "we do not consider it necessary in Ben's case. We agreed with her...a reference to the psychologist) argument that it was necessary that there should be a consistent approach across all of his environments. However that could be achieved without care staff and others becoming teachers of educational programmes". The Tribunal added "we did not conclude that the LEA's proposals amounted to provision of educational programmes beyond the school day. What was contemplated was a measure of consistency and structure that could be achieved by school and care staff engaging in joint planning and liasion between the school setting and the care setting …". In F the Tribunal is impressed by the "provision" that was offered by the local authority recognising that Ben would create additional difficulties at home given his increasing size and aggressive behaviour. The Tribunal go on "as we had concluded that Sunnyside School would be appropriate and that a consistent approach be achieved by his attendance at the Maythorn unit, it would be logical for the Tribunal to find that it would be an unreasonable use of public expenditure for Ben to attend the Shires School." So far therefore the Tribunal is inclining to uphold the Council's decision. At G the Tribunal points out that Ben's proposed placement at Maythorn would be under Section 20 of the Children Act 1989 by which parental responsibility remains and an arrangement requires the parents' consent. Ben's parents did not want him to go to Maythorn. There was no authority to enable the Tribunal to name the Maythorn unit as part of the overall provision as it was a residential children's home not a school. "Therefore, although we considered the local authority's overall provision to be appropriate, we concluded that it would be outside the Tribunal's jurisdiction to name this provision". Sunnyside provision would not be successful without Ben being placed within the Maythorn unit to achieve the essential consistency of approach. This led in H to a decision "as the Tribunal is unable to name the LEA's overall proposed provision, we concluded that in order for the provision to achieve the necessary consistency of approach, he should attend the only other proposed school, namely the Shires School". Amongst the orders the Tribunal made was to require the LEA to amend Part 3 of the statement by substituting a variety of provisions including under "consistency" "in order to achieve a consistent and structured approach to the required provision across all environments, there will need to be daily contact and liasion between school and staff within the care setting". Finally Part 4 was to be amended by substituting "attendance at a special school that caters for the need of children with autism – The Shires School". I have of course considered the submissions of the parties in the context of the Decision as a whole and not the compressed summary set out above. Grounds of appeal The Council relies on 5 separate grounds. In essence it says that the Tribunal erred in law in deciding that as a precondition to naming Sunnyside it had to be able either to name Maythorn, the proposed non educational provision, or order attendance of Ben at Maythorn to which the parents' objection (to the LEA's proposed non-educational provision) would be a bar. The Council says that the Tribunal, having determined that Sunnyside was suitable and appropriate special education, should have named it in Part 4. The Tribunal is concerned with special educational provision and while it obtains information about non educational provision it is not concerned with making orders in relation to it. The Tribunal should not have been concerned with the powers of the Council to order non educational provision. The lack of acceptance by the parents of an exercise by the Council of a discretion about non educational provision could not in itself render unsuitable what is otherwise unsuitable educational provision. The parents are always free to make suitable alternative arrangements under Section 324(5)(a) of the Education Act. Parents do not have a general right of veto as regards suitable special educational provision – see S -v- Sent [1995] 1 WLR 1627 at 1637 E – 1638 H. The Tribunal did not find that any special education provision was required outside the school day or at a place other than the school. The Tribunal's references to a consistent and structured approach across all environments are not a finding that a child has a special educational need for a consistent approach or that such an approach is itself a special educational provision. That is clear from a fair reading of the decision. If the Tribunal had intended otherwise there would have been an amendment to Part 2 of the statement but there was not. Such an approach would have contradicted paragraph E of the decision. If the Tribunal had found that the need for a consistency was part of the child's special educational needs they would have been in error. Ground 2 is related to Ground 1 claiming that the Tribunal misdirected itself when holding that in order to name Sunnyside School in Part 4 it also needed to be able to name Maythorn. Having found that all appropriate special educational provision was capable of being made at Sunnyside, the Maythorn aspect was non-educational provision within the discretion of the council. Ground 3 is a claim that the Tribunal misdirected itself in law by appearing to decide that by specifying a consistent approach there was a need for the Tribunal to be able to name or specify delivery at Maythorn. This "consistent approach" is not educational provision as is clear, Mr McManus QC submits, from R (Tottmann) -v- Hertfordshire County Council [2004] EWCA 927. In deciding its specification within Part 3 of the statement, the Tribunal effectively and mistakenly treated "consistent approach" as having the status of special educational provision despite explicit findings otherwise at Paragraph E. Grounds 4 concerns Section 20(7) of the Children Act 1989 and arises only if the Council fails on its first 3 grounds so before addressing it I will summarise the position of the other two parties on the first three grounds and reach a decision about them. Ground 5 forms part of the argument on Grounds 1 and 2. Position of the First Respondents Mr McKendrick submits that the key issue is whether the requirement for Ben to be provided with a "consistent approach" is special educational provision and he says that it plainly is. Once that becomes clear the first three grounds fall away. Sunnyside alone could not provide a "consistent approach" and meet all Ben's educational needs so some other school had to be named in Part 4. Ground 2 fails because the Tribunal was considering a consistent approach as part of special educational needs and was under a mandatory duty to name a school that met them. Ground 3 fails because, Mr McKendrick submits, the Tribunal's decision as regards "consistent approach" in its Order followed naturally from the Council's own case as advanced in its Supplementary Case Statement, the Decision and because of the clear legal authority that this is pre-eminently an issue for the Tribunal. The parents submit that Tottmann does not assist the Council because the Court of Appeal approved of a characterisation by the trial judge of consistency in approach being special educational needs. The parents submit that even if consistency is a non-educational provision and within the discretion of the appellant to arrange, the Tribunal can still take the view the provision must be practicable. Mr McKendrick submits that the Tribunal is entitled to refuse to name a school in Part 4 even if it has concluded that it meets the child's special educational needs. He relies upon the facts in Leeds but that case, as I read it, shows only that the Tribunal has a legitimate interest in knowing what the LEA proposes to do for non educational provision. Indeed that case emphasises that while a holistic approach should be adopted by the various bodies with different responsibilities for the child the Tribunal had no jurisdiction over the provision by social services departments (see paragraphs 42 and 43). Mr McKendrick also submits that the Tribunal was entitled to consider whether it was appropriate to name a school in Part 4 when this would involve the parents having to agree to voluntary care for their child under Section 20 of the 1989 Act. It was he submits for the Tribunal to consider in such circumstances whether the "veto" of the family was determinative. He cites CB -v- London Borough of Merton and SENT [2002] ELR 452 at paragraphs 28 and 29. That case dealt with the question of whether placement of a child at a boarding school was an unjustified interference with his parents Article 8 rights and is no support for this broad proposition. Position of the child Mr Friel submits that although the Decision is badly worded it is correct in law. He says that the Tribunal correctly recorded an agreement that there should be delivery of educational programmes to include the holidays and that this was accepted by the local authority before the Tribunal. The Tribunal did not err in regarding consistency of approach as an educational provision because the LEA actually agreed to provide this or accepted the evidence and acknowledged such an agreement in its Supplementary Case Statement. In truth disagreement between the parties was limited. The case before the Tribunal had not been helped by the withdrawal by the Council of a 52 week educational placement. However in its Supplementary Case Statement the Council accepted the expert evidence which required provision to be delivered both at school and outside. There is no confusion by the Tribunal and no error of law. Mr Friel goes on to support those propositions with a detailed analysis of case statements, reports and evidence produced at the hearing before the Tribunal. He also submits that the Tribunal can order, as it was plainly aware, a provision that can be delivered in practice as opposed to making a theoretical determination. Mr Friel relied on the speech of Baroness Hale in R on the application of M -v- London Borough of Hammersmith and Fulham 2008 UKHL 14 paragraph 42 where, in the context of Section 20 of the 1989 Act she states "the label which they choose to put upon what they have done cannot be the end of the matter …". He submits that the LEA had in this case planned a full time educational provision and that in substance is what the Tribunal ordered. But as I see it the Tribunal decided, as a fact, that Ben did not need educational as opposed to other provision at Maythorn. The attractive way in which Mr Friel presented his argument did not disguise the fact that his approach is a convoluted one. Except where it is being alleged that the Tribunal acted irrationally or has expressed itself ambiguously the court looks at the Decision to determine whether or not it is lawful. It is not helpful to extrapolate from all the material before the Tribunal some concept of what the Tribunal really meant or should have said. Much of that material may have been carefully evaluated without the Tribunal articulating its reasons as is so often the case when a Decision needs to be kept to a reasonable length. Further the Tribunal has a duty to give only summary reasons- see S which I referred to in Paragraph 14 above. He also submits that the Tribunal can only order provision that is practicable and not theoretical and relies upon the decision of Sullivan J in S -v- The City and Council Swansea [2000] ELR 315 at 323 A-B. But as Mr McManus points out that case is authority only for the proposition that if the child has an educational need and a particular school is identified it must be able to meet that need. Mr Friel's skeleton argument ran to 37 pages and this, perhaps understandably, led to a formidable written reply from Mr McManus QC and Mr Moulder running to 40 pages. Much of this relates to textual analysis of the material before the Tribunal. I do not propose to deal with the detailed submissions about the underlying material. Unless an appeal is claiming that a Tribunal adopted an approach that was irrational given the material before it, it should not be necessary for argument on a Section 11 appeal to stray far outside the Decision itself. Decision of the court on Grounds 1, 2 and 3 The arguments of all three parties came together at the point where they all agreed that the decision should be read as a whole with common-sense rather than as a statute. But they understandably all drew different conclusions from that and pointed to particular sentences and paragraphs as being particularly significant or the reverse. I do not propose to summarise those competing textual submissions. The cases show and common sense dictates that the Decision must be read as whole and particular passages viewed in context. Paragraph E of the Decision concludes that Ben does not need educational programmes beyond the school day, a consistent approach can be achieved without care staff becoming teachers of educational programmes. The LEA's proposals did not amount to provision of educational programmes beyond the school day. In effect consistency can be achieved by school and care staff engaging in joint planning and liaison between the school setting and the care setting. On a natural reading of paragraph E a consistent approach would be between educational and non educational matters, the educational being provided by the school and the non educational by Maythorn. This leads in G to the conclusion that in order for special educational provision to be provided at Sunnyside successfully it was essential that there be consistency of approach with the non educational needs to be supplied by Maythorn. In reaching its view and drawing relevant distinctions the Tribunal was guided by case law and in particular by the decisions of the Court of Appeal in Bromley and Tottmann with which, as a specialist tribunal, it will be particularly familiar. The Tribunal answered the central question which it correctly states in Paragraph 4 and reminds itself of in D. Mr McKendrick's succinct but able submissions about overlap between the categories of educational and non-educational provision in the case of a child who faces challenges such as Ben does do not, as I see it, apply in a case like this where the Tribunal has identified the distinction clearly and then gone on to make it. In Bromley Sedley LJ stated, at 594 that particular respect should be paid to a Tribunal's conclusion with the court intervening only where an error of law or jurisdiction or due process can be shown thus the question whether therapies which a child needs are directly related to his learning difficulties are matters of judgement first for the LEA and then for the SENT. SENT is to exercise a case by case judgment which no prescriptive legislation could ever anticipate "whether a form of help needed by the child falls within this description" (ie "special educational provision") "is a question primarily for the LEA and secondarily for the SENT's expert judgment". The Lord Justice points out that there is between "the unequivocally educational and the unequivocally non-educational a shared territory of provision which can be intelligibly allocated to either". The Tribunal, having referred to Bromley would have been aware of the concept of shared territory when drawing the boundary in this case and having reached that determination its decision should be respected for the reasons given. So again it is clear that the Tribunal saw Ben's future as involving education at Sunnyside provided with non-educational support at Maythorn. In Tottmann the Tribunal had also rejected the view that the child had a need for programmes of special education to be provided throughout the waking day, opting for consistency during that time not programmes of special education. As Clarke LJ, as he then was, pointed out the emphasis in that case was on consistency of approach but that did not mean that the LEA must provide programmes other than at school. Consistency of approach is not referred to in Tottmann as exclusively educational or non educational but as relating to co-ordination between the two. The fact that the Tribunal in one case saw consistency of approach as being other than part of special educational needs does not mean the Tribunal in another case cannot take a different view informed by particular facts and the application of its specialist expertise. I am not sure that it has to be classified as either. Another feature of Tottmann was that the need for consistency was one of the matters referred to in Part 3 of the statement but the court still affirmed the judge's decision that this was a non-educational provision. A reference to "consistent approach" can be made in Part 3 (under the heading "Special Educational Provision") without it becoming a special educational need. If that were not the case the Tribunal could not make common-sense and in some way obvious points about the need for provisions to be provided consistently and in co-ordination with each other. As in other areas of life consistency of provision is desirable and obvious. There should not usually be a need to place "consistency" in to either educational or non-educational pigeon holes when this noun refers to co-ordination between the two. Similarly there is no warrant for classifying consistency as "education" so as to bring into the educational pigeon hole non educational features. It is in any event clear from the Decision, notably in paragraph D, that the Tribunal did not see consistency as an educational need. The need to evaluate the decision as a whole means that little may turn on occasional references to features in one part of the Statement which on a strict analysis should perhaps not be there. One gets nowhere for example weighing up the presence of "consistency" in Part 3 (just as it was in Tottmann) against its absence from details of Special Educational Needs found in Part 2. The Council submitted that if the parents were right in their submissions they would always have a veto if the educational provision was dependant on the provision of non educational matters; simply because the Tribunal cannot order that non educational provision. Mr McManus submits that this would cut down the ability of the Tribunal to order educational provision merely because it lacked the power to order non educational provision. The distinction between educational and non educational provision would collapse because if the parents argued for 24 hour a day education and lost they would still succeed by declining to provide or participate in the non educational care. He submits that this veto would also collapse the distinction between a duty and discretion on the part of the LEA to provide non educational provision. The LEA would be obliged to provide non educational provision which it would be powerless to do, if the parents objected, except by seeking to take the child into care. As I see it this is a valid concern. The LEA would in practice have an obligation despite the statute distinguishing between what it "shall" do as regards educational and "may " do for non educational. The elaborate and detailed arguments all boil down to the same issue. The Tribunal determined that suitable and appropriate special educational provision was made in the Council's proposed placement. It was led into a broader view partly by appearing to treat a need for consistency which they had found was not an educational matter as part of their Decision (as Ground 3 illustrates). The Tribunal is not concerned directly with non educational provision, has no power in relation to it and that provision is a matter of discretion for the Council. These wider considerations should not have affected its judgment although it is understandable that the members looked at a broader picture. The jurisdiction of the Tribunal is limited to the three matters in Section 326(1A) which I have set out above. An appeal against the special educational provision specified in the statement is just that. Having decided that the provision of Maythorn was not part of the special educational provision the Tribunal ceased to be concerned with whether or not they could order that element of provision for Ben. It was therefore an error of law for the Tribunal not to name Sunnyside in Part 4 having been, by the end of Paragraph F, on the point of doing so. The overall concern of the Tribunal that it could not enforce its decision by attaching a condition that Ben attend the Maythorn unit was understandable and well intentioned. But that limitation is a result of the statutory limit on its jurisdiction. It was not a relevant concern to a Tribunal whose jurisdiction was limited to Ben's special educational needs. It follows that the Tribunal's concerns were misplaced and, having reached the findings of fact and judgment which it did, it should have dismissed the parents' appeal against the Council's naming of Sunnyside in Part 4. Ground 4 The Council claims that if it is wrong in its other grounds the Tribunal erred in its approach to the reasons given for determining that Maythorn was not available. The council say that the Tribunal erred in failing to apply correctly Section 20(7) of the Children Act 1989. That subsection provides as follows:- "A local authority may not provide accommodation under this section for any child if any person who – (a) has parental responsibility for him; (b) is willing and able to – (i) provide accommodation for him; or (ii) arrange for accommodation to be provided for him, objects. The Council characterises this position as giving a non absolute right to those having parental responsibility to object to the provision of accommodation. Mr McManus QC refers to a number of passages in the material before the court in which Mr and Mrs Haslam are, very understandably, expressing a belief in Ben's need in future to have a specialist residential placement rather than remain at home because his challenges are increasing as he grows and not diminishing. The Tribunal had before it the judgment in R -v- Tameside MBC ex p J [2000] FCR 173 which it saw as establishing the principle that "it is clear from that case that parental responsibility remains with the parent and that such an arrangement requires parents consent". The Council say that the Tribunal overlooked the point, not dealt with in Tameside, that Section 20(7) means that where parents are in a position to provide suitable accommodation to the child they have the right to prevent the child being voluntarily accommodated elsewhere. But in this case the parents were not able to offer suitable accommodation elsewhere. The Council relies on the parents advancing a case that they could no longer accommodate Ben at home, the council's acceptance of this in its case statement, the Tribunal's finding at F that it was difficult to see how the parents at home could be an integral part of delivering the child's need for a consistent approach and the other evidence available in the papers. Mr McKendrick responds by submitting that the Council's interpretation of Section 20(7) is an unlikely one because it seeks to impose an additional responsibility on the parents when the plain meaning of the Section does not warrant this. The scheme of the Act permits an authority to override parental consent issues where the welfare of a child is prejudiced by unsuitable accommodation and to do this by a care order. Even if the Council's interpretation were correct there would need to have been, when the Tribunal took its decision, an assessment regarding whether the parents could provide Ben with suitable accommodation. Mr Friel submits that it if the Council's proposal was correct, and leaving to one side whether there was direct Children Act care planning involvement, the proposal would amount to placing Ben in care without due process, imposing a particular residential regime upon both him and his parents. He submits that Section 20 was not intended by Parliament to be used in this way. Ground 5, linked to grounds 1 and 2 alleges that the Tribunal erred in law, if Mr and Mrs Haslam were able to bring themselves within the right to object pursuant to Section 20(7), when it decided that the objection was an effective bar in law to their naming Sunnyside. The Council says that the Tribunal failed to take into account that the non educational provision to meet the need for extended respite care was the "option" of a 52 week placement at Maythorn. The Tribunal behaved irrationally in failing to conclude that the council had offered to provide Ben with appropriate non-educational provision. The parents respond that this ground makes little sense. If the interpretation of Section 20(7) urged in ground 4 is not correct, the parents rejected Maythorn and the Council was not prepared to consider care proceedings there was in reality no "option" for Ben to be placed at Maythorn. I conclude that I should not make findings on ground 4. As the Council has succeeded on its other grounds they are not necessary for my decision. That is itself not a reason for omitting to deal with these grounds. However it becomes so when taken with the fact that they raise issues apparently similar to those to be considered in Ben's separate application for judicial review, and touch on areas of family law, particularly the policy aspects relied on by Mr McKendrick and Mr Friel, best addressed by a specialist judge in that area. Furthermore no first instance findings would be required before an appellate court could appraise these two grounds if I am wrong about the first three.. Conclusion I conclude that the Tribunal erred in law and will hear submissions when this judgment is handed down about the most appropriate remedy. In the course of the hearing some submissions were properly directed to the fact that it has now become very difficult if not impossible for Mr and Mrs Haslam to manage Ben at home. This feature of the case may leave an inaccurate impression. Having read all the papers I wish to record the Court's admiration and respect for the remarkable efforts and sacrifices which Mr and Mrs Haslam have made over a long period not just to care for Ben but also to do so while at the same time raising and caring for their other children. I shall be grateful if suggested corrections of the usual kind and a note of any points which any party wishes to raise are sent to me not less than 48 hours before this judgment is handed down. GH010796/DC

THOMAS,J. Leave granted. There was a stir in support of the demand for a separate State of Uttarakhand companyprising of certain hilly regions of the State of U.P. and some other areas. The stir companylected momentum when the State Government issued a numberification in 1994 pertaining to reservation in educational institutions based on region-wise domicile. The agitationists fixed up the Gandhi Jayanti day in 1994 for staging a public rally at New Delhi for the twin objective of protesting against the numberification and to press the demand for the separate State. The administration took stern measures to resist the protestors march towards the National Capital as the officials claimed to have received secret information that the proposed rallysts were carrying lethal weapons in violation of the prohibitory orders issued by the Government and might create serious law and order situation. The companyfrontation which ensued had resulted in lot of blood-shed including loss of many lives, infliction of injuries on persons belonging to both sides, outraging the modesty of women ranging to ravishments. An association styling itself as Uttarakhand Sangharsh Samity for short the Samity moved a writ petition in the High Court of Allahabad before the Allahabad Bench on 6-10-1994, for different directions to be issued to the authorities to meet the companysequence of the said companyfrontation. A Division Bench of the High Court issued certain interim directions on 7-10-1994 one of which was to the Central Bureau of Investigation CBI for short to enquire into the allegations of human rights violations. The substance of the aforesaid directions is extracted below Thus, this Court calls upon the Home Secretary, Government of India and the Central Bureau of Investigation, through its Director General, by a writ of mandamus, to execute the investigation on the incidents which have happened in the regions of Garhwal and Kumaun, between 17 June 1994 the date of issue of the first order securing reservations in educational institutions including its applicability to these regions and until the investigation is determined. The investigation will also include the incidents narrated in this petition in the towns of Khatima, Mussoorie, Dehradun and near Muzaaffarnagar. The scope of the enquiry by the Central Bureau of Investigation, on its discretion, will number remain curtailed to these towns relating to deaths and injuries and molestation of women by police. But, the investigation will be companyfined to a the agitations in the regions of Garhwal and Kumaun, and to include the Muzafarnagar incident, b the matters companynected with the agitations for Uttarakhanad only, c companysequential detentions of the agitationists, da the agitators detained, e details of injuries, deaths and molestation of women, and f damage to property, as a companysequence of these agitations within the aforesaid regions. The CBI took up investigation pursuant to the said directions and laid charge-sheet against certain officers on 19-1-1995 for offences under Sections 109 and 120-B read with Sections 341 and 342 of the Indian Penal Code. Sanction of the State Government was obtained for launching prosecution in respect of those offences. Some of the accused who were arrayed in the said charge-sheet filed Writ Petitions Nos.3463 and 3515 of 1995 before the Lucknow Bench of the High Court of Allahabad, in challenge of the validity of the sanction order issued by the State Government for prosecuting them. On 9-2-1996 the Division Bench of the High Court of Allahabad Ravi S. Dhawan and A.B. Srivastava, JJ disposed of the first mentioned writ petition filed by the Samity holding, inter alia, that numbersanction of the Government is required under Section 197 of the Code of Criminal Procedure for short the Code for prosecuting the officials as for any of the offences companymitted by them while resisting the rallysts. In view of the aforesaid stand adopted by the Allahabad Bench of the High Court, Writ Petitions 3463 and 3515 of 1995 were dismissed by Lucknow Bench of the High Court on the premise that those writ petitions have become infructuous. SLPs were filed by the Union of India and the Government of U.P. as well as some of the aggrieved officials in challenge of the judgment dated 9-2-1996. SLPs are also filed against the judgment by which writ petitions were dismissed by the Lucknow Bench as having become infructuous. We are told that the accused arraigned in the charge-sheet filed by the CBI on 19-1-1995 were discharged by the trial companyrt subsequently. If that be so, SLP Criminal No.1810 of 1996 and SLP Civil No.12485 of 1996 which were filed against the judgment of the Lucknow Bench must be treated to have become infructuous. We do so. However, learned companynsel for the petitioners therein expressed apprehension that the order of discharge may be set aside and the accused therein may have to face prosecution. A revision petition is pending before the High Court in challenge of the aforesaid discharge order. It is submitted before us that in case the order of discharge is set aside for any reason, dismissal of the aforesaid two SLPs should number debar the petitioners from challenging the validity of the sanction order. We preserve the said right of the petitioners companycerned for challenging the validity of the sanction if such a companytingency as apprehended would arise in future. The Judgment under attack delivered by the Division Bench of the Allahabad High Court dated 9-2-1996 companysists of a lot of directions. Both the judges of the Division Bench wrote separate judgments, each of them is voluminous in size and in the end the directions were catalogued by the Division Bench under 19 heads as per the companymon judgment. We propose to skip major portion of the judgments as all the learned companynsel who appeared for the parties in this Court were unanimous in expressing that a large chunk of the judgments companytains unnecessary deliberations without any nexus with the points in companytroversy. We too share the view expressed by both sides. It is unfortunate that the judgments under challenge companytain a lot of rigmorale and learned Judges companyld have focussed on the companye issues without niggling on academic subjects. Shri D.D. Thakur, learned companynsel took strong objection to the following observations made by Dhawan, J This companyrt, of the cases which were brought in large scale violations of human rights have been occasioned at the hands of the respondents already named in the reports of the Central Bureau of Investigation and that these violations have also partaken the nature of companystitutional torts. Only for demonstrating for fulfillment of the promise formalised by the legislature of the Uttar Pradesh and under discussion with the Union Government that the people of Kumaon and Garhwal should receive statehood the civil rights activities had to suffer what seemed like a direct attack by functionaries of the government aimed at them as a class. Learned senior companynsel submitted that High Court should have refrained from making such observations, and such pre-judging of the cases pending before the criminal companyrts should have been averted. We agree with the said submission of the learned senior companynsel that learned judges should have avoided making observations companycerning matters which are pending companysideration by subordinate companyrts. The High Court did more than that. Without trial, and even without companysidering the evidence which may be adduced in the cases, learned Judges ordered the Government to pay Rs.10 lakhs each to the dependants of all the persons who died in police firing. Rs.10 lakhs each were given to the victims of molestation, Rs. Fifty thousand each for 398 persons who were detained by the police. All the learned companynsel made scathing attack on the rationale of the High Court in fixing up such huge sum as companypensation at a premature stage. They companytended that the High Court while imposing such heavy liability on the State has number made any attempt to discuss the relevant questions which are to be answered for fixing liability of companypensation and for quantification of the amount of companypensation. On companysideration we are satisfied that there is ample substance in the companytentions raised by the learned companynsel in this regard. The direction for payment of companypensation is clearly unsustainable and is liable to be vacated. We are told that pursuant to the directions in the impugned judgment amounts have been disbursed to all those persons who claimed it. We, therefore, make it clear that numberfurther amount need be paid as companypensation pursuant to the judgment of the High Court but if any sum has been disbursed to claimants the State will number recover the same from them. We also make it clear that if any person has number made his her claim or has number received companypensation despite making a claim for it, it will be open to him her to approach the companypetent Court for companypensation in accordance with law. The serious criticism made by the learned companynsel against the direction issued by the High Court, regarding fund allotment for the development of certain regions, cannot be side stepped. That direction is in the following lines Damages and companypensation for companystitutional wrongs companymitted subjecting injuries to the class of people of Kumaun and Garhwal for their only fault that they were securing their civil rights on the guarantee already given by the legislature, as discussed in the judgment, the repairment to the people of Kumaun and Garhwal Divisions shall stand related to their population 5,926,146 Kumaun 2,943,199, Garhwal 2,982,947 in the equation of a rupee per month per person for a plan period of five years and this companypensation shall be invested amongst the population of Kumaun and Garhwal earmarked specifically for a programme for the upliftment of the woman 50 paise of this reparation shall companye from the State of Uttar Pradesh and the other 50 paise from the Union of India. This would be in addition to the numbermal plan allocation which this area would receive as what the companyrt is suggesting is damages beyond the numbermal allocation. The details of the allocation will be chalked out and formalised at a meeting which will be called by the Commissioners of Kumaun and Garhwal representing Members of Parliament of the area ii Members of the Legislative Assembly of the area, and iii the District Magistrates of the district companycerned. The magnitude of the financial burden for companyplying with the said direction has been approximately estimated as amounting to several crores of rupees. The money has to companye out of State companyfers. A criticism made against such direction is that learned Judges of the High Court did number take into account the financial capacity of the State Government, number its resources for making up the said amount number the priorities to be honoured by the State Government number even the legislative mandates involving State funding, while ordering the Government to incur such huge expenditure of a recurring nature. This is number a case where the High Court was ordering companypensation to one individual or even to a limited number of persons de horse its legal liability enjoined by statutory provisions. For Kumaun region the State Government will have to raise a very substantial amount of about 36 crores of rupees, and for Garhwal region another huge amount has to be raised, if the impugned judgment is in force. As the learned Judges did number indicate how the Government should make up the whopping amounts, we are unable to companycur with the aforesaid direction. We cannot ignore the reality that major revenue of the State Government is through taxation. But numbertaxation is possible without legislative sanction. Government must have other resources to meet the direction. It may be that people of Kumaun and Garhwal require much upliftment. But they are number the only regions to be attended to by the State or Central Government. Every part of the companynty requires further development. If the High Courts are to issue such directions for each region, using different writ petitions, financial policy may have to be restructured by the Governments. Judicial creativity has, numberdoubt, expanded to newer dimensions in recent past, but that is numberjustification for using judicial power for imposing such unbearable burden on the State which in turn would be companypelled to extract money out of companymon mans companyfers to meet such massive financial burden. Suffice it to say that the above direction cannot stand judicial scrutiny and it is hereby set aside. The Division Bench of the High Curt then proceeded to companysider whether sanction of the Government is required for prosecution of Government officials for the offences mentioned in the charge-sheet filed by the CBI. Learned Judges first held that there is numbernecessity for sanction to investigate into the offences. The following observations were made for that purpose The High Court did number need any sanction to require the C.B.I. to inquire and investigate into alleged violation of companystitutional torts when citizens brought these petitions to the companyrts, whether the High Court or the Supreme Court. The Supreme Court had already made it clear that when the C.B.I. is called upon to investigate any matter, the sanction of the Central Government is number necessary. A companyollary follows that the C.B.I. would number need any sanction when, acting under the orders of the High Court, after inquiry and investigation, it has companye to a prima facie companyclusion that as an investigating agency it is obliged to draw up a charge-sheet. Nobody raised a companytention that sanction of the Government is required for ordering investigation. Therefore, the aforesaid exercise of the High Court was one in futility. But the High Court further proceeded and held that numbersanction is necessary for prosecuting the Government officials as it is number part of any official duty to fire on unarmed political activists, exhume dead bodies of agitators shot in an agitation, loot or plunder unarmed people, and rape and molest women. Learned companynsel who argued for all the appellants seriously assailed the findings of the High Court, firstly, on the ground that question of sanction under Section 197 of the Code should number have been companysidered in a writ petition filed by the Samity and secondly, on the ground that even otherwise the High Courts reasoning is absolutely faulty. It is doubtful whether learned Judges would have meant that numbersanction is required for the companyrt to take companynizance of the offences as the observations were companyfined to the stage up to laying the charge-sheet. But we agree that the effect of the observations of the learned Judges is to companyvey the message that High Court is of the view that numbersanction is required for such prosecution. We are told that the magistrate before whom the charge-sheets were laid has taken companynizance of offence under Section 302 of IPC among other offences. Learned senior companynsel appearing for the respondents argued that numbersanction under Section 197 of the Code can be companytemplated as for the offence of murder, for, that offence cannot, by any stretch of imagination, be regarded as companymitted in the discharge of official duties. In reply thereto it was argued that the magistrate had gone companypletely wrong in taking companynizance of the offence under Section 302 of the IPC because the entire allegations, even assuming that they are true, would only fall within the companytours of Exception No.3 of Section 300 IPC. Counsel companytended that the offence on which companynizance companyld have been taken was only Section 304 IPC and number Section 302 IPC. We do number think it necessary to decide the question regarding the offences to be included in the charge which may be framed against the accused persons because that work has to be done by the Sessions Judges companycerned after hearing both sides, as provided under Section 228 of the Code. Appellants can raise their arguments regarding what offences can be included in the charge at the appropriate stage. The question of necessity of sanction need be companysidered by the Sessions Judge if and when raised by the accused. We have numberdoubt that the High Court should number have embarked upon a discussion regarding sanction at such a premature stage, that too in the writ petition filed by the Samity. If the finding of the High Court is that numbersanction is required such finding has to be treated as bad mainly because that question has to be decided after taking into account various companysiderations including the fact situation in each case. Learned Judges issued the following directions regarding the venue of the trial of different cases Trial for offences within the districts of Kumaun region is to be held by the companyrt in sessions Division at Nainital and for the offences within the districts of Garhwal region, Haridwar and Muzzafarnagar, to be held in the companyrt in Sessions Division at Dehradun. Where a special companyrt does number exist, in any of the two sessions divisions, as above, it shall be established by the State of U.P. in companysultation with the High Court, within one month and until so established, the charge sheet, in companytext, shall be submitted into the companyrt of the Chief Judicial Magistrate, and deal with in accordance with chapter XVI of the Code of Criminal Procedure. The jurisdiction of the Court can be decided on the factual foundation in each case for offences within the districts seems to be true with an expression incorporated in the aforesaid directions. We are of the view that the High Court should number have pre-empted the Court, before which, each case would companye up in the numbermal companyrse, to determine the question of jurisdiction, if it is raised by any of the parties. It is difficult for us to companyprehend what the learned judges would have meant by special companyrt to be established by the State Government. There is numbersuggestion in the impugned judgment as to what are the offences alleged to have been companymitted by the officials under any special enactment. The aforesaid direction extracted above if allowed to remain in force would create only companyfusion and provide room for procrastination of the trials When the above mentioned directions of the High Court are unsustainable numberhing further survives, because the remaining directions in the judgment are only ancillary or incidental to those main directions.

Lord Justice Patten : Introduction These are consolidated appeals by the Claimant and the Defendant against two orders of HH Judge David Cooke, sitting as judge of the Chancery Division, made on the hearing of various preliminary issues. The appeals are brought with the leave of the judge. In 2006 the Claimant, AIB Group (UK) plc ("AIB") received an application from Dr Ravindra Sondhi and his wife Dr Salma Sondhi for a loan of £3.3m in order to provide finance for their business. The Sondhis were medical practitioners who ran a number of care homes. The loan was to be secured on their private home. The application form stated that this property was worth £4.5m but was subject to an existing mortgage in favour of Barclays Bank to secure an outstanding loan of £1.5m. AIB agreed to provide the re-finance but required security over the Sondhis' home in the form of a first legal charge. AIB instructed the defendant firm of solicitors, Mark Redler and Co ("MRC"), to act for it in connection with the remortgage. It supplied the firm with a copy of the facility letter of 4th July 2006 in which it stipulated the requirement of a "First Legal Mortgage in the Bank's standard form over the Property" and which made it a condition of the loan that "the Applicants' existing home mortgages (if any) must be redeemed on or before the completion of this . . . facility". The judge therefore found that MRC was aware that AIB required it to obtain a first legal mortgage over the property. The subsequent history of the transaction is set out in paragraph 7 of Judge Cooke's judgment, based on a schedule of facts which was agreed for the purpose of the trial of the preliminary issues. Because the Defendant's appeal raises issues as to precisely when and in what circumstances the remortgage was completed I propose to set out the relevant parts of the judgment in full and to return later to certain aspects of the transaction in more detail:- "7. (vi) On 22 July 2006, Mr Mark Redler, the defendant's senior partner, met the borrowers. He was told by them at that meeting that the property was charged to Barclays and that their debt to Barclays was approximately £1.5 million. They told him that they wished to complete the remortgage by 31 July, and expressed a great deal of urgency about doing so. Mr Redler obtained from his clients a signed mortgage document in the form provided by the bank, to be held pending completion. (vii) On 28 July, a Friday, Mr Redler sent a letter by fax (2/668) to Barclays asking for a redemption statement as at Monday 31 July, stating that it was hoped to complete the remortgage on that day. Barclays' initial response (2/682) sent on the Monday was to return the letter saying that it could not be acted upon unless a correct mortgage account number was quoted. This may have crossed with a further fax from the defendant on the same date (2/683) repeating the request. (viii) Also on Monday 31 July, the defendant sent the certificate of title in the bank's required form by fax to its securities Department, requesting that the amount of the advance be sent by funds transfer to their client account. The funds were received by the defendant at 13.03 on 1 August. (ix) The second letter to Barclays did produce a response, in the form of a faxed letter dated 31 July but apparently received on Tuesday, 1 August 2006 (1/407). That letter referred to two account numbers, and attached two documents entitled "Mortgage Valuation Statement", one for each account. The letter made clear that these were not redemption statements, saying: "Thank you for your request for a balance in respect of the above accounts. The amount quoted is an indication of the current balance outstanding at the date you have requested. This may not be the figure required to effect full redemption. IMPORTANT INFORMATION THIS IS NOT A REDEMPTION STATEMENT For a redemption figure to be issued, you must make a request for a Redemption Statement at least three working days before the intended redemption date. Due to the flexible nature of the mortgage and linked accounts, the amount required to redeem is likely to differ from this quotation. Should your clients wish to redeem the mortgage, please contact us on 0845 607 6603 to request a Redemption Statement. You will need to provide your client's mortgage account number when you call." (Emphasis and capitalisation in the original). The significance of making clear that the documents were not "redemption statements" would be that the bank would not be bound to release its charge on receipt of the sum stated, for example if some error should be found, or further liability incurred to it by additional borrowing on a flexible account. (x) Mr Redler's evidence was that he asked an employee, Miss Brown, to telephone Barclays and obtain a redemption figure. Miss Brown gave evidence, exhibiting a telephone note she made (1/485) recording that she had spoken to someone called Vicky at Barclays and noting "figure to redeem is £1,235,785.07" with the details of the bank account to which it should be sent. She was unable to say whether she had given any mortgage account numbers to Vicky in this conversation. If she had seen the fax referring to the two accounts, she obviously did not notice that the figure given could only have related to one of them. (xi) In his oral evidence, Mr Redler said that he could only recall seeing one of the pages from the Barclays fax, being the statement relating to the larger of the two accounts. He said that he had telephoned Dr Ravindra Sondhi because the amount was lower than the £1.5 million he had been expecting, and Dr Sondhi had confirmed that it was correct, or at least not told him that it was too low. He could not say why he would only have seen one page of the fax (which had five pages in all) and accepted that if he had seen the whole fax, or read the covering letter, he could not have failed to notice that the figure quoted was insufficient to discharge both accounts. (xii) In accordance with her instructions from Mr Redler, Miss Brown gave instructions for the amount she had been quoted by Vicky to be sent by telegraphic transfer to Barclays, and for the balance, deducting the firm's costs, to be sent to the borrower, all of which happened on the afternoon of 1 August 2006. The form of mortgage deed was completed with the date 1 August 2006. (xiii) Mr Redler did not seek to excuse his firm's omissions, which are accepted to have been negligent. At the conclusion of the witness evidence Mr Cousins confirmed that he did not seek to pursue any argument that Mr Redler or the defendant had acted otherwise than in good faith. (xiv) The result was that the amount sent to Barclays was insufficient to discharge its secured debt and it subsequently refused to do so. It has not been contended before me that Barclays had given any binding assurance that it would release its security. The defendant was not able to procure the registration of AIB's charge until it was in a position to submit a discharge of Barclays' charge. For some time, Mr Redler did not alert AIB to the difficulty that had arisen. He contacted Dr Sondhi who promised that he would return sufficient funds to enable the outstanding amount due to Barclays to be cleared, but failed to comply with this promise over a period of several months. In the meantime, Mr Redler protected the priority of AIB's charge by continuing to renew his priority search at the land registry. (xv) Eventually, the problem came to light. The evidence before me does not deal in detail with what then happened, though it appears that AIB entered into direct discussions with Barclays. I have no information, for instance, as to whether AIB offered, with or without the assistance of the defendant, to discharge the outstanding sum due to Barclays, or if so why that did not occur. On 28 April 2008, AIB and Barclays entered into a deed of postponement by which Barclays permitted AIB's charge to be registered as a second charge on the property, limiting its priority in respect of its own charge to £273,777.42, plus interest, costs and expenses. That principal amount was somewhat less than the balance outstanding at 1 August 2006 (approximately £309,000) by virtue of repayments that the Sondhis had made in the meantime. AIB's charge was finally registered on 9 May 2008. (xvi) AIB obtained judgment against the Sondhis for a total exceeding £3.5 million, and an order for possession of the property, on 14 July 2010. It was subsequently sold for £1.2 million, of which just over £300,000 was paid to Barclays in satisfaction of their first charge, and the balance (after costs) of £867,697.78 to AIB on 14 April 2011. Bankruptcy orders were made against the Sondhis on 14 June 2011." MRC accepts that its failure to notice the full amount of the secured debt to Barclays and as a consequence to obtain a first legal charge over the Sondhis' home as security for the AIB loan was negligent. But AIB does not limit its claim to one of damages for breach of the contract of retainer. It accepts that had its instructions been followed it would have made the loan to the Sondhis and would have suffered financial loss as a result of their subsequent default. The only difference between its current position and the one in which it would have found itself had the first charge been obtained is that it would have had an additional £300,000 worth of security for its loan. The contractual measure of damages is therefore limited to this sum, which represents the amount necessary to put AIB in the position it would have been in had MRC secured the redemption of the Barclays' charge in accordance with their contractual duties to the client: see Livingstone v Rawyards Coal Company (1880) 3 App Cas 25 at page 39. AIB's principal claim is for breach of trust. It was and is common ground that the mortgage advance paid into MRC's client account remained trust monies in its hands unless and until disbursed in accordance with the authority of AIB as client. AIB alleges that MRC's release of the mortgage advance without obtaining a first legal charge (or indeed any security) on completion was unauthorised and a breach of trust which renders the solicitors liable to reconstitute the fund in their client account. Although the measure of loss falls to be assessed at the date of judgment the bank's subsequent obtaining of the second charge does not, AIB says, relieve the Defendant of liability because it was not the security for which AIB stipulated. It only comes into account so far as it enabled AIB to recover part of the mortgage advance from a sale of the mortgage property for which it must give credit. Otherwise its loss from the unauthorised distribution of its money extends to the entirety of the original advance, which is the loss which it suffered as a result of entering into the transaction. It is not limited to the loss attributable to the solicitors' failure to obtain the necessary security. MRC denies that it acted in breach of trust. Its pleaded case is that it was authorised to release the advance monies on completion of the remortgage transaction. This, it alleges, occurred on 1st August 2006 when it paid the sum of £1,235,785.07 to Barclays and the mortgage deed previously executed by the Sondhis was dated. The balance of the advance was not disbursed to the borrowers until the following day. MRC's case is, in summary, that it had authority to pay away the advance monies on completion. A failure to comply with each one of the clients' instructions does not make that payment a breach of trust unless compliance with that condition is clearly intended to govern the solicitors' authority to release the monies. In most cases (and in this case) the solicitors were authorised to release the funds on completion, which took place when they were satisfied that the borrowers had good title to the intended security and had executed a legal charge in the form necessary to give AIB the security which it required. All this was done by close of business on 1st August. The obtaining of a first legal charge was not, and in practice never can be, a condition precedent to the solicitors' authority to release the mortgage advance because in a remortgage transaction it will depend upon the prior redemption of the existing lender's charge, which necessitates the earlier release of the new advance. MRC therefore denied any liability for breach of trust. In the alternative it sought relief from such liability under s.61 of the Trustee Act 1925. On 9th September 2011 Judge Cooke ordered the trial of the following preliminary issues: i) did the Defendant act in breach of trust in releasing the Advance Monies in the circumstances pleaded in paragraph 22 of the amended particulars of claim? and ii) if so, to what remedy, if any, is the Claimant entitled? The judge held that the Defendant had acted in breach of trust to the extent that it released to the borrowers the amount of £273,774.42 which was the additional sum required to repay the balance outstanding on the second Barclays' loan account. But he rejected the claim that the release of the entire £3.3m advance was made in breach of trust: "23. In the present case, in my judgment what the defendant's instructions authorised them to do with the funds paid to them was to pay to Barclays (or to its account) such sum as was required to procure a release of its charge, and to pay the balance to the borrowers or to their order. Had they complied with their instructions they would have paid (taking all the figures in round terms) £1.5m to Barclays and £1.8m to the borrowers. In the event they paid £1.2m to Barclays and £2.1m to the borrowers. In my judgment, in so doing they committed a breach of trust insofar as payment was made contrary to the authority they had been given. 24. It does not however in my judgment necessarily follow that the whole of the payment out of £3.3m was made in breach of trust. The difference between what the defendant did and what it ought to have done if it had complied with its instructions was the £300,000 that should have been paid to Barclays but was instead paid to the borrowers. That in my judgment was the extent of the breach of trust committed. It was not a breach of trust to pay £1.2m to Barclays; that payment was made as partial performance of the authority and obligation to discharge Barclays secured debt. It was not a breach of trust to pay £1.8m to the borrowers, as that was the sum to which they were entitled. The breach consisted of the failure to retain an additional £300,000 and apply that to discharge of Barclays debt." He therefore awarded AIB equitable compensation in that sum, which with interest amounted to a total of £323,501.38. AIB challenges his order on the ground that the Defendant had no authority to pay away any of the mortgage advance pending completion, which could only take place once the solicitors had either received all the documents necessary to register the new charge over the Sondhis' property as a first legal mortgage or were in receipt of a solicitor's undertaking (or, failing that, an undertaking from Barclays itself) to release the existing prior charge on payment of a specified sum, coupled with a Form DS1 to enable AIB to secure registration of its own charge as a first legal mortgage. On its case there was therefore never completion of the remortgage transaction in accordance with its instructions and it is entitled to equitable compensation in an amount (after giving credit for recoveries) which will restore it to the position it was in immediately before the breach occurred. The issues therefore to be considered are: i) Was there a breach of trust and, if so, was it limited to the release of the £273,777.42 as found by the judge; ii) If the release of the entire £3.3m mortgage advance was in breach of trust, what remedy is AIB entitled to; and iii) Ought the Defendant to be relieved of liability under s.61 of the Trustee Act 1925? Breach of Trust Under a conventional private trust the beneficiaries are entitled to have their property administered and (so far as necessary) invested by the trustee in a prudent and business-like manner in accordance with the powers contained in the trust deed. Most cases of breach of trust will involve the unauthorised or imprudent investment or disposal of trust property; transactions involving trust property where the trustee has a conflict of interest or duty; and in some cases straightforward misappropriation of trust property. Client money in a solicitor's account may of course be lost or stolen and in such cases the liability of the solicitors to restore the fund is obvious. But where the loss is sustained in the context of a much wider commercial transaction, of which the payment of the funds into a solicitor's clients' account forms a very small (and almost insignificant) part, it becomes much more difficult but equally important to apply established principles of equitable recovery in a way that is proportionate to the true nature of the loss. One can begin with the issue of liability itself. The solicitor holds his client's money on trust merely because it remains the property of his client until disbursed to a third party in accordance with the client's instructions. But the instructions which he receives and carries out are (as in this case) usually part of his contractual retainer for breach of which a claim in damages will lie. They are not as such the terms of the trust, nor does the solicitor act as a trustee in respect of them. His failure properly to carry out some term of the retainer linked to a property transaction will not therefore ordinarily expose him to any liability as a trustee even though it may affect the value of the property interest which the solicitor acquires or disposes of as part of his instructions. In a mortgage or remortgage transaction of the kind under consideration the solicitor is retained to enable the client to obtain the security for which the lender has stipulated as a term of the loan. His failure to take sufficient care to ensure that the lender obtains a valid charge, or in this case a first legal mortgage, will undoubtedly entitle the lender to compensation for the loss which has subsequently been occasioned by the lack of the appropriate security. But the solicitor does not warrant that the transaction will be loss-free and if the lender would have suffered losses even with the benefit of the intended security he will not be able to recover them from the solicitor for breach of the retainer. The breach of trust claim, if successful, has therefore the potential to transform the measure of recovery available to the lender in such circumstances. By treating the solicitor's failure to put in place a first legal charge as negativing the firm's authority to proceed with the release of the mortgage advance, the lender is able to assert that it is entitled to recover the entirety of this advance and so obtain an immunity from the commercial losses it has suffered on the transaction, even if they would still have been incurred with the benefit of the first legal mortgage and notwithstanding that the alleged vitiation of the solicitor's authority to complete is based solely upon his failure to obtain such a charge. The lender would, therefore, paradoxically be in a better position as a result of the solicitors' breach of duty than he would have been had the retainer been observed to the letter. Trust claims made in a commercial context of this kind are not new and have already been considered both in this court and in the House of Lords. In Target Holding Limited v Redferns [1996] 1 AC 421 the solicitor instructed on behalf of a mortgage lender paid away the mortgage advance before the mortgagor had even purchased the intended security. He did so to enable the mortgagor to finance the earlier stages of a series of simultaneous purchases and sub-purchases which were almost certainly part of a fraud intended to inflate the purchase price paid by the mortgagor. But approximately one month after the monies had been released the mortgagor completed its purchase of the property and executed the intended charge over it in favour of the mortgagee. In subsequent proceedings the mortgage lender sued the solicitor for breach of trust occasioned by his premature and unauthorised release of the mortgage advance and sought the reconstitution of the fund notwithstanding that the lender subsequently obtained the title and security which it had stipulated for. The House of Lords held that although the monies were released in breach of trust the lender had obtained what it would have acquired had no breach of trust occurred and that it had therefore suffered no loss. The decision is therefore principally relevant to the issues of remedy and causation. But on the question of liability Lord Browne-Wilkinson said this at page 436 A-F: "This case is concerned with a trust which has at all times been a bare trust. Bare trusts arise in a number of different contexts: e.g. by the ultimate vesting of the property under a traditional trust, nominee shareholdings and, as in the present case, as but one incident of a wider commercial transaction involving agency. In the case of moneys paid to a solicitor by a client as part of a conveyancing transaction, the purpose of that transaction is to achieve the commercial objective of the client, be it the acquisition of property or the lending of money on security. The depositing of money with the solicitor is but one aspect of the arrangements between the parties, such arrangements being for the most part contractual. Thus, the circumstances under which the solicitor can part with money from client account are regulated by the instructions given by the client: they are not part of the trusts on which the property is held. I do not intend to cast any doubt on the fact that moneys held by solicitors on client account are trust moneys or that the basic equitable principles apply to any breach of such trust by solicitors. But the basic equitable principle applicable to breach of trust is that the beneficiary is entitled to be compensated for any loss he would not have suffered but for the breach. I have no doubt that, until the underlying commercial transaction has been completed, the solicitor can be required to restore to client account moneys wrongly paid away. But to import into such trust an obligation to restore the trust fund once the transaction has been completed would be entirely artificial. The obligation to reconstitute the trust fund applicable in the case of traditional trusts reflects the fact that no one beneficiary is entitled to the trust property and the need to compensate all beneficiaries for the breach. That rationale has no application to a case such as the present. To impose such an obligation in order to enable the beneficiary solely entitled (i.e. the client) to recover from the solicitor more than the client has in fact lost flies in the face of common sense and is in direct conflict with the basic principles of equitable compensation. In my judgment, once a conveyancing transaction has been completed the client has no right to have the solicitor's client account reconstituted as a "trust fund"." It is, I think, common ground in the light of these and other judicial observations that a solicitor who parts with client money before completion without authority commits a breach of trust. But the difficulties mentioned earlier, which can result from treating as a breach of trust the unauthorised release of monies held in a solicitor's account as part of a larger commercial transaction, have led to the courts adopting a conservative approach to the construction of any term of the solicitor's retainer or instructions which is said to operate as a precondition to his authority to disburse the client money under his control. The most quoted example of this can be found in the judgment of Millett LJ in Bristol and West Building Society v Mothew [1998] Ch 1, where a mortgage loan was offered on terms that the borrowers would complete the purchase without any resort to further borrowing. The lender's solicitor was required to report to the society prior to completion any proposal by the purchasers for further borrowing but negligently failed to disclose the existence of a bank debt which was to be secured by a second charge over the property. After the borrowers defaulted and the property was sold the society sought to recover a shortfall on its security from the solicitor by way of compensation for breach of trust on the basis that the solicitor had had no authority to complete without informing the society of the second charge. The claim for breach of trust was rejected by the Court of Appeal. Millett LJ, (at pages 22 and 24) said that:- "It is not disputed that from the time of its receipt by the defendant the mortgage money was trust money. It was client's money which belonged to the society and was properly paid into a client account. The defendant never claimed any beneficial interest in the money which remained throughout the property of the society in equity. The defendant held it in trust for the society but with the society's authority (and instructions) to apply it in the completion of the transaction of purchase and mortgage of the property. Those instructions were revocable but, unless previously revoked, the defendant was entitled and bound to act in accordance with them. The society's instructions were not revoked before the defendant acted on them, and in my judgment there was no ground upon which the judge could properly conclude that his authority to apply the money in completing the transaction had determined. . . . Before us the society put forward a more sophisticated argument. The defendant's instructions, it pointed out, expressly required him to report the arrangements in question "to the society prior to completion". This, it was submitted, made it a condition of the defendant's authority to complete that he had complied with his obligation. Whether he knew it or not, he had no authority to complete. It was not necessary for the society to revoke his authority or withdraw from the transaction. I do not accept this. The society's standing instructions did not clearly make the defendant's authority to complete conditional on having complied with his instructions. Whether they did so or not is, of course, a question of construction, and it is possible that the society could adopt instructions which would have this effect. But it would in my judgment require very clear wording to produce so inconvenient and impractical a result. No solicitor could safely accept such instructions, for he could never be certain that he was entitled to complete. In my judgment the defendant's authority to apply the mortgage money in the completion of the purchase was not conditional on his having first complied with his contractual obligations to the society, was not vitiated by the misrepresentations for which he was responsible but of which he was unaware, had not been revoked, and was effective to prevent his payment being a breach of trust. Given his state of knowledge (and, more importantly, that his authority had not been revoked), he had no choice but to complete." The Defendant's argument in this case, that it committed no breach of trust in releasing the £3.3m mortgage advance before obtaining a first legal charge for its lender client, is a difficult one if the obtaining of such security (or the provision of a solicitor's or bank's undertaking to release the Barclays' charge) must take place prior to or simultaneously with the release of the money as part of completion. It would, I think, be difficult for the Defendant to argue that it had any general authority to release the monies prior to completion and this is not how the firm puts its case. The issue of authority therefore largely turns in this case on whether what occurred on 1st August 2006 constituted completion for the purposes of authorising the release of the mortgage advance to Barclays and subsequently the borrowers, notwithstanding that the mortgage deed executed by the Sondhis was subsequently never registered as a first charge over the security. MRC was instructed by letter of 5th July 2006 which included a copy of the facility letter. As mentioned earlier this specified the security to be taken as a first legal mortgage over the Sondhis' home and made it a condition of the mortgage account that any existing home mortgages must be redeemed "on or before completion of this CAM [current account mortgage] facility". The letter stated in terms that the firm was instructed in accordance with the Second Edition of the Council of Mortgage Lenders' Handbook ("the CML Handbook"). The CML Handbook stated:- "5.4.1 The title to the property must be good and marketable free of any restrictions, covenants, easements, charges or encumbrances which, at the time of completion, might reasonably be expected to materially adversely affect the value of the property or its future marketability. . . . 5.8 First Legal Charge On completion, we require a fully enforceable first charge by way of legal mortgage over the property executed by all owners of the legal estate. All existing charges must be redeemed on or before completion, unless we agree than an existing charge may be postponed to rank after our mortgage. Our standard deed or form of postponement must be used. . . . 6.1.1 The loan to the borrower will not be made until all relevant conditions of the mortgage offer which need to be satisfied before completion have been complied with and we have received your certificate of title. . . . 10.3 You are only authorised to release the loan when you hold sufficient funds to complete the purchase of the property and pay all stamp duties and registration fees to perfect the security as a first legal mortgage or, if you do not have them, you accept responsibility to pay them yourself. You must hold the loan on trust for us until completion. If completion is delayed, you must return it to us when and how we tell you (see part 2). . . . 14. AFTER COMPLETION 14.1 Application to HM Land Registry 14.1.1 You must register our mortgage at H M Land Registry. Before making your H M Land Registry application for registration, you must place a copy of the results of the Official Search on your file together with certified copies of the transfer, mortgage deed and any discharges or releases from a previous mortgage." On 31st July 2006 the Defendant provided a certificate of title in AIB's standard form which stated:- "We the Conveyancers named above give the Certificate of Title set out in the Appendix to Rule 6(3) of the Solicitors' Practice Rules 1990 as if the same were set out in full, subject to the limitations contained in it." Clause (2)(i) of that appendix reads as follows:- "Except as otherwise disclosed to you in writing . . . we have investigated title to the property, we are not aware of any other financial charges secured on the property which will affect the property after completion of the mortgage and, upon completion of the mortgage, both you and the mortgagor . . . will have a good and marketable title to the property and to appurtenant rights free from prior mortgages or charges and from onerous encumbrances which title will be registered with absolute title." By then MRC had carried out the necessary local searches, obtained office copy entries for the registered title to the property and obtained a deed of consent to mortgage from the borrowers' son, who was in occupation of the mortgage property. Mr Redler had also met the borrowers, been through the mortgage offer with them and had obtained from them the executed mortgage deed which was held on file pending completion. MRC then requested a redemption figure from Barclays as described earlier in paragraph 4. On the same day a letter was sent by DX and fax to AIB enclosing the certificate of title and advising them that the Sondhis wished to complete that day (i.e. 31st July) if possible. The mortgage advance of £3.3m was not sent to MRC until 12.44 on 1st August. Payment to Barclays of the £1,235,785.07 took place by CHAPS transfer at 2.49 pm, after Ms Brown had spoken to a woman called Vicky at Barclays. MRC's case is that by then everything necessary to achieve completion of the remortgage was in place in that the searches had been done; priority had been obtained for AIB in respect of the registration of the charge; the mortgage deed had been executed by the borrowers; and MRC was in receipt of sufficient funds to enable them to redeem the existing Barclays' charge. Mr McPherson QC submitted that the underlying commercial transaction was therefore complete and that MRC was accordingly authorised to pay away the mortgage advance. Its failure to send to Barclays sufficient monies to enable the prior charge to be redeemed (whilst undoubtedly negligent and a breach of their retainer) was a post-completion event and not therefore a breach of trust. To support this argument we were referred to various cases in which the court has had to consider when completion took place in the context of a claim for breach of trust based upon the allegedly unauthorised disbursement of a mortgage advance. In Lloyds TSB plc v Markandan and Uddin [2012] EWCA Civ 65 some fraudsters posing as a firm of solicitors purported to act for the vendors of a registered freehold property which the purported purchaser wished to buy with the benefit of a mortgage. The property was not in fact for sale and its owners were ignorant of the fraud. The purchaser made an application for a loan to the claimant lender which instructed the defendant's solicitor to act for it in relation to the proposed mortgage. They were instructed, as in this case, in accordance with the CML handbook. This included the provisions of ss.5.8 and 10.3 quoted earlier and also a requirement in s.14.1.1 that the mortgage should be registered after completion as a first legal charge. The solicitors made the relevant searches; provided a certificate of title to the lender; and then received the mortgage advance in their client account. There was to be a simultaneous exchange of contracts and completion and the fraudsters informed the defendant solicitors that on completion they would hand over the transfer, the certificate of discharge of the existing mortgage, the charge certificate and the vendor's part of the contract. They also indicated that they wished to complete by post using the current Law Society Code for Completion by Post. This requires the purchaser's solicitor to send the amount necessary to complete (as shown in the vendor's completion statement) to the vendor's solicitor to be held to the order of the purchaser's solicitor pending completion. The vendor's solicitors must give an undertaking that they have the seller's authority to receive the purchase money on completion and that on completion they will have the authority of the proprietor of each existing charge to receive the sum required to repay the secured loan. On completion the vendor's solicitor is required to redeem any existing charges on the property and then to confirm to the purchaser's solicitors that completion has taken place. When the defendant's solicitors paid the mortgage advance to the account nominated by the vendor's purported solicitors they received none of the documents referred to above in return and the lender had of course no charge or other security over the property. It therefore sued the solicitors for breach of trust in paying away the mortgage advance without authority. Its case was that under the terms of the solicitor's instructions the money was held by them on trust until completion and that completion had never taken place. The Court of Appeal affirmed the decision of the judge that there had been a breach of trust. The lenders had contended that completion (within the meaning of s.10.3.1 of the CML Handbook) did not take place until the transfer of the property and the charge were subsequently registered at HM Land Registry. This submission was rejected both by the judge and by the Court of Appeal. Rimer LJ said this: "39. The judge rejected that submission for reasons he expressed in two sentences in [19] of his judgment. I agree with him, although I shall deal with the point more extensively. 'Completion' in a typical domestic sale and purchase transaction of a property with a registered title conventionally refers to the ceremony, or the agreed postal equivalent, at which the vendor and purchaser (or their respective agents) perform the prior contract. Putting it generally, the purchaser pays money to the vendor, which the vendor applies in redeeming the prior charges and satisfying the unpaid balance of the purchase money. The vendor, in exchange, gives vacant possession of the property to the purchaser and delivers to him the transfer and certificates of discharge of the prior charges. It is this exchange of money and documents that is normally referred to as completion. When, as is usual, the contract incorporates formal conditions of sale, they will specify the 'completion date' when these events must be performed (see, for example, in the current (fifth) edition of the Standard Conditions of Sale, conditions 1.1.1(c) and 6.1.1). 40. Completion as described is not, however, the end of the story for the purchaser and any chargee. They also need to be registered at HM Land Registry as proprietors of the property and charge respectively since only then will the transfer and charge 'operate at law'. The documents provided to the purchaser on completion and (when subsequently obtained) the SDLT certificate issued by HMRC, will enable the purchaser to apply to HM Land Registry for the registration of the transfer showing him as the proprietor of the property, an application which he will or should make within the priority period of the official search of the title of the property that he should have made just before completion. If he has bought the property with the assistance of a mortgage loan, he will by the time of completion also have executed a legal charge in favour of the lender; and its provision to HM Land Registry will also enable the charge to be registered showing the chargee as its proprietor. 41. There is, therefore, in practice a time gap between completion and the subsequent registration of transfer and charge. Miss Sandells' submission is, however, that it is wrong to regard what I have described as completion as being the sense of 'completion' in clause 10.3.4 of the Handbook. She submitted that completion in the sense there used occurs only upon the subsequent registration of transfer and charge. 42. There is, first, a practical difficulty with that argument. Let it be assumed that the sale and purchase contract in this case had been a genuine one, with genuine solicitors acting for genuine vendors, and that the contract had provided for completion to be on 4 September. There is no doubt what that would have meant, namely what I have described as completion. On Miss Sandells' submission, however, M&U would not on such completion have been entitled to have released a penny piece of the loan money to the vendors' solicitors: they could only release it upon Mr Davies and C&G being respectively registered as proprietor and chargee. Unless, however, the parties agreed some fundamental re-structuring of the contract in order to accommodate C&G in this respect, such registrations would not have happened. Instead, if the purchaser was unable to pay the balance of the purchase price on completion, he would probably find himself faced with a forfeiture of his deposit and a claim for breach of contract. 43. Despite its obvious practical complications, Miss Sandells' point is not, however, completely novel. Whilst its possible origins were not discussed in argument, a like point was the subject of discussion in the middle of the last century in The Contract of Sale of Land as Affected by the Legislation of 1925, 1930, T. Cyprian Williams. The author there engaged, in footnote (s) on page 80, in a discussion as to whether under an open contract for the sale and purchase of registered land, the vendor is entitled to insist on payment of the purchase price at any time before the registration of the purchaser as proprietor. The discussion is interesting but not, I consider, of present relevance. The purported contract in this case was not an open contract (that is, an agreement merely as to parties, property and price). It purported to incorporate the National Conditions of Sale. Contracts that incorporate such standard conditions thereby spell out expressly that the obligation to pay the balance of the purchase money is one that falls to be complied with on completion in the conventional sense (see, for example, condition 6.7 of the current Standard Conditions of Sale). A purchaser signing up to such a contract cannot decline to pay the balance until he is registered as proprietor; and a vendor is entitled to complain if he does. 44. C&G was not of course a party to the contract. It retained M&U on the basis of the instructions in the Handbook. The relevant question is, therefore, what that said about the terms of the trust that C&G thereby imposed upon M&U in respect of the loan money. Clause 10.3.4 told M&U that 'You must hold the loan on trust for us until completion'. So what did 'completion' as there used mean? 45. The Handbook comprises 17 headed sections. The provisions of various of them prior to section 14 refer to 'completion', clause 10.3.4 being one example (see [15] above). It is in my view clear beyond reasonable argument that they are using that word in the sense of the conventional meaning of completion. It is possible to argue, as Miss Sandells did, that they might be read as if they were using the word 'completion' synonymously with 'registration', although I found the argument unconvincing. The argument is, however, given its quietus by section 14, headed 'After completion' (my emphasis), of which clause 14.1 imposes upon M&U the obligation to register the mortgage as a first legal charge at HM Land Registry (and see also clause 14.1.4). Section 14 plainly proceeds on the basis that the prior references to completion are to completion in the conventional sense, not to the subsequent registration of title. In addition, as the judge pointed out, paragraphs (2)(c)(i) and (iii) of M&U's certificate of title (in C&G's prescribed form and so in the form of the certificate referred to in section 10 of the Handbook) draw a distinction between (a) completing the mortgage in the conventional sense and (b) the subsequent delivery to the Land Registry of the documents necessary to register it. A like distinction between completion and registration was made in the first and third bullet points of C&G's instructions to M&U (see [13] above). 46. In my view, therefore, the judge was right to hold that 'completion' in clause 10.3.4 did not refer to the successive moments when the transfer and charge were respectively registered. It referred to the prior date when conventional completion occurred. M&U were authorised by C&G to release the loan money to enable such completion to take place. The trust was only destined to subsist until such time as it did." That left the question of whether completion in the sense referred to in s.10.3.4 of the CML Handbook took place when the solicitors released the mortgage advance to the fraudsters. In that case the answer to the question was obvious. The property was never the subject of a genuine contract for sale and the fraudsters were never in the position to make title to it, nor had any intention of doing so. Such undertakings as were given were not solicitors' undertakings and were worthless. Rimer LJ expressed the view that even if forged documents of title had been provided to the defendants this would not have amounted to completion:- "The purported contract was a nullity, since the Greens had not agreed to sell their property to Mr Davies, nor had they authorised anyone to sell it to him in their name; and the purported completion of that nullity by way of the exchange of purchase money for forged documents could not in my view have amounted to completion. Nothing, said Lear, will come of nothing, and so it was here. Completion in the present context must mean the completion of a genuine contract by way of an exchange of real money in payment of the balance of the purchase price for real documents that will give the purchaser the means of registering the transfer of title to the property that he has agreed to buy and to charge. An exchange of real money for worthless forgeries in purported performance of a purported contract that was a nullity is not completion at all. Had that happened in this case, the parting with the loan money would have been a breach of trust." But he also affirmed the decision of the judge, who had held that release of the mortgage advance was unauthorised simply because the monies had been paid out without the solicitors receiving either the documents of title they had been promised or a solicitor's undertaking to provide them. There would therefore have been a breach of trust in that case even if the transaction had been a genuine one. Davisons Solicitors v Nationwide Building Society [2012] EWCA Civ 1626 was also a case of fraud. A Mr Patel applied to the claimant building society for a mortgage loan to enable him to purchase a property in Sutton Coldfield for a price of £249,995. He told the society that he would provide the deposit from his own resources. The society approved a loan of £187,000. They and Mr Patel both instructed Davisons to act for them. Instructions from Nationwide were again on the terms of the CML Handbook. Davisons then received a letter from what appeared to be a firm of solicitors called Rothschild at an address in Small Heath, Birmingham. There is a firm called Rothschild but they did not have a branch at this address and the sender of the letter was again a fraudster. The letter stated that they were holding a deposit of £62,995 from Mr Patel and enclosed a draft contract. Eventually, after conducting the necessary searches, Davisons provided Nationwide with a certificate of title incorporating (as in this case) the terms of the Appendix to Rule 6(3) of the Solicitors' Practice Rules 1990. Rothschild Small Heath then informed Davisons that they were providing a Form TR1 transfer deed signed by the vendor and requisitions on title and confirmed that the only charge registered against the property was one in favour of GE Money Home Lending Limited, which would be discharged on completion. Rothschild Small Heath opted to complete by post in accordance with the Law Society's Code and Davisons transferred the mortgage advance to them to be held to Davisons' order pending completion. As in Markandan Davisons asked for the transfer, charge certificate and the deed of discharge in respect of the GE Money mortgage but nothing further was heard from Rothschild Small Heath. Mr Patel executed the mortgage in favour of Nationwide and was subsequently registered as proprietor of the property, but no steps were taken by Rothschild Small Heath to redeem the GE Money mortgage and the vendors apparently remain in occupation paying the mortgage instalments as they fall due. In proceedings against Davisons for breach of trust Nationwide sought equitable compensation for the loss of their mortgage advance on the basis that the monies were released without their authority and prior to completion of the purchase and the grant of the charge. The judge (Ms Catherine Newman QC) held that they had acted in breach of trust because they had released the mortgage advance without the benefit of a solicitor's undertaking in the Law Society's recommended form to the effect that they would use the mortgage advance to redeem the prior charge and would provide a certificate of discharge to that effect. She held that on the true construction of the CML Handbook a lender's solicitor was authorised to release the advance only against such an undertaking. She also refused to grant leave under s.61 of the Trustee Act because the solicitors, by not obtaining that undertaking, had not in her judgment acted reasonably. On appeal counsel for Davisons raised a new argument in relation to the judge's finding that there had been a breach of trust. They contended that on a fair reading the CML Handbook as a whole (and in particular s.3 which deals with the need for the solicitor to follow the Law Society's guidance and regulations on mortgage fraud and money-laundering) the solicitors were authorised to pay the purchase price to Rothschild Small Heath prior to completion, notwithstanding the trust imposed by s.10.3.4 of the CML Handbook. The Court of Appeal rejected this submission on the basis that there is nothing in s.3 which by implication confers any authority on the solicitor to release the funds before completion and the same argument has not been advanced on this appeal. The judgment of Miss Newman QC was therefore affirmed on the issue of whether completion had taken place. Sir Andrew Morritt C said at paragraph 40:- "In my view it is impossible to give the weight to paragraph A3.2 counsel for Davisons seeks to put on it. The trust imposed on the loan moneys in the hands of Davisons by paragraph 10.3.4 of the CML Handbook could only be discharged by completion of the purchase or the return of the money to Nationwide. As shown by Lloyds TSB Bank plc v Markandan & Uddin [2012] 2 All ER 884 no such completion ever took place and the money was not returned." The present case does not involve any kind of fraud but there are other important differences. In a remortgage transaction the borrower does not have to acquire the property in order to provide the lender with security for its loan. The essence of the transaction is the replacement of the existing charge with the new one. The existing chargee is therefore unlikely (as in this case) to be represented by solicitors and can be relied upon to utilise the new mortgage advance for the redemption of the borrower's existing loan. As a consequence the lender's solicitor will not in practice be concerned to deal with another firm of solicitors and his principal concern will be to use the mortgage advance of his client to obtain the redemption of the existing charge and then subsequently to register the new charge in priority to any other encumbrances. It is important to emphasise that the lender's claims for breach of trust in the two authorities I have referred to do not turn on whether these solicitors succeeded in obtaining a first legal charge over the property. Although s.5.8 of the CML Handbook states in mandatory terms that all existing charges must be redeemed on or before completion and AIB in paragraph 22 of the particulars of claim elides the obtaining of a first legal charge with the averment that the Defendant was not authorised to release the advance monies except upon completion, this court in Davisons construed that as going no further than to impose an obligation on the lender's solicitors to exercise reasonable skill and care in seeking to produce that outcome: see Sir Andrew Morritt C at paragraph 57. It is not therefore possible to regard s.5.8 as a condition precedent to the authorised disbursement of a mortgage advance so that any failure to obtain the stipulated security would make the solicitors accountable for the entire advance. The trust argument has to turn simply on whether there has been completion within the meaning of s.10.3 in which event the monies cease to be trust monies in the solicitor's hands. There is no doubt that as of 1st August 2006 MRC had investigated the borrower's title; had in their possession an effective form of charge over the property executed by the borrowers; and had sufficient funds in the form of a mortgage advance to be able to redeem the entirety of the Barclays' loan then outstanding and secured on the property. What they did not have was a redemption statement from Barclays or any unconditional commitment by Barclays (or any undertaking from their solicitors instructed on their behalf) to use the new mortgage advance to discharge the existing indebtedness and release their own charge. The Law Society's Conveyancing Handbook (13th Ed) contains no specific guidance on remortgages but does deal with the discharge of a seller's mortgage on the completion of the purchase. Paragraphs 4.2.13 and 4.2.14 state:- "4.2.13. Arrangements for the discharge of the seller's mortgage(s) over the property will have been agreed between the parties at the requisitions on title stage of the transaction. Where the mortgage is a first mortgage of the property in favour of a building society lender, the parties will frequently have agreed to permit the seller to discharge his mortgage after completion takes place by using part of the proceeds of sale to make payment to the lender. In such a case it will have been agreed that the seller's lender's solicitor should hand to the buyer's solicitor on completion an undertaking in the form of wording recommended by the Law Society to discharge the mortgage (F4.2.15) and to forward the receipted deed or Form DS1 to the buyer's solicitor as soon as this is received from the lender. 4.2.14. An undertaking to discharge the seller's mortgage should only be accepted from a solicitor or licensed conveyancer because of the difficulties of enforcement of undertakings against unqualified persons. The undertaking should also be in the form of wording approved by the Law Society. The current guidance from the Law Society is that it will not normally be advisable to accept an undertaking if the mortgagee is not a member of the CML, and/or where the amount required to redeem the mortgage exceeds the minimum level of solicitors' indemnity insurance (£1 million per claim). In such a case an undertaking should not be accepted and it may be necessary for completion to take place at the lender's solicitors' offices (not the seller's solicitors' offices) or for the lender's solicitor to attend personally at completion in order to discharge the mortgage. If the amount of the mortgage exceeds £2 million consider asking for a warranty from the seller's solicitor that his insurance cover does exceed the amount required to redeem the mortgage. See the Law Society's guidance at Appendix V.15." These are the procedures which were confirmed in Markandan and Davisons as an essential part of the process of completion and they seem to me to have equal application in the case of a remortgage. MRC were not therefore authorised, in my view, to release the monies until they had such documents in their hands. I can see no material difference between the need for the lender's solicitor on a remortgage to ensure that the advance will be used to discharge the existing mortgage and the requirement (accepted in Markandan) that the solicitors should have been in receipt of the relevant documents of title, including a certificate of discharge of the existing mortgage or a solicitor's undertaking to produce such documents once the existing mortgage was redeemed. Where the existing lender has instructed a solicitor to act on its behalf in the remortgage transaction, the obtaining of a redemption statement from the bank, coupled with an undertaking from that solicitor that the advance will be applied by the bank in redemption of its charge, guarantees that the bank will use the monies for that purpose. Alternatively, where the existing lender has not instructed a solicitor to act on its own behalf, the obtaining of a redemption statement from the bank, coupled with unconditional confirmation from the bank that that the advance will be applied by it in redemption of its charge, likewise guarantees that the bank will use the monies for that purpose. Without one or other, the new lender has no assurance that the monies will not be used to discharge other unsecured liabilities of the borrower. It also seems to me to be artificial to regard completion as having already occurred before the lender's solicitor takes any steps to utilise the mortgage advance in the redemption of the existing charge. This is contemplated in s.5.8 of the CML Handbook as occurring either before or on completion, which suggests that the reference to completion in s.10.3 should be construed as including the process of redemption or at least the release of the money to the prior chargee for that purpose. Mr Cousins QC for AIB now accepts that in order for redemption to take place and thereafter for the new lender to obtain a first legal charge the mortgage advance must be released to the existing lender, just as in the case of an ordinary purchase on mortgage it must be released to the vendor's solicitor to be applied in the discharge of the existing mortgage and in the payment of the purchase price. But as in those cases the solicitor's authority to complete and so discharge the trust is, he submits, dependent upon his obtaining an undertaking from the existing lender or its solicitor to use the money to discharge the existing mortgage and to forward in due course the relevant certificate of discharge so as to enable the new charge to be registered. He supports these submissions with a reference to another earlier decision of this court in Knight and Keay v Haynes Duffell Kentish and Co [2003] EWCA Civ 223 where a firm of solicitors paid away their client's money without obtaining in return the assignment of a trade name. But the terms and content of their retainer were very different and I do not regard that decision as of much assistance in construing the meaning and effect of the CML Handbook. The construction of s.10.3 by this court in Markandan and Davisons supports, I think, the lender's contention that the release of the mortgage advance was an essential part of completion and that MRC's authority to disburse the monies depended upon their possession of the undertakings I have referred to. Without these undertakings they would not and did not complete. It must follow from this that the judge was wrong to treat the breach of trust as limited to that part of the mortgage advance which was paid to the Sondhis instead of being used to discharge their liability to Barclays on the second account. He construed the CML Handbook as giving MRC authority to pay to Barclays what was required to procure a release of their charge and to pay the balance to the borrowers. He therefore treated the payment of the £273,777.42 to the borrowers instead of to Barclays as unauthorised and a breach of trust. In response to Mr Cousins' submission that MRC had no authority to release the mortgage advance except on completion and that this required them to be in receipt of an undertaking from Barclays or its solicitor to release the charge he said:- "33. I do not agree that the authority should be construed so as to impose an absolute requirement that nothing could be paid to Barclays before a valid undertaking had been given. There is no such express term either in the letter of instruction or the CML handbook terms incorporated by that letter. The most nearly relevant provision is in para 10.3 of the handbook, which provides as follows: "You are only authorised to release the loan when you hold sufficient funds to complete the purchase of the property and pay all stamp duty land tax and registration fees to perfect the security as a first legal mortgage or, if you do not have them, you accept responsibility to pay them yourself." This wording is obviously not directly applicable to a remortgage, and is not without ambiguity of language, but it emphasises that the solicitors must hold sufficient funds to procure the first ranking mortgage title sought before the loan is released, and provides for the consequences if the funds held are insufficient, i.e. that the solicitors will be responsible to make payment themselves." But this, I think, fails to give proper effect to the terms of s.10.3 of the CML Handbook on which AIB's case is based. As this court has accepted in both Markandan and Davisons the effect of s.10.3 is that the solicitors have no authority to disburse the money (other than at the express direction of the lender) except upon completion of the relevant transaction. For the reasons which I have given, I accept Mr Cousins' submission that the completion of the remortgage transaction required MRC to be in receipt of a solicitors' undertaking, or unconditional confirmation from Barclays that the advance monies would be applied by it in redemption of its charge, before releasing the advance. Had there been proper completion in this case a subsequent failure by the solicitors to pay sufficient monies to Barclays to discharge the existing mortgage would not have been a breach of trust even though it would have been a breach of their retainer. If, on the other hand, completion does not take place then the solicitors have parted with trust monies without authority regardless of the purpose for which they have been used. The difficulty about the judge's reasoning is that his finding that only the £273,777.42 was paid in breach of trust must be based on the premise that there had been completion in respect of the transaction generally. If so, it must, I think, follow that the trust imposed by s.10.3 was at an end and a finding of breach of trust even in respect of part of the advance is inconsistent with that. Causation and Remedy AIB's claim for equitable compensation equivalent to the entire amount of the advance (less recoveries) is based on the premise that as at the date of breach they were entitled to have the fund reconstituted. This is the same argument as was advanced by the lender in Target v Redferns but was rejected by the House of Lords by reference to events subsequent to the breach of trust: in that case the grant of the charge over the intended security. As mentioned earlier in this judgment, the judge found that but for the breach of trust the transaction would have gone through. He said:- "41. In the circumstances, I do not intend to venture into the arguments that were addressed to me as to whether, if the defendant committed a breach of trust in paying out any part of the advance at all, the correct remedy would be based on reconstitution of the trust by repayment of the entire advance, subject only to a credit for actual recovery on sale of the property, save to deal with one matter which would require a finding of fact in the event that I am wrong in my conclusions above. That is the question as to what would have happened but for the breach of trust. Since the breach alleged is the payment out without authority, it seems to me the question may be approached in principle on one of two bases, namely what would the outcome have been if the solicitors had either: (i) in fact dealt with the funds held in the manner they were authorised to do, or (ii) instead of making the unauthorised payment that they did, had asked the bank for its instructions at that point, disclosing the reasons why the payment was outside their existing authority. 42. In either case, it seems to me, the answer is the same on the facts of this case. There would have been a short delay while the solicitors obtained a redemption figure in a form that bound Barclays to release its charge, they would have paid that amount to Barclays and in due course have received that release and registered AIB's charge as a first charge. I am in no doubt that, in the somewhat implausible scenario that the solicitors, realising that they did not have a valid redemption quotation, approached AIB for instructions rather than simply dealing with the matter themselves, AIB would not have withdrawn from the transaction but simply instructed them to carry on with it, complying with their existing instructions. It was clear from the evidence that AIB as a whole was anxious to lend to the borrowers, and that the domestic remortgage was being driven by the need to facilitate the business lending which the bank was very keen to make. There would have been no reason for it to suppose that the failure to obtain a full redemption figure could not be corrected, or to use that failure as an excuse to withdraw from the mortgage lending." Had the remortgage been properly completed and the Barclays' charge redeemed, AIB would still have been exposed to the losses caused by the borrower's default but would have had security for an additional £300,000 odd of its loan. This case is therefore fundamentally different from the position in Markandan and Davisons where had the solicitors not released the monies in advance of completion there could have been no transaction and no loss would have been suffered at all. In a case such as the present one, Target establishes that equitable principles of compensation, although not employing precisely the same rules of causation and remoteness as the common law, do have the capacity to recognise what loss the beneficiary has actually suffered from the breach of trust and to base the compensation recoverable on a proper causal connection between the breach and the eventual loss. The principles were described by Lord Browne-Wilkinson (at page 434 C-F and 437 C-E) as follows:- "The equitable rules of compensation for breach of trust have been largely developed in relation to such traditional trusts, where the only way in which all the beneficiaries' rights can been protected is to restore to the trust fund what ought to be there. In such a case the basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. Courts of Equity did not award damages but, acting in personam, ordered the defaulting trustee to restore the trust estate: see Nocton v Lord Ashburton [1914] AC 832, 952, 958, per Viscount Haldane LC. If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed: Caffrey v Darby (1801) 6 Ves 488; Clough v Bond (1838) 3 M & C 490. Even if the immediate cause of the loss is the dishonesty or failure of a third party, the trustee is liable to make good that loss to the trust estate if, but for the breach, such loss would not have occurred: see Underhill and Hayton, Law of Trusts & Trustees 14th ed. (1987), pp 734-736; in re Dawson, decd; Union Fidelity trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NEW 211; Bartlett v Barclays Bank Trust Co Ltd (Nosy 1 and 2) [1980] Ch 515. Thus the common law rules of remoteness of damage and causation do not apply. However there does have to be some causal connection between the breach of trust and the loss to the trust estate for which compensation is recoverable, viz. the fact that the loss would not have occurred but for the breach: see also In re Miller's Deed Trusts (1978) 75 LAG 454; Nestle v National Westminster Bank Plc [1993] 1 WLR 1260. . . . A trustee who wrongly pays away trust money, like a trustee who makes an unauthorised investment, commits a breach of trust and comes under an immediate duty to remedy such breach. If immediate proceedings are brought, the court will make an immediate order requiring restoration to the trust fund of the assets wrongly distributed or, in the case of an unauthorised investment, will order the sale of the unauthorised investment and the payment of compensation for any loss suffered. But the fact that there is an accrued cause of action as soon as the breach is committed does not in my judgment mean that the quantum of the compensation payable is ultimately fixed as at the date when the breach occurred. The quantum is fixed at the date of judgment at which date, according to the circumstances then pertaining, the compensation is assessed at the figure then necessary to put the trust estate or the beneficiary back into the position it would have been in had there been no breach. I can see no justification for "stopping the clock" immediately in some cases but not in others: to do so may, as in this case, lead to compensating the trust estate or the beneficiary for a loss which, on the facts known at trial, it has never suffered." Later in his speech Lord Browne-Wilkinson referred to the decision of the Supreme Court of Canada in Canson Enterprises Limited v Boughton and Co (1991) 85 DLR (4th) 129: "The majority considered that damages for breach of fiduciary duty fell to be measured by analogy with common law rules of remoteness, whereas the minority considered that the equitable principles of compensation applied. Your Lordships are not required to choose between those two views. But the judgment of McLachlin J (expressing the minority view) contains an illuminating exposition of the rules applicable to equitable compensation for breach of trust. Although the whole judgment deserves study, I extract the following statements. At p 160: "While foreseeability of loss does not enter into the calculation of compensation for breach of fiduciary duty, liability is not unlimited. Just as restitution in specie is limited to the property under the trustee's control, so equitable compensation must be limited to loss flowing from the trustee's acts in relation to the interest he undertook to protect. Thus, Davidson states ['The Equitable Remedy of Compensation' (1982) 3 Melbourne UK Rev 349] 'It is imperative to ascertain the loss resulting from breach of the relevant equitable duty' (at p 354, emphasis added). At p 162: "A related question which must be addressed is the time of assessment of the loss. In this area tort and contract law are of little help . . . The basis of compensation at equity, by contrast, is the restoration of the actual value of the thing lost through the breach. The foreseeable value of the items is not in issue. As a result, the losses are to be assessed as at the time of trial, using the full benefit of hindsight." (Emphasis added.) At p 163: "In summary, compensation is an equitable monetary remedy which is available when the equitable remedies of restitution and account are not appropriate. By analogy with restitution, it attempts to restore to the plaintiff what has been lost as a result of the breach, i.e. the plaintiff's loss of opportunity. The plaintiff's actual loss as a consequence of the breach is to be assessed with the full benefit of hindsight. Foreseeability is not a concern in assessing compensation but it is essential that the losses made good are only those which, on a common sense view of causation, were caused by the breach." (Emphasis added.) In my view this is good law. Equitable compensation for breach of trust is designed to achieve exactly what the word compensation suggests: to make good a loss in fact suffered by the beneficiaries and which, using hindsight and common sense, can be seen to have been caused by the breach." If one asks as at the date of trial and with the benefit of hindsight what loss AIB has suffered then the answer is that it has enjoyed less security for its loan than would have been the case had there been no breach of trust. If MRC had obtained from Barclays a proper redemption statement, coupled with an undertaking to apply the sum specified in the statement in satisfaction of the existing mortgage, then the transaction would have proceeded to complete and AIB could have obtained a first legal mortgage over the Sondhis' property. But although that did not happen AIB did obtain a valid mortgage from the Sondhis which they were eventually able to register as a second charge and use to recover part of their loan from the proceeds of the security in priority to the Sondhis' other creditors. Even had there been no such mortgage they would have been subrogated to Barclays' first charge insofar as they discharged part of the Sondhis' indebtedness by the payment of the £1.2m. In my view all of these are matters to be taken into account in considering what loss has ultimately been caused by the solicitors' breach of trust. In the light of the judge's findings it is not open to AIB to contend that but for the breach of trust it simply would have asked for its money back. This is not a case as in Markandan where the lender was a victim of a fraud and received nothing in return for its advance. Mr Cousins submitted that the breach was never made good in this case because AIB never obtained a first charge over the intended security. But in my view that is irrelevant to the question of what loss AIB has suffered as a result of the breach. The breach of trust comprised the unauthorised release pre-completion of the mortgage advance: not the failure by MRC to obtain a first charge. And in calculating what loss has resulted from the breach the commonsense approach advocated by Lord Browne-Wilkinson in Target requires the court to take account of the beneficial effect of what security AIB was eventually able to obtain. For these reasons I would affirm the judge's order of 8th March 2012 which calculated equitable compensation in the sum of £323,501.38, including interest, but answer the first preliminary issue to the effect that MRC were in breach of trust as alleged in paragraph 22 of the particulars of claim by releasing the Advance Monies in August 2006. Section 61 of the Trustee Act 1925 Although relied upon in its defence the judge expressed no views as to whether MRC should be relieved of liability for breach of trust under s.61 of the Trustee Act and I have some reluctance to express my own view on this matter without the benefit of any findings of fact by the judge on this issue. But in the event nothing turns on this because MRC do not seek s.61 relief in respect of their failure to pay the additional £273,777.42 in order to redeem the Barclays' mortgage. They accept that their conduct in that respect was both negligent and unreasonable. Since the result of this appeal is that their liability is limited to that sum, together with the calculation of interest made by the judge, it is unnecessary for us to express any view on whether they acted reasonably and ought to be excused from personal liability for releasing the mortgage advance prior to completion. I would therefore allow AIB's appeal against the judge's order of 25th January 2012 but dismiss their appeal against his order of 8th March 2012. The Defendant's appeal will also be dismissed. Lord Justice Sullivan : I agree. Lady Justice Arden : I also agree.

THIRD SECTION CASE OF GABRIELYAN v. ARMENIA (Application no. 8088/05) JUDGMENT STRASBOURG 10 April 2012 FINAL 10/07/2012 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Gabrielyan v. Armenia, The European Court of Human Rights (Third Section), sitting as a Chamber composed of: Josep Casadevall, President,Corneliu Bîrsan,Alvina Gyulumyan,Egbert Myjer,Ineta Ziemele,Luis López Guerra,Kristina Pardalos, judges,and Santiago Quesada, Section Registrar, Having deliberated in private on 20 March 2012, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 8088/05) against the Republic of Armenia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by an Armenian national, Mr Artak Gabrielyan (“the applicant”), on 3 February 2005. 2. The applicant was represented by Mr M. Muller, Mr T. Otty, Mr K. Yildiz and Ms L. Claridge, lawyers of the Kurdish Human Rights Project (KHRP) based in London, and Mr T. Ter-Yesayan and Mr E. Babayan, lawyers practising in Yerevan. The Armenian Government (“the Government”) were represented by their Agent, Mr G. Kostanyan, Representative of the Republic of Armenia at the European Court of Human Rights. 3. On 10 September 2008 the President of the Third Section decided to give notice of the application to the Government. It was also decided to rule on the admissibility and merits of the application at the same time (Article 29 § 1). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 4. The applicant was born in 1938 and lives in Yerevan. 1. Background to the case 5. In February and March 2003 a presidential election was held in Armenia, during which the applicant was involved as an authorised election assistant (վստահված անձ) for the candidate representing the People’s Party of Armenia (PPA), who was the main opposition candidate in the election. Following his defeat by the incumbent President, the PPA candidate challenged the election results in the Constitutional Court, which on 16 April 2003 recommended that a referendum of confidence in the re-elected President be held in Armenia within a year. 6. As the April 2004 one-year deadline approached, the opposition stepped up its campaign to challenge the legitimacy of the re-elected President. At the end of March 2004 two main opposition groups – the Justice Alliance, consisting of nine parties, including the PPA and the National Unity Party – announced their intention to start a series of demonstrations demanding the resignation of the re-elected President. 7. The applicant alleges that from February 2003 until his arrest in April 2004 he was repeatedly harassed because of his political activity. In particular, the police frequently called him to the police station without any reasons and demanded that he stop his political activities and support for the opposition. 8. On 30 March 2004 criminal proceedings no. 62201704 were instituted under Article 301 and 318 § 2 of the Criminal Code (CC) against representatives of the Justice Alliance on account of making calls for a violent overthrow of the government and change of the Armenian constitutional order and of publicly insulting government representatives. 2. The applicant’s arrest and prosecution 9. On 8 April 2004 the applicant was handing out leaflets to people at a marketplace in Yerevan, inciting them to attend a demonstration to be held in the capital on 9 April 2004. The leaflets had the following content: “Fellow countrymen It is not possible any more to continue this way. On 9 April at 4 p.m. in Freedom Square we will start our struggle which aims to establish a lawful government in Armenia. The future of our homeland depends on the participation of each of us. National Unity PartyJustice Alliance” 10. The applicant was stopped by two police officers, G.D. and G.A., who demanded that he accompany them to a police station. It appears that this happened at around 1 p.m. 11. According to the applicant, they arrived at the police station at around 1.30 p.m. At the police station he was placed in a waiting room with a glass wall next to the corridor, where he spent about ten hours. During this period he noticed several people behind the glass wall pointing at him as if to identify him. He had no access to a lawyer during this period. 12. It appears that at some point the applicant was transferred to a prosecutor’s office where from 8.55 to 9.05 p.m. and from 9.30 to 10.05 p.m. two confrontations were held between him and two witnesses, M.M. and N.S., respectively, who worked at the marketplace. The relevant records stated at the outset that there had been substantial contradictions between the statements of these witnesses and the applicant, who at this stage was also involved as a witness. 13. Witness M.M. stated during the confrontation that earlier that day, at around 2 p.m., he had noticed the applicant handing out leaflets and saying something to people at the marketplace. Then the applicant had approached him and given him a leaflet, saying that “the day after it would be the end of the government and the government would be changed and that they would put an end to the government and sort them out”. 14. Witness N.S. stated that the applicant had approached him at around 1 p.m. and given him a leaflet, saying that he should “come to the demonstration where they would crush and overcome”, after which the applicant left. 15. The applicant denied having handed out any leaflets or made any such statements. 16. At 10.30 p.m. an arrest record was drawn up which noted that eye-witnesses had stated that the applicant had handed out leaflets and made calls for a violent overthrow of the government. The applicant again denied these allegations. 17. On the same date the Kentron and Nork-Marash District Court of Yerevan granted the investigator’s motion to have the applicant’s flat searched. This decision stated that there were sufficient grounds to believe that written calls, leaflets, plans and projects to overthrow the government and change the constitutional order violently and to insult representatives of the government publicly, as well as firearms, ammunition and other objects and documents relevant to the case, could be found in the applicant’s flat. 18. On 9 April 2004 the investigator invited a legal aid lawyer, H.I., to represent the applicant’s interests. According to the relevant record, the applicant agreed that his interests be represented by lawyer H.I. 19. On the same date from 10.30 to 11.10 a.m. the applicant’s flat was searched in the presence of two attesting witnesses but no items were found. 20. From 1.05 to 2.25 p.m. the applicant was questioned as a suspect in the presence of lawyer H.I. The applicant again denied all the allegations. 21. On 10 April 2004 the applicant was formally charged within the scope of criminal proceedings no. 62201704 under Article 301 of the CC. This decision stated: “...[the applicant], having received from [the district office] of the National Unity Party leaflets concerning the demonstration to be held on 9 April 2004 at 4 p.m. on Freedom Square with the aim of “establishing a lawful government in Armenia”, distributed these leaflets to citizens and made calls to overthrow the government and change the constitutional order violently. On 8 April 2004 at around 1 p.m. [the applicant] was caught by police officers while he was handing out the leaflets and a total of 24 leaflets were confiscated from him. Thus, [the applicant] has made calls to overthrow the government and change the constitutional order violently, namely he has committed an offence envisaged under Article 301 of the [CC].” 22. The applicant and his lawyer signed this decision which, inter alia, stated that the nature of the charge had been explained to the applicant. The applicant once again gave his consent to be represented by lawyer H.I. He was then questioned as an accused in the presence of his lawyer. The applicant submitted that the nature of the charge was clear to him but denied having distributed leaflets or made any calls at the marketplace. 23. On the same date the Kentron and Nork-Marash District Court of Yerevan granted the investigator’s motion, dated 6 April 2004, to have the applicant detained. 24. On 21 April 2004 a confrontation was held between the applicant and another witness, V.Z., who apparently also worked at the marketplace. He identified the applicant as the person who had approached him on 8 April 2004, handed him a leaflet and told him to attend a demonstration on the following day during which a struggle to change the government would begin and that the authorities were unlawful and had to be changed. The applicant again denied having distributed leaflets or made any calls and submitted that witness V.Z. had been forced by the police to make false submissions. This confrontation was held in the presence of lawyer H.I. 25. On 6 May 2004 another confrontation was held between the applicant and arresting police officer G.D. who submitted that on 8 April 2004 at around 12 noon, having noticed that the applicant was distributing leaflets at the marketplace, they had approached him and asked to have a look at the leaflets. Having read what the leaflets said, they asked the applicant to come with them to the police station for clarification. The applicant denied these allegations. This confrontation was held in the presence of lawyer H.I. 26. On 7 May 2004 another confrontation was held between the applicant and the second arresting police officer, G.A., who made submissions similar to those made by police officer G.D. The applicant submitted in reply that police officer G.A.’s statement was true and that he had not told the entire truth in his previous submissions. The applicant admitted that he had distributed the leaflets at the marketplace but denied having said anything or made any calls for a violent overthrow of the government. He submitted that he regretted his actions and requested to be released from detention. This confrontation was held in the presence of lawyer H.I. 27. On the same day the applicant was again questioned as an accused in the presence of lawyer H.I., during which he made similar submissions and pleaded partly guilty. 28. Later that day lawyer H.I. filed a motion with the General Prosecutor’s Office, seeking to have the applicant released from detention. He submitted that the applicant was known to be of good character, had a permanent place of residence, was a pensioner and would not abscond or obstruct the proceedings if freed. Furthermore, he had no criminal record, had pleaded guilty and regretted his actions. 29. It appears that on unspecified dates two other witnesses, O.V. and S.K., were also questioned in connection with the applicant’s case. Witness O.V. stated that a tall person had been distributing leaflets at the marketplace on 8 April 2004. When handing him a leaflet, he said that a struggle aimed at establishing a lawful government in Armenia would begin at the demonstration of 9 April 2004. He further incited everybody to participate in the struggle, topple the government and make a coup. Witness S.K. stated that a tall elderly person had handed him a leaflet at the marketplace on 8 April 2004 and incited him to join the struggle, eliminate the current government, topple them by force and establish a new order. 30. The applicant alleged, which the Government did not dispute, that throughout the entire investigation his lawyer had never met or spoken with him in private, while in detention, to provide legal advice. Furthermore, the lawyer even failed to satisfy his request to be provided with a copy of the Code of Criminal Procedure. 3. The court proceedings 31. On an unspecified date the applicant’s case was brought before the Avan and Nor Nork District Court of Yerevan which started its examination on 31 May 2004. The applicant submitted before the District Court that he wished to be represented by lawyer H.I. 32. The examining judge noted at the outset that the witnesses had been duly notified but had failed to appear and inquired about the opinion of the parties. The prosecutor submitted that they had to be compelled to appear. The lawyer made a similar submission on the ground that it was impossible to examine the case without the witnesses. The judge agreed and adjourned the hearing until 2 June 2004. 33. At the hearing of 2 June 2004 four witnesses appeared, witnesses N.S. and M.M. and police officers G.D. and G.A.. 34. Witness N.S. admitted that he was seeing the applicant for the second time, the first time being on 8 April 2004 at the prosecutor’s office. He further submitted that about a month before he was at work at the marketplace when somebody had approached and given him a leaflet, adding that “tomorrow at 1 p.m. there would be a demonstration on Freedom Square”. The person handing out the leaflets was tall and had grey hair. He gave the leaflet and said “come at this hour, we will crush, shatter and conquer”. Witness N.S. submitted that he had understood from these statements that the demonstrators wanted to change the government. In reply to the applicant’s lawyer’s questions, witness N.S. submitted that he was not familiar with that person and he could not say for sure if it was the applicant who had given the leaflet and made the statements. He was sure though that he had seen the applicant at the prosecutor’s office. Witness N.S. explained that he had stated at the prosecutor’s office that he had not seen who was distributing the leaflets, to which they replied that it had been the applicant. In reply to the judge’s question as to why he had stated unequivocally during the investigation that it was the applicant who had distributed the leaflets and made the above statements, witness N.S. submitted that he had said so because he had been told at the prosecutor’s office that it was the applicant who was distributing leaflets in the area of the marketplace. He further submitted that he could not remember who it was, but people around him said that it was the applicant, so he said the same. 35. Witness M.M. submitted that at some point in May he was at the marketplace when the applicant, who was distributing leaflets, approached him and invited him to a demonstration in order to “turn over” the government. The applicant then left. Witness M.M. further confirmed his pre-trial statement and asked to rely on it. He also confirmed that the person distributing the leaflets, like the applicant, had grey hair and a white shirt and was tall. 36. Police officer G.D. submitted that he was on duty at the marketplace with police officer G.A. where they noticed a person who was handing out leaflets. They approached him and brought to the police station, where he was identified as the applicant. They could not hear what he was saying to the vendors. In reply to the applicant’s lawyer’s questions, police officer G.D. said that he personally did not hear any calls from the applicant. Nor did any of the vendors tell him that the applicant had made calls. 37. Police officer G.A. made similar submissions. 38. The examining judge then announced that he had received an official letter from the police stating that witness S.K. had not been found at his place of residence, that witness O.V. was absent from his place of residence and lived elsewhere, and that the court’s decision ordering the appearance of these witnesses, in its part concerning witness V.Z., had not been executed for reasons not communicated to the court. The prosecutor requested that the pre-trial statements of these witnesses be read out. The applicant and his lawyer consented, after which the statements were read out. 39. The applicant was then examined, during which he admitted that he had distributed leaflets but denied having made any calls for a violent overthrow of the government. 40. Thereafter the trial entered its final stage of pleadings. The prosecutor made a speech, followed by the applicant’s lawyer and the applicant himself. The lawyer, in particular, made the following speech: “I find that the defendant must be acquitted”. 41. On the same date the District Court found the applicant guilty as charged and imposed a one year suspended sentence, ordering at the same time the applicant’s release from detention under a written undertaking not to leave his place of residence. The District Court found, in particular, that: “On 8 April 2004 [the applicant] received leaflets from the Avan and Nor Nork district office of National Unity Party concerning a rally to be held on 9 April 2004 at 4 p.m. on Freedom Square, distributed them to persons working and involved in trade in the area of the seventh market situated in [Nork] and made public calls inciting to a violent overthrow of the government and the constitutional order. In particular, when handing out leaflets to [N.S., M.M., V.Z., O.V. and S.K.], he incited them to participate in the rally telling them ‘You must come by all means, we will crush, overcome, put an end to the government and sort them out, we will make a coup, we will violently overthrow the current government and establish a new order’” 42. In support of its findings the District Court relied on the statements of witnesses N.S., M.M., V.Z., O.V. and S.K. As regards, in particular, the statements made by witness N.S. in court, the District Court dismissed them as unreliable and admitted his statements made during the confrontation of 8 April 2004. The District Court justified this decision by the fact that the statements made by witness N.S. during the confrontation had been unequivocal. Thus, according to the entirety of the witness statements relied on by the District Court, the applicant had made the following calls while handing out the leaflets and inciting people to attend the demonstration: “we will crush and overcome” (witness N.S.), “the government will be changed and we will put an end to the government and sort them out” (witness M.M.), “a struggle will start at the demonstration aimed at changing the government and establishing a lawful one”, “the current government will be overthrown and a new one will be established”, “the current government is unlawful and has to be changed” (witness V.Z.), “the government has to be overthrown and a coup has to be made” (witness O.V.) and “the current government has to be eliminated and violently overthrown and a new order has to be established” (witness S.K.). 43. On 14 June 2004 the applicant lodged an appeal, which he apparently drafted himself. In his appeal the applicant submitted that during the investigation he had pleaded guilty only to distributing leaflets, which in any event was not an offence, but he had never made any calls for a violent overthrow of the government. He was not a member of any political party, had never participated in demonstrations or had links with the parties organising them. The applicant further complained about the fact that the statements made by witnesses N.S. and M.M. in court, which were favourable for him, had been considered unreliable, while other witnesses, being ashamed of their false statements, had failed to appear in court. He argued that the statements of those witnesses who had not been examined in court should not have served as a basis for his conviction. The applicant lastly stated that the arresting police officers had not heard him make any calls. Thus, he had been convicted on the basis of statements of two or three witnesses who had seen him for the first time at the prosecutor’s office. 44. On 29 June 2004 the proceedings commenced before the Criminal and Military Court of Appeal. The applicant submitted before the Court of Appeal that he wished to be represented by lawyer H.I. and pleaded not guilty. Lawyer H.I. also claimed that the applicant was not guilty and asked the court to acquit him. 45. At the hearing of 30 June 2004, following the applicant’s examination, the presiding judge announced that it was necessary to summon and examine witnesses O.V., V.Z. and S.K. He further stated that he had telephoned all three witnesses on the previous day. O.V.’s wife replied that about a month before he had gone to Russia for work and his whereabouts were unknown. V.Z.’s wife replied that he had gone to another region for work and that she had no further information about him. S.K.’s relatives replied that he had left Armenia for work. The Court of Appeal decided, taking into account that the attendance of the above witnesses was indispensable, that they be compelled to appear. This task was assigned to the local police department. The hearing was adjourned until 6 July 2004. 46. At the hearing of 6 July 2004 the presiding judge announced that, according to the police, the witnesses were absent from their places of residence. The police had promised to provide further information in writing. In reply to the presiding judge’s question, the parties did not object to proceeding with the hearing and requested that measures be taken to ensure the attendance of the witnesses at the next hearing. 47. At the hearing of 7 July 2004 the presiding judge informed the parties that an official letter had been received from the police informing that witnesses O.V., V.Z. and S.K. were absent from their places of residence. While reading out that letter, the presiding judge noticed that the police had visited the wrong address as far as witness V.Z. was concerned. The prosecutor then requested that their statements be read out. Lawyer H.I. submitted that the witnesses in question had made defamatory statements against the applicant during the investigation which lacked credibility and it was therefore necessary to bring them to court with the help of the police. The applicant joined his lawyer’s request and asked that the witnesses in question appear in court and also present their identity documents. The Court of Appeal decided that, since a wrong address had been indicated in the decision ordering V.Z.’s appearance in court, it was necessary to inform the police of the correct address. As regards witnesses O.V. and S.K., the former was in Russia, while the latter was out of town. This was also confirmed by the telephone calls made by the presiding judge. The Court of Appeal found that, in such circumstances, there were no reasons to doubt the veracity of the police information and announced that it would read out and examine the pre-trial statements of those witnesses. The statements would then be analysed in the deliberation room and an assessment would be made as to their credibility, since the evidence examined in court was sufficient to allow such an assessment. The Court of Appeal then proceeded to read out the statements in question. The applicant submitted that their statements did not concern him since there had been many tall, grey-haired men at the marketplace. The investigating authority had never arranged his identification by those witnesses and their statements were therefore false. 48. At the hearing of 12 July 2004 the presiding judge announced that an official letter had been received from the police, according to which witness V.Z. indeed resided at the correct address but nobody answered the door during their visit. The presiding judge announced that, not being satisfied by the information contained in the police letter, he personally called V.Z.’s home and became convinced that nobody was there because nobody answered the telephone. The prosecutor requested that the statement of witness V.Z. be read out in court, while both the applicant and his lawyer submitted that the statement of witness V.Z. lacked credibility and requested that it be disregarded. The court then proceeded to read out the statement. 49. At the same hearing the applicant filed a motion with the Court of Appeal dispensing with the services of lawyer H.I. He submitted that the lawyer had not taken any steps to defend his interests and to prove his innocence. The lawyer had never come to visit him in detention despite the requests he had made to the administration of the detention facility. Furthermore the lawyer, without his knowledge, had filed a motion on 7 May 2004 seeking his release, in which the lawyer stated that he had pleaded guilty despite the fact that he had never pleaded fully guilty, thereby acting to his detriment and assisting the prosecution in substantiating the charge against him. The applicant claimed that he had found out about this motion only during the appeal proceedings. He further claimed in his motion that he had pleaded guilty to distributing leaflets because he was not aware that such act did not constitute an offence. He realised this only following his release from detention because no copy of the Criminal Code had been provided to him by either the investigator or his lawyer while in detention, despite his numerous requests. The applicant lastly claimed that the case against him had been fabricated. He submitted that, while sitting behind a glass wall at the police station, he was shown to some people who later became witnesses and made false statements against him. Some of them he was not able to examine and only two of them appeared in court. One of those two retracted his pre-trial statement, while the second one, because of giving a false statement, was even ashamed to look him in the eyes and was only able to mumble a confirmation of his pre‑trial statement. 50. The applicant stated at the same time that it was his personal choice to dispense with the services of his lawyer. The Court of Appeal decided to grant the applicant’s motion and to allow him to defend himself in person. The lawyer was then asked to leave the courtroom. 51. On the same date the Criminal and Military Court of Appeal adopted its judgment upholding the applicant’s conviction. In doing so, the Court of Appeal referred to the statements of witnesses N.S., M.M., O.V. and S.K. and of police officers G.D. and G.A. As regards the statement of witness V.Z., the Court of Appeal found that it should not have formed a basis for the applicant’s conviction because that witness had failed to appear in court despite a court order. The Court of Appeal further rejected the applicant’s claim that he had only distributed leaflets but not made any calls for a violent overthrow of the government. In doing so, the Court of Appeal stated that five witnesses had testified that the applicant had made such calls. Furthermore, the police officers had arrested him while he was handing out the leaflets. In the light of the overall sufficiency of evidence, the fact that witnesses O.V. and S.K. had failed to appear in court could not put into doubt the applicant’s involvement in the act and his guilt. The criminal element in his actions lay in the making of calls inciting violent seizure of power and change of the constitutional order. Those calls were public and aimed at a big group of people. Since he made such calls at a marketplace during the daytime, they were audible to the public. The fact that they were perceived as calls inciting to a violent overthrow of the government was confirmed by the witness statements. 52. The Court of Appeal further dismissed the applicant’s complaint about lawyer H.I., stating that the applicant’s right to defence had been ensured by the investigating authority, he had chosen his position regarding the charge against him without any outside pressure and he had not previously made any complaints about the lawyer. Furthermore, the fact that the nature of the charge was clear to the applicant was evident from the records of investigative measures. He had certified this with his signature in the presence of his lawyer. 53. On 14 July 2004 the applicant lodged an appeal on points of law in which he raised arguments concerning the witnesses against him and the alleged failure of lawyer H.I. to provide effective legal assistance, similar to those raised in his complaint of 12 July 2004. He also added that the witness statements against him had been fabricated under police pressure. The witnesses in question were people trying to make a living by working at the market, so if they had refused to follow police orders they would have been immediately expelled from the market. 54. On 6 August 2004 the Court of Cassation dismissed the applicant’s appeal. In doing so, the Court of Cassation found that both witnesses M.M. and N.S. had made statements implicating the applicant. As regards the legal representation, the applicant had agreed that lawyer H.I. defend his interests and the lawyer had properly done so. 55. By a letter of 11 November 2004 the head of staff of the Armenian Bar Association informed the applicant, in reply to his complaint, that lawyer H.I. had lawfully carried out the applicant’s defence and had not done anything illegal. The motion of 7 May 2004 had been filed upon the applicant’s and his relatives’ request. II. RELEVANT DOMESTIC LAW A. The Criminal Code (in force from 1 August 2003) 56. The relevant provisions of the CC provide: Article 301: Public calls inciting to a violent change of the constitutional order of Armenia “Public calls inciting to a violent seizure of State power and violent change of the constitutional order of Armenia shall be punishable by a fine of between 300 and 500 times the minimum wage or by detention of between two and three months or by imprisonment for a period not exceeding three years.” B. The Code of Criminal Procedure (in force from 12 January 1999) 57. The relevant provisions of the Code of Criminal Procedure provide: Article 62: A suspect “1. A suspect is the person ... who has been arrested on suspicion of having committed an offence...” Article 63: Rights and obligations of a suspect “1. The suspect has the right to defence. The investigating authority shall allow the suspect to implement his right to defence by all lawful means. 2. The suspect, in accordance with a procedure prescribed by this Code, has the right ... to have a defence counsel or to dispense with a defence counsel and defend himself in person from the moment when he is presented with the investigating authority’s decision on arrest, the record of arrest or the decision on choosing a preventive measure...” Article 86: A witness “3. A witness is obliged ... to appear upon the summons of the authority dealing with the case in order to give testimonies or to participate in investigative and other procedural measures... 4. The failure of a witness to comply with his obligations shall lead to sanctions prescribed by law.” Article 153: Compulsion to appear “1. [A] witness ... may be compelled to appear by a reasoned decision of ... the court if he fails to appear upon summons without valid reasons. [A] witness ... is obliged to inform the summoning authority if there are valid reasons preventing his appearance within the time-limit fixed in the summons.” Article 216: Confrontation “1. The investigator is entitled to carry out a confrontation of two persons who have been questioned previously and whose statements contain substantial contradictions. The investigator is obliged to carry out a confrontation if there are substantial contradictions between the statements of the accused and some other person. ... 5. In cases envisaged by this Code, a defence counsel, an interpreter and the lawful representative of the person being questioned can participate in the confrontation and shall also sign the record.” Article 332: Deciding on the possibility of examining the case in the absence of a witness, expert or specialist who has failed to appear “1. If any of the witnesses ... summoned to court has failed to appear, the court, having heard the opinions of the parties, shall decide on continuing or adjourning the proceedings. The proceedings may be continued if the failure to appear of any of such persons shall not obstruct the thorough, complete and objective examination of the circumstances of the case.” Article 342: Reading out of witness statements “1. Reading out at the trial of witness statements made during the inquiry, the investigation or a previous court hearing ... is permissible if the witness is absent from the court hearing for reasons which rule out the possibility of his appearance in court, if there is substantial contradiction between those statements and the statements made by that witness in court, and in other cases prescribed by this Code.” Article 426.1: The court reviewing judicial acts on the ground of newly discovered or new circumstances “1. Only final acts are subject to review on the ground of newly discovered or new circumstances. 2. On the ground of newly discovered or new circumstances a judicial act of the court of first instance shall be review by the appeal court, while the judicial acts of the appeal court and the Court of Cassation shall be reviewed by the Court of Cassation.” Article 426.4: Grounds and time-limits for review on the ground of new circumstances “1. Judicial acts may be reviewed on the ground of new circumstances [if] ... a violation of a right guaranteed by an international convention to which Armenia is a party has been found by a final judgment or decision of an international court...” THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION 58. The applicant complained that his State-appointed lawyer had failed to provide effective legal assistance, including by failing ever to meet with him in private. He further complained that he had been unable to cross‑examine witnesses. He relied on Article 6 § 3 (b), (c) and (d) of the Convention. 59. The Court considers that the applicant’s complaints fall to be examined under sub-paragraphs (c) and (d) of Article 6 § 3. It further reiterates that the requirements of Article 6 § 3 are to be seen as particular aspects of the right to a fair trial guaranteed by Article 6 § 1. The Court will therefore examine the relevant complaints under both provisions taken together (see, among other authorities, F.C.B. v. Italy, 28 August 1991, § 29, Series A no. 208‑B, and Poitrimol v. France, 23 November 1993, § 29, Series A no. 277‑A) which, in so far as relevant, provide: “1. In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...” 3. Everyone charged with a criminal offence has the following minimum rights: ... (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require; (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him[.]” A. Admissibility 60. The Court notes that these complaints are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that they are not inadmissible on any other grounds. They must therefore be declared admissible. B. Merits 1. Article 6 § 3 (c) taken together with Article 6 § 1 (a) The parties’ submissions (i) The applicant 61. The applicant submitted that the legal aid lawyer, H.I., had failed to provide effective legal assistance. He never met or spoke with his lawyer in private and never received any legal advice, which resulted in his pleading partially guilty. The lawyer even failed to provide a copy of the Code of Criminal Procedure, despite his request. Furthermore, the lawyer filed a motion with a court, namely that of 7 May 2004, in which he admitted the applicant’s guilt. The applicant submitted that he had dispensed with the services of the lawyer after he found out about this motion. He lastly submitted that the lawyer had failed to examine the witnesses who gave oral evidence. (ii) The Government 62. The Government submitted that the applicant had been granted free legal assistance from the day of his initial interview on 9 April 2004 and all the investigative measures, including interviews, confrontations with witnesses, etc., were carried out in the lawyer’s presence. The applicant had given his consent to be represented by the lawyer in question, which he once again confirmed on 10 April 2004. There was no evidence that, during either the investigation or the proceedings at two judicial instances, he was unsatisfied with his lawyer. He had never made any statements or complaints about the lawyer’s behaviour. If the applicant was unsatisfied with his lawyer, he could have dispensed with his services at any time. 63. The Government further submitted that the motion of 7 May 2004 did not concern the determination of the charge against the applicant but only the annulment of his detention, which was moreover rejected by the investigator. It could not therefore affect the determination of the charge or the effectiveness of the defence of the applicant’s rights. Nor did it play any role at any stage of the proceedings. Moreover, the lawyer pleaded not guilty on behalf of the applicant before the Court of Appeal. (b) The Court’s assessment 64. The Court reiterates that, although not absolute, the right of everyone charged with a criminal offence to be effectively defended by a lawyer, assigned officially if need be, is one of the fundamental features of a fair trial (see Krombach v. France, no. 29731/96, § 89, ECHR 2001-II). While Article 6 § 3 (c) confers on everyone charged with a criminal offence the right to “defend himself in person or through legal assistance ...”, it does not specify the manner of exercising this right. It thus leaves to the Contracting States the choice of the means of ensuring that it is secured in their judicial systems, the Court’s task being only to ascertain whether the method they have chosen is consistent with the requirements of a fair trial (see Sakhnovskiy v. Russia [GC], no. 21272/03, § 95, 2 November 2010). 65. In that connection it must be borne in mind that the Convention is intended to guarantee not rights that are theoretical or illusory but rights that are practical and effective; this is particularly so of the rights of the defence in view of the prominent place held in a democratic society by the right to a fair trial, from which they derive (see Airey v. Ireland, 9 October 1979, § 24, Series A no. 32). The Court observes that Article 6 § 3 (c) of the Convention speaks of “assistance” and not of “nomination”. The mere nomination of a lawyer does not ensure effective assistance since the lawyer appointed for legal aid purposes may die, fall seriously ill, be prevented for a protracted period from acting or shirk his duties. If they are notified of the situation, the authorities must either replace him or cause him to fulfil his obligations (see Artico v. Italy, judgment of 13 May 1980, Series A no. 37, § 33). 66. In the present case, the Court notes that on the next day following the applicant’s arrest a legal aid lawyer, H.I., was invited to represent his interests (see paragraph 18 above). It appears that the lawyer was present during all the subsequent investigative measures involving the applicant, such as interviews (see paragraphs 20 and 27 above), presentation of the charge (see paragraphs 21-22 above) and confrontations (see paragraphs 24‑26 above). However, the mere presence of a lawyer is not sufficient to satisfy the requirements of Article 6 § 3 (c). The Court notes with concern that, while being present at the above investigative measures, the lawyer, nevertheless, appears to have shown absolute passivity. He does not appear to have had any involvement whatsoever in the applicant’s interviews other than signing the relevant records and failed to pose any questions to the witnesses against the applicant during the confrontations. Furthermore, nothing suggests that the lawyer ever met with the applicant to discuss his case and to provide legal advice. The Court lastly cannot ignore the lawyer’s final speech made before the District Court which was devoid of any factual or legal arguments (see paragraph 40 above), as well as the fact that the lawyer appears not to have had any involvement in the drafting of the applicant’s appeal against the judgment of the District Court (see paragraph 43 above). 67. However, despite the foregoing, the Court cannot overlook the fact that the applicant never raised any complaints or tried to bring any of the above-mentioned to the attention of the authorities in any other possible way throughout the entire investigation and proceedings before the District Court, as well as almost the entire proceedings before the Court of Appeal. Not only did the applicant explicitly give his consent to be represented by lawyer H.I. in all the above-mentioned instances (see paragraphs 18, 22, 31 and 44 above), but he never showed any signs of dissatisfaction with his lawyer until the final hearing before the Court of Appeal (see paragraph 49 above). The applicant’s appeal against his conviction by the District Court was also absolutely silent on this point (see paragraph 43 above). He did finally raise this issue, as mentioned above, at the last hearing before the Court of Appeal and in his appeal to the Court of Cassation (see paragraphs 49 and 53 above). However, as admitted by the applicant himself, this was mostly motivated by his allegedly belated discovery of the lawyer’s motion of 7 May 2004, which, according to the applicant, contained submissions detrimental to his case (see paragraph 26 above), and not by any other failures or omissions committed by the lawyer. Thus, such protracted silence on the applicant’s part and the main reason for his belated complaint may cast doubt on the credibility of some of his allegations. In any event, even assuming that the entirety of the applicant’s allegations are true, it was still incumbent on him to bring the lawyer’s failures to the attention of the authorities, who cannot be blamed for such failures if they were not informed of them in a timely and proper manner. 68. Furthermore, despite the lawyer’s apparently passive behaviour throughout the investigation he did, nevertheless, file a motion on 7 May 2004 on the applicant’s behalf seeking his release (see paragraph 26 above). The Court does not share the applicant’s view that the lawyer deliberately acted to his detriment by stating in that motion that the applicant had pleaded guilty, since it is clear that the lawyer’s intention was to secure the applicant’s release from detention. Moreover, the lawyer did pose questions to some of the witnesses during the proceedings before the District Court and it can be construed from the answers received that the questions were pertinent, competent and of help to the applicant’s case (see paragraphs 34 and 36 above). He also insisted on several occasions before the Court of Appeal that measures be taken to ensure the attendance of the witnesses who had failed to appear, alleging that their statements were defamatory and lacked credibility (see paragraphs and 46-48 above). 69. In view of the above, there are not sufficient elements in the present case to conclude that the State-appointed lawyer manifestly failed to provide effective legal assistance or, even assuming that he did, that the authorities can be held liable for that failure in the particular circumstances of the case. 70. Accordingly, there has been no violation of Article 6 § 3 (c) taken together with Article 6 § 1 of the Convention. 2. Article 6 § 3 (d) taken together with Article 6 § 1 (a) The parties’ submissions (i) The applicant 71. The applicant submitted that he was unable to examine properly any of the witnesses, while witnesses V.Z., O.V. and S.K. were not examined at all. It was important for him to examine those witnesses because the first instance court relied on that evidence when convicting him, while the statements of the remaining witnesses were contradictory and unclear and not determinative of the charge against him. 72. In particular, since the distribution of leaflets was not considered an offence, the real issue of fact was whether the applicant had made calls inciting to a violent overthrow of the government. The only evidence before the courts which alleged that the applicant had made such calls was that provided by witnesses V.Z., O.V. and S.K. who had failed to appear in court and witness N.S. who had made contradictory statements. The latter witness had failed to identify properly the applicant and, even though he admitted in court that he had identified the applicant only because he had been told so by the prosecutor’s office, the first instance court nevertheless preferred witness N.S.’s pre-trial statement. As to the remaining witnesses, witness M.M. identified the applicant as the person distributing leaflets, while the arresting police officers, G.A. and G.D., did not hear what the applicant had said while distributing the leaflets. 73. The applicant objected to the Government’s allegation that it had been impossible to find and secure the attendance of witnesses V.Z., O.V. and S.K. and denied having consented to the reading out of their statements. Furthermore, the Court of Appeal must have been influenced by the statements of witnesses V.Z., O.V. and S.K. because theirs was the only evidence which suggested that he had called for a violent overthrow of the government. Moreover, the Court of Appeal, relying on those statements, reached a finding of consistency of evidence as a ground for dismissing his appeal. (ii) The Government 74. The Government claimed that the applicant had had the opportunity to examine witnesses both during the investigation and the court proceedings. He was not able to challenge the statements of witnesses V.Z., O.V. and S.K. because, despite the efforts of the authorities, it was impossible to find and bring them to court. For this reason the District Court decided to read out their statements and both the applicant and his lawyer consented to this. Furthermore, these were not the only witnesses in the applicant’s case and their statements were identical to the statements of other witnesses whom the applicant had the opportunity to examine. Thus, their statements did not play a decisive role in securing the applicant’s guilt. Moreover, the Court of Appeal did not rely on the statements of witnesses V.Z., O.V. and S.K., finding that they should not form a basis for the applicant’s conviction because these witnesses had failed to appear in court despite a court order. The Government lastly submitted that the domestic courts were better placed to judge whether there were any contradictions in the witness evidence. (b) The Court’s assessment 75. The Court reiterates that the admissibility of evidence is primarily a matter for regulation by national law and, as a general rule, it is for the national courts to assess the evidence before them. The Court’s task under the Convention is not to give a ruling as to whether statements of witnesses were properly admitted as evidence, but rather to ascertain whether the proceedings as a whole, including the way in which evidence was taken, were fair (see, among other authorities, Doorson v. the Netherlands, 26 March 1996, § 67, Reports of Judgments and Decisions 1996‑II). 76. Article 6 § 3 (d) of the Convention enshrines the principle that, before an accused can be convicted, all evidence against him must normally be produced in his presence at a public hearing with a view to adversarial argument. Exceptions to this principle are possible but must not infringe the rights of the defence, which, as a rule, require that the accused should be given an adequate and proper opportunity to challenge and question a witness against him, either when that witness makes his statement or at a later stage of proceedings (see Delta v. France, 19 December 1990, § 36, Series A no. 191‑A; Van Mechelen and Others v. the Netherlands, 23 April 1997, § 51, Reports of Judgments and Decisions 1997‑III; and Lucà v. Italy, no. 33354/96, § 39, ECHR 2001‑II). 77. There are two requirements which follow from the above general principle. First, there must be a good reason for the non-attendance of a witness. Second, when a conviction is based solely or to a decisive degree on depositions that have been made by a person whom the accused has had no opportunity to examine or to have examined, whether during the investigation or at the trial, the rights of the defence may be restricted to an extent that is incompatible with the guarantees provided by Article 6 (see Al-Khawaja and Tahery v. the United Kingdom [GC], nos. 26766/05 and 22228/06, § 119, 15 December 2011). 78. The requirement that there be a good reason for admitting the evidence of an absent witness is a preliminary question which must be examined before any consideration is given as to whether that evidence was sole or decisive. Even where the evidence of an absent witness has not been sole or decisive, the Court has still found a violation of Article 6 §§ 1 and 3 (d) when no good reason has been shown for the failure to have the witness examined. This is because as a general rule witnesses should give evidence during the trial and that all reasonable efforts will be made to secure their attendance. Thus, when witnesses do not attend to give live evidence, there is a duty to enquire whether that absence is justified (ibid., § 120). 79. In the present case, the Court notes that the applicant was found guilty of making calls inciting to a violent overthrow of the government. These calls amounted to various statements he allegedly addressed to a number of individuals at a marketplace while handing out leaflets inviting them to attend a demonstration. These individuals, namely N.S., M.M., V.Z., O.V. and S.K., acted as witnesses in the applicant’s criminal case. Even though the two arresting police officers, G.A. and G.D., also made statements which were taken into account by the domestic courts, their statements appear to have served solely as circumstantial evidence, since neither of the police officers claimed to have heard the statements made by the applicant at the marketplace. Thus, the entire criminal case against the applicant was based on the statements of the above-mentioned five witnesses. 80. The Government alleged that only two of those witness statements, namely those made by N.S. and M.M., were actually relied on when convicting the applicant, since the Criminal and Military Court of Appeal refused to admit statements of witnesses V.Z., O.V. and S.K. as evidence. This allegation, however, contradicts the materials of the case. While the statement of witness V.Z. indeed appears to have been excluded as evidence by the Court of Appeal, the same cannot be said of the statements of witnesses O.V. and S.K. On the contrary, the Court of Appeal explicitly referred to that evidence when substantiating the applicant’s guilt (see paragraph 51 above). Thus, the applicant’s conviction was based, inter alia, on the statements of witnesses O.V. and S.K. The applicant, however, was not given the opportunity to examine the witnesses or have them examined either during the pre-trial proceedings or in court. No judicial authority ever heard those witnesses either. 81. The Court observes that the reason for non-attendance of witnesses O.V. and S.K. was their alleged absence from Armenia. However, it is not convinced that, in the particular circumstances of the case, this could be considered a good reason justifying the failure to have these witnesses examined and for admitting their evidence. Notably, the fact that a witness is absent from the country where the proceedings are conducted is in itself not sufficient to satisfy the requirements of Article 6 § 3 (d), which requires the Contracting States to take positive steps to enable the accused to examine or have examined witnesses against him (see Sadak and Others v. Turkey, nos. 29900/96, 29901/96, 29902/96 and 29903/96, § 67, ECHR 2001‑VIII). Such measures form part of the diligence which the Contracting States must exercise in order to ensure that the rights guaranteed by Article 6 are enjoyed in an effective manner (see Colozza v. Italy, 12 February 1985, § 28, Series A no. 89). 82. The Court is ready to accept that the domestic courts made certain efforts to inquire about the reasons for the absence of witnesses O.V. and S.K. and to secure their attendance. The District Court appears to have resorted to the help of the police following their failure to appear (see paragraphs 32 and 38 above), while the Court of Appeal decided to compel them to appear, adjourning the hearings of 30 June and 6 July 2004 and ordering the police to ensure their attendance at the next hearing (see paragraphs 45 and 46 above). However, it is not clear what efforts were made by the police to locate those witnesses other than finding out that they were absent from their permanent places of residence. There is no evidence suggesting that the police ever attempted to find out their new addresses or to inquire about the details of their absence, including whether it was permanent or temporary and whether O.V. and S.K. intended to return or to visit home in the foreseeable future. In spite of such lack of any inquiries, the District Court proceeded to read out their statements (see paragraph 38 above). 83. It is true that the presiding judge of the Court of Appeal appears to have personally tried to contact O.V. and S.K., as a result of which it was disclosed that the former had left for Russia and the latter had left Armenia (see paragraph 45 above). However, similarly to the police, he made no further efforts to establish their whereabouts. The reply of O.V.’s wife that she was unaware of O.V.’s whereabouts was accepted without any further inquiries and no attempts were made to establish his location by resorting to international legal assistance mechanisms if that was indeed the case. As regards witness S.K., the presiding judge does not appear to have even inquired about his new whereabouts. No time was allowed or instructions made to carry out any further inquiries and the Court of Appeal proceeded hastily to read out the witness statements at the next hearing of 7 July 2004 (see paragraph 47 above). Moreover, the Court of Appeal did so despite the fact that it had earlier found the attendance of the witnesses in question “indispensable” (see paragraph 45 above). 84. The Court therefore concludes that the efforts made by the authorities cannot be said to have been sufficient in the circumstances of the case (see, in this respect, Artner v. Austria, 28 August 1992, § 21, Series A no. 242‑A, where the Austrian police were instructed by the trial court to make every effort to find a missing witness; Berisha v. the Netherlands (dec.), no. 42965/98, 4 May 2000, where the Dutch authorities tried to call a witness residing in the Slovak Republic through the Slovak authorities; and Haas v. Germany (dec.), no. 73047/01, 17 November 2005, where the German authorities made considerable efforts to secure the attendance of a witness serving a prison sentence in Lebanon). Thus, it cannot be said that there were good reasons for the failure to have witnesses O.V. and S.K. examined or that the domestic authorities complied with their duty to inquire whether their absence was justified. 85. It is true that the applicant appears to have consented before the District Court to the pre-trial statements of witnesses O.V. and S.K. being read out (see paragraph 38 above). This, however, is not sufficient for the Court to conclude that he thereby waived his right to examine the witnesses. The Court reiterates that waiver of the exercise of a right guaranteed by the Convention – in so far as such waiver is permitted in domestic law – must be established in an unequivocal manner (see Colozza, cited above, § 28). The Court notes that the applicant complained both before the Criminal and Military Court of Appeal and before the Court of Cassation that he had been unable to examine witnesses O.V. and S.K. (see paragraph 43 and 53 above). He further explicitly requested before the Court of Appeal that these witnesses appear in court, alleging that their statements lacked credibility (see paragraph 47 above). The fact that the Court of Appeal made attempts, albeit unsuccessful, to ensure their appearance similarly suggests that the applicant was not considered to have waived his right to examine them (see paragraphs 45-48 above). 86. The foregoing considerations are sufficient to enable the Court to conclude that the applicant was unreasonably restricted in his right to examine witnesses whose testimony played a decisive role in securing his conviction. He was unable to subject their credibility to scrutiny or cast any doubt on their depositions. This is particularly worrying taking into account that the witnesses in question were not personally acquainted with the applicant and were never even asked to identify him at any stage of the proceedings. 87. Accordingly, there has been a violation of Article 6 § 3 (d) taken together with Article 6 § 1 of the Convention. II. ALLEGED VIOLATION OF ARTICLE 10 OF THE CONVENTION 88. The applicant complained about a violation of his right to freedom of expression. He relied on Article 10 of the Convention which, in so far as relevant, provides: “1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers... 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.” A. Admissibility 1. The parties’ submissions (a) The Government 89. The Government submitted that the applicant had failed to exhaust the domestic remedies since he did not raise the question of an alleged violation of his Article 10 rights at the domestic level. He simply denied the facts on which the charge against him was based, namely that he had made public calls inciting to a violent overthrow of the government, and this was not sufficient for exhaustion purposes. Furthermore, no issue of a violation of freedom of expression could arise if, as the applicant claimed, no expression as such was made. (b) The applicant 90. The applicant submitted that his denial of the facts on which the charge was based was sufficient for exhaustion purposes. Firstly, the court proceedings were just one activity of many by the State aimed at violating his freedom of expression, others being systematic harassment by the police and the search conducted at his house. The criminal charge against him was designed to prevent him from continuing his political activity. Secondly, he indeed denied making any public calls inciting to a violent overthrow of the government but this denial was immaterial since he was in any event convicted. He was thus deprived of an adequate remedy. 91. The applicant argued, in the alternative, that his conviction was based on facts to which he admitted, namely the distribution of leaflets. He appealed against this conviction and thereby exhausted the domestic remedies. 2. The Court’s assessment 92. The Court reiterates that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention obliges those seeking to bring a case against the State before an international judicial body to use first the remedies provided by the national legal system, thus dispensing States from answering before an international body for their acts before they have had an opportunity to put matters right through their own legal systems. In order to comply with the rule, normal recourse should be had by an applicant to remedies which are available and sufficient to afford redress in respect of the breaches alleged (see, among other authorities, Assenov and Others v. Bulgaria no. 24760/94, § 85, ECHR 1999-VIII). 93. While in the context of machinery for the protection of human rights the rule of exhaustion of domestic remedies must be applied with some degree of flexibility and without excessive formalism, it does not require merely that applications should be made to the appropriate domestic courts and that use should be made of remedies designed to challenge impugned decisions which allegedly violate a Convention right. It normally requires also that the complaints intended to be made subsequently at the international level should have been aired before those same courts, at least in substance and in compliance with the formal requirements and time‑limits laid down in domestic law (see, among other authorities, Azinas v. Cyprus [GC], no. 56679/00, § 38, ECHR 2004‑III). 94. The object of the rule on exhaustion of domestic remedies is to allow the national authorities (primarily the judicial authorities) to address the allegation made of violation of a Convention right and, where appropriate, to afford redress before that allegation is submitted to the Court. In so far as there exists at national level a remedy enabling the national courts to address, at least in substance, the argument of violation of the Convention right, it is that remedy which should be used. If the complaint presented before the Court has not been put, either explicitly or in substance, to the national courts when it could have been raised in the exercise of a remedy available to the applicant, the national legal order has been denied the opportunity to address the Convention issue which the rule on exhaustion of domestic remedies is intended to give it. It is not sufficient that the applicant may have, unsuccessfully, exercised another remedy which could have overturned the impugned measure on other grounds not connected with the complaint of violation of a Convention right. It is the Convention complaint which must have been aired at national level for there to have been exhaustion of “effective remedies”. It would be contrary to the subsidiary character of the Convention machinery if an applicant, ignoring a possible Convention argument, could rely on some other ground before the national authorities for challenging an impugned measure, but then lodge an application before the Court on the basis of the Convention argument (ibid.). 95. Turning to the circumstances of the present case, the Court notes once again that the applicant was charged and convicted of making public calls inciting a violent overthrow of the government. The applicant never claimed before any domestic judicial authority that his charge and conviction on that ground violated his right to freedom of expression (see paragraphs 39, 43 and 53 above). Moreover, he did not even make such claims in the alternative but solely alleged before all the instances that he had never made the calls in question. As regards the distribution of leaflets, the Court does not agree with the applicant that this act in itself formed a basis for his conviction. Moreover, by making this assertion the applicant contradicted his own submissions under Article 6 § 3 (d) (see paragraph 72 above). In any event, even assuming that distribution of leaflets formed a basis for the applicant’s conviction, the applicant still did not allege before the domestic courts a violation of his right to freedom of expression on that ground either. Thus, the applicant failed to raise in substance before the domestic courts his Convention complaint which he submitted to the Court. 96. It follows that the applicant has failed to exhaust domestic remedies, and that this part of the application must be rejected pursuant to Article 35 §§ 1 and 4 of the Convention. III. OTHER ALLEGED VIOLATIONS OF THE CONVENTION 97. The applicant lastly raised a number of other complaints under Article 3, Article 5 §§ 1, 2, 3 and 4, and Articles 8, 11, 13 and 14 of the Convention, as well as Article 3 of Protocol No. 1. 98. Having regard to all the material in its possession, and in so far as these complaints fall within its competence, the Court finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention. IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION 99. 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 100. The applicant claimed a total of 303,800 Armenian drams in respect of pecuniary damage, which included lost profit and the costs of medical treatment and food parcels incurred as a result of his pre-trial detention. The applicant also claimed EUR 15,000 in respect of non‑pecuniary damage. 101. The Government submitted that the applicant’s claim for pecuniary damage was not duly substantiated and had no causal link with the alleged violations. They further asked the Court to reject the applicant’s claim for non-pecuniary damage. 102. The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. On the other hand, it awards the applicant EUR 2,500 in respect of non‑pecuniary damage. 103. On the other hand, the Court considers it necessary to point out that a judgment in which it finds a violation of the Convention or its Protocols imposes on the respondent State a legal obligation not just to pay those concerned the sums awarded by way of just satisfaction, if any, but also to choose, subject to supervision by the Committee of Ministers, the general and/or, if appropriate, individual measures to be adopted in its domestic legal order to put an end to the violation found by the Court and make all feasible reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Scozzari and Giunta v. Italy [GC], nos. 39221/98 and 41963/98, § 249, ECHR 2000-VIII; Ilaşcu and Others v. Moldova and Russia [GC], no. 48787/99, § 487, ECHR 2004‑VII; and Lungoci v. Romania, no. 62710/00, § 55, 26 January 2006). In the case of a violation of Article 6 of the Convention, the applicant should as far as possible be put in the position he would have been in had the requirements of this provision not been disregarded (see, mutatis mutandis, Sejdovic v. Italy [GC], no. 56581/00, § 127, ECHR 2006-...; and Yanakiev v. Bulgaria, no. 40476/98, § 89, 10 August 2006). 104. The Court notes in this connection that Articles 426.1 and 426.4 of the Code of Criminal Procedure allow the reopening of the domestic proceedings if the Court has found a violation of the Convention or its Protocols (see paragraph 57 above). The Court is in any event of the view that the most appropriate form of redress in cases where it finds that a trial was held in breach of the fair trial guarantees of Article 6 of the Convention would, as a rule, is to reopen the proceedings in due course and re-examine the case in keeping with all the requirements of a fair trial (see, mutatis mutandis, Lungoci, cited above, § 56). B. Costs and expenses 105. The applicant also claimed 2,700 United States dollars (USD) and 5,932.45 pounds sterling (GBP) for the costs and expenses incurred before the Court. The applicant submitted detailed time sheets stating hourly rates in support of his claims. 106. The Government submitted that the claims in respect of the domestic and foreign lawyers were not duly substantiated with documentary proof, since the applicant had failed to produce any invoices, contracts or any other legal document. Furthermore, the applicant had used the services of an excessive number of lawyers, despite the fact that the case was not so complex as to justify such a need. 107. 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 have been actually and necessarily incurred and were reasonable as to quantum. In the present case, the Court notes at the outset that no power of attorney has ever been submitted in respect of one of the KHRP lawyers and therefore rejects the relevant claims. The Court further reiterates that legal costs are only recoverable in so far as they relate to the violation found (see Beyeler v. Italy [GC], no. 33202/96, § 27, ECHR 2000‑I). The Court notes that in the present case only a violation of Article 6 was found on one count while the entirety of the written pleadings, including the initial application and the subsequent observations, concerned numerous Articles of the Convention and Protocol No. 1. Therefore the claim cannot be allowed in full and a considerable reduction must be applied. Making its own assessment, the Court awards the applicant a total sum of EUR 1,600 for costs and expenses, to be paid in pounds sterling into his representatives’ bank account in the United Kingdom. C. Default interest 108. 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 complaint concerning an alleged violation of the applicant’s right to effective legal assistance and his right to examine witnesses against him admissible under Article 6 § 1 taken together with Article 6 § 3 (c) and (d) of the Convention and the remainder of the application inadmissible; 2. Holds that there has been no violation of Article 6 § 1, taken together with Article 6 § 3 (c) of the Convention, on account of the alleged failure by the applicant’s legal aid lawyer to provide effective legal assistance; 3. Holds that there has been a violation of Article 6 § 1, taken together with Article 6 § 3 (d) of the Convention, on account of the applicant’s inability to examine witnesses against him; 4. 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 Armenian drams at the rate applicable at the date of settlement: (i) EUR 2,500 (two thousand five hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage; (ii) EUR 1,600 (one thousand six hundred euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses, to be converted into pounds sterling at the rate applicable at the date of settlement and to be paid into their representatives’ bank account in the United Kingdom; (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 applicant’s claim for just satisfaction. Done in English, and notified in writing on 10 April 2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Santiago QuesadaJosep Casadevall Registrar President

JUDGMENT OF THE COURT OF FIRST INSTANCE (Sixth Chamber) 7 October 2009 ( *1 ) ‛Plant protection products — Active substance chlorothalonil — Amendment of the entry in Annex I to Directive 91/414/EEC — Directive 2006/76/EC — Retroactivity — No transitional period — Legal certainty — Legitimate expectations — Principle of equal treatment’ In Case T-380/06, Vischim Srl, established in Cesano Maderno (Italy), represented by C. Mereu and K. Van Maldegem, lawyers, applicant, v Commission of the European Communities, represented by L. Parpala and B. Doherty, acting as Agents, defendant, APPLICATION for the annulment of the second paragraph of Article 2 of Commission Directive 2006/76/EC of 22 September 2006 amending Council Directive 91/414/EEC as regards the specification of the active substance chlorothalonil (OJ 2006 L 263, p. 9), THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Sixth Chamber), composed of A.W.H. Meij, President, F. Dehousse and V. Vadapalas (Rapporteur), Judges, Registrar: C. Kantza, Administrator, having regard to the written procedure and further to the hearing on 25 September 2008, gives the following Judgment Legal context Directive 91/414/EEC As provided in Article 4(1)(a) of Council Directive 91/414/EEC of 15 July 1991 concerning the placing of plant protection products on the market (OJ 1991 L 230, p. 1), ‘Member States shall ensure that a plant protection product is not authorised unless its active substances are listed in Annex I and any conditions laid down therein are fulfilled’. Article 5(1) of Directive 91/414 states that, ‘in the light of current scientific and technical knowledge, an active substance shall be included in Annex I for an initial period not exceeding 10 years, if it may be expected that plant protection products containing the active substance will fulfil the … conditions’ which are then set out and relate to the products not being harmful for human or animal health or the environment. By virtue of the first and second indents of Article 5(4) of Directive 91/414, an active substance’s inclusion may be subject to requirements relating to ‘the minimum degree of purity of the active substance’ and to ‘the nature and maximum content of certain impurities’. Article 6(1) of Directive 91/414 provides: ‘Inclusion of an active substance in Annex I shall be decided in accordance with the procedure laid down in Article 19. The following shall also be decided in accordance with that procedure: — any conditions for inclusion, — amendments to Annex I, where necessary, …’ The first subparagraph of Article 8(2) of Directive 91/414 provides that, ‘by way of derogation from Article 4 …, a Member State may, during a period of 12 years following the notification of this Directive, authorise the placing on the market in its territory of plant protection products containing active substances not listed in Annex I that are already on the market two years after the date of notification of this Directive’. The second subparagraph of Article 8(2) of Directive 91/414 states that within the same 12-year period the Commission is to commence a programme of work for the gradual examination of those active substances. According to the fourth subparagraph of Article 8(2), ‘during [that] period … it may, following examination by the Committee referred to in Article 19 of such active substance, be decided by the procedure laid down in that Article that the substance can be included in Annex I and under which conditions, or, in cases where the requirements of Article 5 are not satisfied or the requisite information and data have not been submitted within the prescribed period, that such active substance will not be included in Annex I’. This provision adds that ‘the Member States shall ensure that the relevant authorisations are granted, withdrawn or varied, as appropriate, within a prescribed period’. Article 19 of Directive 91/414, as amended by Council Regulation (EC) No 806/2003 of 14 April 2003 (OJ 2003 L 122, p. 1), provides that the Commission is to be assisted by a regulatory committee, the Standing Committee on the Food Chain and Animal Health (‘the Committee’). As regards the active substance chlorothalonil, the period referred to in Article 8(2) of Directive 91/414, which was to expire on 26 July 2003, was extended, initially until 31 December 2005, by Commission Regulation (EC) No 2076/2002 of 20 November 2002 (OJ 2002 L 319, p. 3), then until 31 December 2006, by Commission Regulation (EC) No 1335/2005 of 12 August 2005 (OJ 2005 L 211, p. 6), unless a decision on its inclusion in Annex I to Directive 91/414 was taken before that date. Regulation (EEC) No 3600/92 Commission Regulation (EEC) No 3600/92 of 11 December 1992 laying down the detailed rules for the implementation of the first stage of the programme of work referred to in Article 8(2) of Directive 91/414 (OJ 1992 L 366, p. 10) sets out the procedure for the assessment of a number of active substances, including chlorothalonil, with a view to their possible inclusion in Annex I to that directive. Article 4(1) of Regulation No 3600/92 states that ‘any producer wishing to secure the inclusion of an active substance … in Annex I to … Directive [91/414] shall so notify the Commission within six months of the date of entry into force of this Regulation’. Article 7(1) and (2) of Regulation No 3600/92, as amended by Commission Regulation (EC) No 1199/97 of 27 June 1997 (OJ 1997 L 170, p. 19), governs the manner in which the dossiers submitted by notifiers are examined. The fourth subparagraph of Article 8(3) of Regulation No 3600/92, as amended, states: ‘After the examination … the Commission shall … present to the Committee: (a) a draft directive to include the active substance in Annex I to … Directive [91/414], setting out where appropriate the conditions, including the time-limit, for such inclusion; …’ Background to the dispute Inclusion of chlorothalonil in Annex I to Directive 91/414 On 8 July 1993 the applicant, Vischim Srl, an Italian company producing chlorothalonil, informed the Commission of its wish to secure the inclusion of that active substance in Annex I to Directive 91/414. Only two notifiers in respect of chlorothalonil submitted their dossiers within the deadline, namely ISK Biotech Europe (which was replaced in the course of the assessment procedure by Zeneca Agrochemicals, which in turn became Syngenta) and the applicant. On 16 September 2005, after those dossiers had been examined, the Commission adopted Directive 2005/53/EC amending Directive 91/414 to include chlorothalonil, chlorotoluron, cypermethrin, daminozide and thiophanate-methyl as active substances (OJ 2005 L 241, p. 51). By virtue of Article 1 of Directive 2005/53 and the annex thereto, chlorothalonil was included under No 102 in the table in Annex I to Directive 91/414. The fourth column of that table, headed ‘Purity’, states: ‘Hexachlorobenzene: not more than 0.01g/kg’. It is apparent from the review report for chlorothalonil (document SANCO/4343/2000 final of 14 February 2005; ‘the review report’) that that condition relating to the maximum content of hexachlorobenzene (HCB) was laid down having regard to the specification for chlorothalonil adopted by the FAO (Food and Agriculture Organisation of the United Nations) in February 2005. Under Article 3(1) of Directive 2005/53, the Member States were obliged, where necessary, to amend or withdraw existing authorisations for plant protection products containing chlorothalonil by 31 August 2006, verifying whether the conditions in Annex I to Directive 91/414 were met and whether the holder of the authorisation had, or had access to, a dossier satisfying the requirements of Annex II to Directive 91/414 in accordance with the conditions of Article 13 of that directive. Directive 2005/53 entered into force on 1 March 2006. Under the first and second paragraphs of Article 2, the Member States had to adopt and publish the provisions necessary in order to comply with Directive 2005/53 by 31 August 2006 at the latest, and to apply them from 1 September 2006. On 25 November 2005, the applicant brought an action for, inter alia, the annulment of Directive 2005/53 (Case T-420/05). In the context of that action, the applicant made two successive applications for interim measures, which were dismissed by orders of the President of the Court of First Instance of 4 April 2006 in Case T-420/05 R Vischim v Commission, not published in the ECR, and of 13 October 2006 in Case T-420/05 R II Vischim v Commission [2006] ECR II-4085, the latter order being upheld by order of the President of the Court of Justice of 3 April 2007 in Case C-459/06 P(R) Vischim v Commission, not published in the ECR. Amendment of the entry in Annex I to Directive 91/414 In December 2005, the FAO published, on the basis of the information submitted by the applicant, a new specification for chlorothalonil increasing the maximum HCB content to 0.04g/kg. The applicant informed the Commission of that new specification by letter of 16 December 2005. In March 2006, the Commission asked the rapporteur Member State to evaluate the various versions of chlorothalonil conforming to the new FAO specification, including the applicant’s product. Simultaneously, the Commission staff sent the Member States an email in the following terms: ‘‘[The rapporteur Member State] has undertaken to examine the equivalence of the different sources (including Vischim’s). If the conclusion is that these are as safe as the reference source, the Commission would consider amending [Directive 91/414] as regards the purity levels for HCB. In this scenario, it might be difficult to amend the text formally before 1 September 2006, so some degree of administrative flexibility might be required around that date. It would be unfortunate if products were withdrawn from a national market only to be reauthorised shortly afterwards. It is obvious that a withdrawal of authorisations is still required when it is shown that the outcome of the examination of the dossier is clearly unfavourable or when the necessary administrative provisions have not been met.’ When the rapporteur Member State completed its assessment in April 2006, it found that chlorothalonil containing 0.04g/kg of HCB did not involve risks additional to those already taken into consideration when Directive 2005/53 was adopted. Accordingly, it proposed an amendment to the specification for chlorothalonil provided for by Directive 2005/53. On 13 and 14 July 2006 that amendment was approved by the Committee. As regards the period relating to the introduction of the amended specification, the minutes of the meeting of the Committee state inter alia as follows: ‘There was a general agreement on modifying the concerned specification and [the Commission] promised to propose the draft for adoption without delay … As regards the question raised on a possible extension of the 6-months period for the submission of missing studies, it seems inappropriate to do so. This could set a precedent and would expose [the Commission] to criticism as regards [unequal] treatment between notifiers … For the above reasons, it is considered inopportune to deviate from the standard period foreseen … by the inclusion directive … [The United Kingdom] asks to extend the date of compliance in this case in order to allow Vischim to start an arbitration procedure under national law in order to get access to vertebrate studies after the vote on inclusion of the substance.’ By letter of 27 July 2006, the applicant stated to the Commission that, ‘in order to ensure its effectiveness in relation to [the applicant’s] registrations, the amendment [had to], first, enter into force before 31 August 2006 and second, set a new period for the Member States to verify compliance with the Annex I inclusion conditions’. The Commission did not reply to that letter. Between July and September 2006, the applicant received letters from the competent authorities in the United Kingdom of Great Britain and Northern Ireland, the Kingdom of Belgium and Ireland informing it of their intention to withdraw its product from the market. In particular, the letter sent to the applicant by the United Kingdom authorities, dated 28 July 2006, is in the following terms: ‘[Your product] is compliant with the new [purity] specifications … as amended by the [Committee on] 13-14 July 2006 [but] you have not yet demonstrated appropriate access to Annex II data to support your existing approved chlorothalonil-containing products... Therefore a Notice of Intent to revoke your existing chlorothalonil products is enclosed with this letter.’ On 22 September 2006, the Commission adopted Directive 2006/76/EC amending Directive 91/414 as regards the specification of the active substance chlorothalonil (OJ 2006 L 263, p. 9; ‘the contested directive’). Pursuant to Article 1 of the contested directive, the specification laid down for chlorothalonil when it was included in Annex I to Directive 91/414 was replaced by the annexed table. The fourth column of that table, headed ‘Purity’, states: ‘Hexachlorobenzene: not more than 0.04g/kg’. The contested directive entered into force on 23 September 2006. Under Article 2, the Member States had to adopt and publish the provisions necessary in order to comply with the contested directive by 31 August 2006 at the latest, and to apply them from 1 September 2006. Procedure and forms of order sought By application lodged at the Registry of the Court of First Instance on 15 December 2006, the applicant brought the present action. By a separate document lodged on the same day, the applicant applied for an expedited procedure pursuant to Article 76a of the Rules of Procedure of the Court of First Instance. This request was rejected by decision of the President of the Fourth Chamber of the Court of First Instance of 24 January 2007. On 27 February 2007 the Commission lodged, in a separate document, an objection of inadmissibility. After the applicant had submitted its observations, consideration of the objection of inadmissibility was reserved for the final judgment by order of the Court of First Instance of 27 June 2007. When the defence had been lodged, the Court decided, in accordance with Article 47(1) of the Rules of Procedure, that a second exchange of pleadings was unnecessary. Upon a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Sixth Chamber, to which the present case was consequently allocated. As a member of the Chamber was unable to sit, the President of the Court of First Instance designated another Judge to complete the Chamber pursuant to Article 32(3) of the Rules of Procedure. After the parties had been heard, the present case and Case T-420/05 were joined for the purposes of the oral procedure. Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure, put certain questions in writing to the parties, which replied to them by letters of 16 June and 7 and 14 July 2008. The parties presented oral argument and replied to the questions put by the Court at the hearing on 25 September 2008. The applicant claims that the Court should: — partially annul the contested directive, in particular the second paragraph of Article 2 thereof; — order the Commission to provide for accurate, reasonable and legally acceptable prospective time-limits regarding the contested directive; — order the Commission to pay the costs. The Commission contends that the Court should: — dismiss the action as inadmissible or, in the alternative, as unfounded; — order the applicant to pay the costs. Law Admissibility In relation, first, to the applicant’s request that the Court order the Commission to provide for accurate, reasonable and legally acceptable prospective time-limits regarding the contested directive, it is to be recalled that, when reviewing legality on the basis of Article 230 EC, the Community judicature is not entitled to issue directions to the institutions (Case T-155/04 SELEX Sistemi Integrati v Commission [2006] ECR II-4797, paragraph 28). Accordingly, that request, set out in the applicant’s second head of claim, is inadmissible. Next, the Commission contends that the request that the Court annul the second paragraph of Article 2 of the contested directive is inadmissible, first, pleading that the partial annulment sought by the applicant is impossible and, second, invoking the legislative nature of the contested directive. The applicant maintains that its request is admissible. As regards the Commission’s first plea of inadmissibility, it is settled case-law that partial annulment of an act is possible only if the elements whose annulment is sought may be severed from the remainder of the act. That requirement of severability is not satisfied where the partial annulment would have the effect of altering the substance of the contested act (see Case C-540/03 Parliament v Council [2006] ECR I-5769, paragraphs 27 and 28, and the case-law cited). Under the second paragraph of Article 2 of the contested directive, the Member States were to apply the provisions adopted to comply with that directive from 1 September 2006, and thus retroactively. The applicant maintains that its action does not seek the total annulment of the contested directive, which is essentially favourable to it, but concerns only the directive’s temporal effects, which are defined in particular in the provision at issue. The Commission contends that the provision in question, defining the temporal scope of the contested directive, is not severable from it, because if the provision were annulled the contested directive would become inapplicable. It is to be observed that there is nothing to prevent the legality of a Community act from being put in issue only as regards its temporal effects and, in particular, its retroactive effect (see, to this effect, Case C-368/89 Crispoltoni [1991] ECR I-3695 and Joined Cases C-260/91 and C-261/91 Diversinte and Iberlacta [1993] ECR I-1885). Also, in an action whose purpose is not to secure the removal of a substantive provision favourable to the applicant but only to have the provision defining its temporal effects annulled, the Community judicature may decide, under the second paragraph of Article 231 EC, to maintain the contested act as it stands until the competent institutions have adopted the measures necessary to comply with the judgment (see, to this effect, Case T-7/99 Medici Grimm v Council [2000] ECR II-2671, paragraphs 93 and 94, and the case-law cited). Furthermore, while the second paragraph of Article 231 EC refers only to regulations, the scope of that provision must extend to acts of the institutions which, although they are not in the form of a regulation, nevertheless produce similar effects (see, to this effect, Case C-295/90 Parliament v Council [1992] ECR I-4193, paragraph 26). Accordingly, the plea of inadmissibility relied upon by the Commission to the effect that the contested directive’s partial annulment, limited to the second paragraph of Article 2 defining its temporal effects, is not possible should be dismissed. As regards the Commission’s second plea of inadmissibility, concerning the legislative nature of the contested directive, it is to be remembered that the fact that the fourth paragraph of Article 230 EC makes no express provision regarding the admissibility of actions brought by natural or legal persons for annulment of a directive is not sufficient to render such actions inadmissible (Case T-135/96 UEAPME v Council [1998] ECR II-2335, paragraph 63, and order in Case T-223/01 Japan Tobacco and JT International v Parliament and Council [2002] ECR II-3259, paragraph 28). The applicant, as a notifier and a holder of existing authorisations for plant protection products containing chlorothalonil, is directly and individually concerned by the inclusion of that active substance in Annex I to Directive 91/414 as provided for by Directive 2005/53 and, therefore, by the contested directive amending the conditions of its inclusion. Moreover, the contested directive was adopted following an assessment requested by the applicant and relating inter alia to its product. It is clear from the foregoing that the applicant is entitled to seek the annulment of the contested directive as regards the temporal effects defined by the second paragraph of Article 2 thereof. Substance Arguments of the parties The first plea advanced by the applicant in support of its action alleges a failure to state reasons. The contested directive does not contain reasoning justifying its retroactive effect. The Commission did not explain how, de jure and de facto, its retroactivity was to operate so as to enable the amended specification to be applied effectively. The applicant’s second plea alleges breach of Article 8(2) of Directive 91/414 and Article 8(3)(a) of Regulation No 3600/92. In its submission, those provisions require the Commission to set, in a directive relating to the inclusion of an active substance in Annex I to Directive 91/414, a transitional period for the review of existing national authorisations. The existence of that obligation is confirmed by the Commission’s practice. To have any purpose and effect that transitional period needs to be prospective, that is to say from the date upon which the contested directive entered into force. By not prescribing such a transitional period in the present case, the Commission thus infringed an essential procedural requirement imposed upon it by Directive 91/414 and Regulation No 3600/92. While continuing to centre its arguments around the absence of a prospective transitional period in the contested directive, the applicant pleads, next, breach of the principles of non-retroactivity, legal certainty, the protection of legitimate expectations and equal treatment. The applicant recalls the case-law according to which a Community measure cannot apply retroactively save in exceptional cases, where the purpose of the measure so requires and the legitimate expectations of those concerned are respected. Neither of those conditions is met here. The retroactive effect of the contested directive cannot be justified by the need to avoid application of the stricter specification laid down by Directive 2005/53. That directive has already produced legal effects, namely the withdrawal of the authorisations held by the applicant. In those circumstances, the retroactive amendment would only have an effect if coupled with a prospective transitional period during which compliance with the new specification can be demonstrated. Moreover, the failure to prescribe a new transitional period is contrary to economic operators’ legitimate expectations created by the applicable legislation and the Commission’s practice. In particular, in the absence of a new transitional period, the retroactive effect of the contested directive thwarted the applicant’s legitimate expectations, inasmuch as it was not in a position to rely on the rights resulting from the amendment of the specification for chlorothalonil. In the absence of a transitional period, the applicant could not ‘turn back the clock’ to submit its dossier to the national authorities, for them to check its product’s compliance with regard to the amended specification introduced by the contested directive. The Member States, for their part, could not comply with their obligations in the light of the new applicable provisions, in particular assess or re-assess the applicant’s national authorisations in the light of the new specification. Thus, the contested directive is devoid of practical effect and infringes the principle of legal certainty. Nor has the Commission treated the applicant in the same way as the producers concerned by other measures adopted in the same field, which have provided for a transitional period following the inclusion of the active substances in Annex I to Directive 91/414, and in particular in the same way as the other notifier of chlorothalonil, Syngenta, which benefited from such a period under Directive 2005/53. The Commission contests the applicant’s arguments. Findings of the Court It is appropriate to consider first the alleged failure to comply with Article 8(2) of Directive 91/414 and Article 8(3)(a) of Regulation No 3600/92 and to observe previous Commission practice, then breach of the various general principles of law relied upon by the applicant, and finally breach of the duty to state reasons. — The alleged failure to comply with Article 8(2) of Directive 91/414 and Article 8(3)(a) of Regulation No 3600/92 and to observe previous Commission practice As regards, in the first place, the provisions allegedly infringed, neither of them imposes an obligation upon the Commission to prescribe a transitional period for the purpose of reviewing existing national authorisations. First, Article 8(2) of Directive 91/414 prescribes a programme of work with various periods for the examination of active substances already on the market two years after the date of notification of the directive, with a view to their possible inclusion in Annex I thereto. Article 8(2) of Directive 91/414 therefore does not deal in the slightest with the prescribing by the Commission of a transitional period after the inclusion of an active substance in Annex I. Second, Article 8(3)(a) of Regulation No 3600/92 provides that, in a draft directive to include an active substance in Annex I to Directive 91/414, the Commission is to set out where appropriate the conditions, including the time-limit, for such inclusion. This provision accordingly concerns certain detailed rules governing the phase of inclusion of an active substance in Annex I to Directive 91/414. It does not reveal an obligation on the Commission to prescribe a transitional period for review of existing national authorisations after the substance’s inclusion. That is all the more true in the present case because the contested directive does not repeal Directive 2005/53, but merely amends Annex I to Directive 91/414 so far as concerns the specification for the substance at issue. The contested directive therefore does not in any way affect the entire procedure for the inclusion of that substance in Annex I to Directive 91/414. It was in the course of that procedure that the applicant had to submit a summary dossier and a complete dossier, in accordance with Article 2 of Commission Regulation (EC) No 933/94 of 27 April 1994 laying down the active substances of plant protection products and designating the rapporteur Member States for the implementation of Regulation No 3600/92 (OJ 1994 L 107, p. 8), as amended by Commission Regulation (EC) No 2230/95 of 21 September 1995 (OJ 1995 L 225, p. 1), and Article 6 of Regulation No 3600/92, as supplemented by Commission Regulation (EC) No 2266/2000 of 12 October 2000 (OJ 2000 L 259, p. 27). At the end of that procedure Directive 2005/53 was adopted, which included the substance in question in Annex I to Directive 91/414 and prescribed a transitional period before its inclusion took effect. In the present case, the inclusion of chlorothalonil in Annex I to Directive 91/414 was thus duly followed by a transitional period allowing the national authorities to examine existing national authorisations. Accordingly, the fact that the contested directive does not prescribe such a transitional period does not constitute a breach of the provisions relied upon by the applicant. As regards, in the second place, the applicant’s argument relating to the Commission’s practice, it is to be noted that a mere administrative practice that is not contrary to the legislation in force and does not involve the exercise of discretion may give rise to a legitimate expectation on the part of the persons concerned (see Case T-310/00 MCI v Commission [2004] ECR II-3253, paragraph 112, and the case-law cited). In the present case, the Commission states that its consistent practice is that it requires the Member States to take certain measures within a period of six months from an active substance’s inclusion in Annex I to Directive 91/414. The Commission’s practice of prescribing such a period in order to permit the parties concerned to prepare themselves to meet the new requirements and the Member States to review existing authorisations is also apparent from recitals 9 and 10 in the preamble to Directive 2005/53. However, such a practice, first, relates above all to the Member States, upon which it confers obligations, in particular as regards the period for review available to them, and second, concerns the initial inclusion of an active substance in Annex I to Directive 91/414. It is accordingly clear that the applicant is also wrong in relying upon the Commission’s practice in order to assert that the Commission was under an obligation to prescribe in the present case a transitional period for the purpose of reviewing existing national authorisations. The practice to which the applicant refers does not concern the case in point. Consequently, in not prescribing a transitional period in the contested directive for the purpose of review of existing national authorisations, the Commission infringed neither Article 8(2) of Directive 91/414 nor Article 8(3)(a) of Regulation No 3600/92 and did not depart from its previous practice. — The alleged breach of the principles of non-retroactivity, legal certainty, the protection of legitimate expectations and equal treatment The principle of legal certainty requires Community rules binding on individuals to be clear and precise so that they may know without ambiguity what their rights and obligations are and are in a position to take steps accordingly (Case 169/80 Gondrand and Garancini [1981] ECR 1931, paragraph 17). Also, as a general rule, the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication, save exceptionally where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (Case 98/78 Racke [1979] ECR 69, paragraph 20; see also, with regard to the retroactive effect of a directive, Case C-331/88 Fedesa and Others [1990] ECR I-4023, paragraph 45). It is accordingly to be established in the present case, first, whether the purpose to be achieved justifies the retroactivity of the contested directive and, second, whether the applicant’s legitimate expectations were duly respected and whether the applicant was able to know without ambiguity what its rights and obligations were and to take steps accordingly. As regards the first condition, it is clear from recitals 1 and 2 in the preamble to the contested directive that the Commission amended the specification for chlorothalonil in order to take account of the new FAO specification, published after Directive 2005/53 was adopted. This FAO specification, repealing the specification which had been in force on the date when Directive 2005/53 was adopted, amended the requirement relating to the HCB content, increasing the limit from 0.01 to 0.04 g/kg. The Commission indicated in recital 4 in the preamble to the contested directive that, ‘since Directive 2005/53 … require[d] Member States to apply its Article 2 from 1 September 2006, the amended specification for chlorothalonil should also apply from this date’. It is apparent from those statements that, in providing that the amended specification was to have retroactive effect, the Commission intended to prevent the Member States from being required to apply, even if only very briefly, the stricter specification prescribed by Directive 2005/53. Given this objective, it had to be laid down that the amended specification for chlorothalonil would be applicable from the date laid down for application of the initial specification. It must therefore be concluded that, in the present case, the first condition laid down by the case-law cited in paragraph 82 above is met, that is to say, the purpose to be achieved demanded that the contested directive provide for retroactive application of the new, less strict, specification. Nor does the applicant challenge the retroactivity of the contested directive in so far as it set a new specification that is less strict. As regards the second condition, namely that the legitimate expectations of those concerned are respected, it should be pointed out at the outset that, since the amended specification laid down by the contested directive had the effect solely of making the conditions upon which chlorothalonil was included less exacting, its retroactive effect, as such, was not capable of interfering with the legitimate expectations of the economic operators concerned. However, the applicant submits that the contested directive infringes the principles of legal certainty and of the protection of legitimate expectations in that it does not set a transitional period enabling the applicant to adapt to the new requirements and entailing an obligation on the Member States to review existing national authorisations. In that regard, it is to be remembered (see paragraphs 70 to 80 above) that neither the applicable provisions nor the Commission’s practice require the Commission to prescribe such a transitional period here. Nor has the applicant adduced evidence or arguments such as to prove that the Commission caused it to entertain legitimate expectations that amendment of the specification would be followed by the establishment of a new transitional period. Inasmuch as the applicant is itself at the origin of that amendment (see paragraphs 23 and 24 above) which reduces the requirements for authorisation of its products, it cannot be contrary to the principles of legal certainty and of the protection of legitimate expectations not to prescribe a transitional period in order to enable the applicant to adapt to the new requirements. Here, any product complying with the specification under Directive 2005/53 meets, a fortiori, the specification under the contested directive, so that adaptation, on the part both of the Member States and of the applicant, to the new requirements does not seem to demand particular measures or efforts justifying a legitimate expectation that a transitional period would be laid down for that purpose. More specifically from the point of view of compliance with the principle of legal certainty, Directive 2005/53 and the clear and precise provisions applicable at the time, which were not repealed by the contested directive, enabled the applicant to know without ambiguity the extent of the obligations which they imposed upon it. It could take steps accordingly and, in particular, if it wished to retain its existing authorisations, submit a complete dossier compiled in accordance with the requirements of Annex II to Directive 91/414. During the transitional period which followed the adoption of Directive 2005/53, it was clearly in the applicant’s interest to submit such a dossier or to demonstrate access to such a dossier in order to be able to retain its existing authorisations. Pursuant to Article 3(1) of Directive 2005/53, the applicant was forewarned that if it did not satisfy that obligation, which is independent of the obligation relating to a product’s conformity to the Community specification, its authorisations would be withdrawn. Secondarily and having more specific regard to the context, it is also apparent from the facts of the case that the applicant was aware of the fact that the Commission was envisaging amending the specification for chlorothalonil to take account of the specification adopted by the FAO in December 2005 and that that amendment would come within the framework of the review conducted in accordance with Article 3(1) of Directive 2005/53. The procedure which preceded the adoption of the contested directive had been initiated on the basis of the information provided by the applicant on 16 December 2005 and the applicant was informed both of the conclusions of the report drawn up by the rapporteur Member State in April 2006, proposing that the specification established by Directive 2005/53 be amended, and of the adoption of the proposal to this effect by the Committee on 13 and 14 July 2006. It is apparent from the letter sent by the authorities of the United Kingdom of Great Britain and Northern Ireland of 28 July 2006 (see paragraph 31 above), adduced by the applicant, and from the letters sent by the authorities of Ireland of 30 August 2006 and the Kingdom of Belgium of 7 September 2006, adduced by the Commission, that the applicant had certain authorisations withdrawn not for want of conformity with the specification for chlorothalonil prescribed by Directive 2005/53, but because it failed to submit a dossier satisfying the requirements of Annex II to Directive 91/414 or demonstrate access to such a dossier. The applicant cannot therefore claim a right to fill the gaps in its dossier in a fresh examination of its authorisations during a fresh transitional period, when it could fully appreciate the interest in submitting a dossier that complied with the requirements of Annex II to Directive 91/414 during the transitional period which followed the adoption of Directive 2005/53. It is to be noted in this regard that the requirements relating to the submission of that dossier remained unchanged. Any dossier compliant with the requirements of Annex II to Directive 91/414 was so under Directive 2005/53 and remained so under the contested directive. As regards both the specification and possession of a compliant dossier, therefore, the Commission had no reason, when adopting the contested directive, either to oblige the Member States to undertake a fresh examination of existing authorisations or to prescribe a transitional period for that purpose. It follows that the retroactive application of the new specification introduced by the contested directive does not infringe the principles of legal certainty and of the protection of legitimate expectations. It should be added that, contrary to the applicant’s assertions, the contested directive is not devoid of practical effect either. It enables existing authorisations for products conforming to the new specification which it introduces to be maintained, provided that the holder of the authorisation has satisfied the other requirements laid down by Directive 2005/53. As regards the principle of equal treatment, this principle is breached only where comparable situations are treated differently or different situations are treated in the same way, unless a distinction is objectively justified (Case C-174/89 Hoche [1990] ECR I-2681, paragraph 25). In the present case, the applicant’s arguments essentially amount to a comparison of different situations. The inclusion of a substance in Annex I to Directive 91/414 is not comparable with mere amendment of the specification for that substance, which has already been included in the annex, and it was thus not obligatory for the contested directive to lay down the same transitional arrangements as Directive 2005/53, which moreover was not repealed. Furthermore, since the applicant could, like other producers, benefit from the transitional period which ensued after the adoption of Directive 2005/53 and thus after the inclusion of chlorothalonil in Annex I to Directive 91/414 and in particular submit, in this context, a dossier that complied with the requirements of Annex II to Directive 91/414 to the national authorities, it cannot plead unequal treatment vis-à-vis other producers of that substance or any other substance at the time of its inclusion in Annex I to that directive. Nor has the applicant shown that transitional periods have been laid down by the Commission in favour of other producers when the specification for a substance already included in Annex I to Directive 91/414 has been amended. Consequently, the Commission did not infringe the principle of equal treatment by not prescribing a transitional period in the contested directive for the purposes of the review of existing authorisations that is provided for in Article 3(1) of Directive 2005/53. It follows that no breach of the general principles of law that are referred to by the applicant can be found. — The alleged breach of the duty to state reasons It is settled case-law that the statement of reasons required by Article 253 EC must disclose in a clear and unequivocal fashion the reasoning followed by the Community authority which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure for the purpose of defending their rights and to enable the Community judicature to exercise its power of review (see Case T-89/00 Europe Chemi-Con (Deutschland) v Council [2002] ECR II-3651, paragraph 65, and the case-law cited). As regards an alleged failure to state reasons that relates to the provision of the contested directive establishing its temporal application, first, recitals 1, 2 and 4 in the preamble to the contested directive, which are cited in paragraphs 84 and 85 above, indicate clearly the reasons why the Commission gave the amended specification retroactive effect. Second, the Commission was not obliged to state the reasons why it did not prescribe a transitional period for the review of national authorisations. As is apparent from the foregoing findings, the Commission was not required to prescribe such a transitional period by the applicable provisions, its previous practice or any of the general principles of law relied upon by the applicant. Accordingly, the applicant is wrong in its contention that the contested directive is vitiated by a failure to state reasons. In view of all the foregoing, this action must be dismissed. Costs 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. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission. On those grounds, THE COURT OF FIRST INSTANCE (Sixth Chamber) hereby: 1. Dismisses the action; 2. Orders Vischim Srl to pay the costs. Meij Dehousse Vadapalas Delivered in open court in Luxembourg on 7 October 2009. [Signatures] ( *1 ) Language of the case: English.

Judgment of the Court (Sixth Chamber) of 16 October 1997. - The Queen v Ministry of Agriculture, Fisheries and Food, ex parte: Benjamin Lay, Donald Gage and David Gage. - Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United Kingdom. - Additional levy on milk - Special reference quantity - Transfer of part of a mixed farm - Apportionment of the quota between transferor and transferee. - Case C-165/95. European Court reports 1997 Page I-05543 Summary Parties Grounds Decision on costs Operative part Keywords Agriculture - Common organization of the markets - Milk and milk products - Additional levy on milk - Allocation of reference quantities exempt from the levy - Producers having suspended deliveries under the system of premiums for non-marketing or conversion - Grant of a special reference quantity - Transfer of part of a mixed holding - Apportionment of the special reference quantity in proportion to the part of the holding given over to milk production at the time when the non-marketing undertaking was entered into (Council Regulations No 1078/77 and No 2055/93, Arts 1(2) and 2) Summary Articles 1(2) and 2 of Regulation No 2055/93, which introduced, under the additional milk levy system, rules for calculating the special reference quantity where part of a holding is transferred, must be interpreted as meaning that, where part of a mixed holding is transferred, the reference quantity must be apportioned between the transferor and transferee, or allocated to the transferee, in proportion to the part of the holding directly or indirectly given over to dairy production at the time when the non-marketing undertaking was entered into pursuant to Regulation No 1078/77, and not in proportion to the total area of the holding. Parties In Case C-165/95, REFERENCE to the Court under Article 177 of the EC Treaty by the High Court of Justice, Queen's Bench Division (United Kingdom), for a preliminary ruling in the proceedings pending before that court between The Queen and Ministry of Agriculture Fisheries and Food, ex parte: Benjamin Lay, Donald Gage and David Gage on the interpretation of Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 of 19 July 1993 allocating a special reference quantity to certain producers of milk and milk products (OJ 1993 L 187, p. 8), THE COURT (Sixth Chamber), composed of: H. Ragnemalm, President of the Chamber, G.F. Mancini and G. Hirsch (Rapporteur), Judges, Advocate General: G. Tesauro, Registrar: L. Hewlett, Administrator, after considering the written observations submitted on behalf of: - Benjamin Lay, Donald Gage and David Gage, by Richard Gordon QC, and Alan MacLean, Barrister, instructed by Dawson & Co., Solicitors, - the United Kingdom Government, by Stephen Braviner, of the Treasury Solicitor's Department, acting as Agent, and Christopher Vajda, Barrister, - the Council of the European Union, by Arthur Brautigam, Legal Adviser, and Jan-Peter Hix, of its Legal Service, acting as Agents, - the Commission of the European Communities, by Dierk Booß, of its Legal Service, acting as Agent, and Hans-Jürgen Rabe and Georg M. Berrisch, Rechtsanwälte, Hamburg, having regard to the Report for the Hearing, after hearing the oral observations of Benjamin Lay, Donald Gage and David Gage, represented by Alan MacLean, Barrister, the United Kingdom Government, represented by Stephanie Ridley, of the Treasury Solicitor's Department, acting as Agent, and Christopher Vajda, Barrister, the Council, represented by Jan-Peter Hix, and the Commission, represented by Hans-Jürgen Rabe, at the hearing on 13 March 1997, after hearing the Opinion of the Advocate General at the sitting on 29 April 1997, gives the following Judgment Grounds 1 By order of 26 April 1995, received at the Court on 30 May 1995, the High Court of Justice, Queen's Bench Division, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty three questions on the interpretation of Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 of 19 July 1993 allocating a special reference quantity to certain producers of milk and milk products (OJ 1993 L 187, p. 8). 2 Those questions were raised in proceedings between, first, Benjamin Lay, and, second, Donald Gage and David Gage, all of them milk producers (`the applicants in the main proceedings') and the Ministry of Agriculture, Fisheries and Food (`MAFF') concerning a special reference quantity which they requested after purchasing, in Mr Lay's case, or leasing, in the case of Donald and David Gage, part of a holding subject to an undertaking not to market milk under Council Regulation (EEC) No 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds (OJ 1977 L 131, p. 1). 3 During 1982 Mr Lay purchased Resthill Farm which, together with another farm, constituted a single holding belonging to a Mr Holton. 4 In October 1984 Donald and David Gage obtained a tenancy of Court Farm which, with two other farms, formed a single holding owned by A.J. Combes & Son Ltd. 5 Under Regulation No 1078/77, the original owners, Mr Holton and A.J. Combes & Son Ltd, had entered into an undertaking not to market milk for a period of five years in consideration for a non-marketing premium. Whilst Mr Holton had entered into that undertaking in 1980, the undertaking of A.J. Combes & Son Ltd expired at the end of September 1985. 6 When the applicants in the main proceedings concluded their respective purchase and lease, they entered into corresponding undertakings in respect of the parts of the holdings transferred to them, without obtaining a non-marketing premium in return. Their intention at that time was to operate a herd of 50 cows once the non-marketing undertaking had come to an end. 7 In 1984, on account of a persistent imbalance between supply and demand in the milk sector, a system of additional levies was introduced by Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (OJ 1984 L 90, p. 10), and Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13). In accordance with Article 5c of Regulation (EEC) No 804/68 of the Council of 27 June 1968 (OJ, English Special Edition 1968 (I), p. 176), as amended by Regulation No 856/84, an additional levy is payable for quantities of milk in excess of a reference quantity to be determined, on the basis either of the quantity of milk or milk equivalent delivered by a producer (Formula A) or of the quantity bought by a purchaser during a reference year (Formula B). 8 Since they had entered the temporary non-marketing scheme under Regulation No 1078/77 and therefore produced no milk during the reference year, the applicants in the main proceedings - who were accordingly `SLOM producers' - for that reason did not obtain reference quantities under the additional levy scheme. 9 In its judgments in Case 120/86 Mulder v Minister van Landbouw en Visserij [1988] ECR 2321 and Case 170/86 Von Deetzen v Hauptzollamt Hamburg-Jonas [1988] ECR 2355, the Court ruled that Regulation No 857/84 was invalid in so far as it did not provide for the allocation of a reference quantity to SLOM producers. 10 Consequently, Council Regulation (EEC) No 764/89 of 20 March 1989 amending Regulation No 857/84 (OJ 1989 L 84, p. 2) inserted a new Article 3a in that regulation providing for the allocation of special reference quantities to SLOM producers on certain conditions. 11 The adoption of Regulation No 764/89 also entailed the adoption of Commission Regulation (EEC) No 1033/89 of 20 April 1989 amending Regulation (EEC) No 1546/88 laying down detailed rules for the application of the additional levy referred to in Article 5c of Council Regulation (EEC) No 804/68 (OJ 1989 L 110, p. 27); Commission Regulation (EEC) No 1546/88 of 3 June 1988 (OJ 1988 L 139, p. 12) had been adopted to replace Commission Regulation (EEC) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1984 L 132, p. 11), in order to give effect to Regulation No 857/84. 12 As a result of the judgments in Case C-189/89 Spagl v Hauptzollamt Rosenheim [1990] ECR I-4539 and Case C-217/89 Pastätter v Hauptzollamt Bad Reichenhall [1990] ECR I-4585, Article 3a(2) of Regulation No 857/84 was amended by Council Regulation (EEC) No 1639/91 of 13 June 1991 (OJ 1991 L 150, p. 35) in order to allocate a special reference quantity higher than the original ceiling of 60% of the quantity of milk delivered or of the quantity of milk equivalent sold by the producer during the 12 calendar months preceding the month in which the application for the non-marketing premium was made. 13 As from 1 April 1993 Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1) renewed, with some amendments, the additional levy scheme introduced by Regulations No 856/84 and No 857/84, which had in the meantime reached its term. 14 In its judgment in Case C-81/91 Twijnstra v Minister van Landbouw, Natuurbeheer en Visserij [1993] ECR I-2455 the Court ruled that the third subparagraph of Article 3a(2) of Council Regulation No 857/84 of 31 March 1984, as amended by Council Regulation No 764/89 of 20 March 1989, must be interpreted as meaning that, in the event of the transfer of part of a holding where the transferee agrees to observe the non-marketing undertaking made by the transferor under Council Regulation No 1078/77, the special reference quantity may be divided between the transferor and the transferee on the basis of the proportion of the land transferred. 15 As a result of that judgment, Regulation No 2055/93, which is central to this action, introduced inter alia rules for calculating the special reference quantity where part of a holding is transferred. 16 Those were the relevant provisions when the applicants in the main proceedings requested, in 1993 and 1994 respectively, the grant of special reference quantities. Thus, on 24 December 1993 Mr Lay was granted a special reference quantity of 73 871 litres of milk corresponding, according to what he has said, to the milk produced by 14 cows. Similarly, on 26 May 1994, after their request had been reconsidered, Donald and David Gage were allocated a reference quantity of 14 725 litres. 17 In both cases MAFF calculated the special reference quantities according to the ratio between the area purchased or leased and the total area of each holding. 18 The applicants in the main proceedings did not dispute the accuracy of the calculation, but challenged the decisions before the High Court of Justice on the ground that MAFF had misinterpreted the term `areas under forage' used in Articles 1(2) and 2 of Regulation No 2055/93. In their view MAFF had determined the special reference quantity without taking account of the fact that the original owners had carried on the rearing of cattle for milk production almost exclusively in the part of the holdings transferred to the applicants. 19 With regard to the apportionment of an already allocated special reference quantity where part of a holding is transferred, Article 1(2) of Regulation No 2055/93 provides: `2. Where, in the case of a holding part of which has been taken over while the holding was subject to Regulation (EEC) No 1078/77, a reference quantity has been allocated pursuant to Article 3a of Regulation (EEC) No 857/84 on the basis of the quantity for which the premium entitlement pursuant to Regulation (EEC) No 1078/77 has been preserved or acquired, that reference quantity shall be shared between the transferor and the part transferee: ... - in proportion to the areas under forage referred to in Article 1 (1) (d) of Regulation (EEC) No 1391/78 and transferred in accordance with the provisions of Article 7 of Regulation (EEC) No 3950/92. ...'. 20 Where a special reference quantity has not yet been allocated, such a quantity is granted to the transferee in accordance with the rules laid down in Article 1(1) and the first paragraph of Article 2 of Regulation No 2055/93. 21 Article 1(1) of Regulation No 2055/93 provides: `1. A producer, within the meaning of Article 9(c) of Regulation (EEC) No 3950/92, who: ... - has taken over part of a holding subject to the (...) provisions [of Regulation No 1078/77] but for which no reference quantity has been allocated pursuant to Article 3a of Regulation (EEC) No 857/84, shall receive a special reference quantity on request, provided that: - ...'. 22 The first paragraph of Article 2 of that regulation provides: `The special reference quantity referred to in Article 1 (1) shall be established by the Member State in accordance with objective criteria in proportion to the area under forage referred to in Article 1 (1) (d) of Regulation (EEC) No 1391/78 which the producer was using on the date of his application and on the basis of the quantity in respect of which the premium was calculated, less a percentage representing all the reductions applied to the reference quantities fixed pursuant to Article 2 of Regulation (EEC) No 857/84, including in all cases a basic reduction of 4,5 %, or to Article 6 of that Regulation. ...' 23 Article 1(1)(d) of Commission Regulation (EEC) No 1391/78 of 23 June 1978 laying down amended rules for the application of the system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds (OJ 1978 L 167, p. 45), to which the above provisions refer, contains the following definition: `(d) "area under forage" means the total agricultural area farmed by a producer within the meaning of Article 5 (a) of Regulation (EEC) no 1078/77'. 24 The producer mentioned in the provision cited in the foregoing paragraph is defined in Article 5(a) of Regulation No 1078/77 as follows: `(a) "producer" shall mean: - a farmer, whether a natural or a legal person, whose holding is located in the territory of the community and who raises cattle, ...'. 25 Article 7(1) of Regulation No 3950/92, to which Article 1(2) of Regulation No 2055/93 refers, provides: `1. Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by inheritance to the producers taking it over in accordance with detailed rules to be determined by the Member States taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties ... ...'. 26 Article 9(c) of the same regulation adds: `For the purposes of this regulation: (c) "producer" means a natural or legal person or a group of natural or legal persons farming a holding within the geographical territory of the Community: - selling milk or other milk products directly to the consumer, - and/or supplying the purchaser'. 27 Considering that the decision in the case in the main proceedings depended on interpretation of the provisions cited above and on an assessment of their validity, the High Court of Justice, Queen's Bench Division, stayed proceedings and referred the following three questions to the Court for a preliminary ruling: `(1) In determining a part transferee's entitlement to a reference quantity under Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93, must a Member State, having regard to Regulation No 2055/93 and the general principles of Community law on legitimate expectation, proportionality and respect for property, apportion the reference quantity between transferor and part transferee by ascertaining what proportion of the holding was used for milk production at the time the transferor entered into the non-marketing undertaking and then apportioning the reference quantity between the transferor and transferee in proportion to the percentage of land used for milk production transferred to the part transferee? (2) If the answer to Question 1 is in the negative, are Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 invalid as contravening the general principles of Community law on legitimate expectation, proportionality and respect for property? (3) If the answers to Questions 1 and 2 are in the negative, in determining a part transferee's entitlement to a reference quantity under Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 is a Member State entitled to apportion the reference quantity between transferor and part transferee in proportion to that part of the transferor's holding transferred to the transferee?' Interpretation of Articles 1(2) and 2 of Regulation No 2055/93 (Questions 1 and 3) 28 By its first and third questions, which it is appropriate to deal with together, the national court is in substance asking whether, on a proper construction of Articles 1(2) and 2 of Regulation No 2055/93, and in particular the term `areas under forage' which appears in those provisions, where part of a mixed holding is transferred, the special reference quantity must be apportioned between the transferor and transferee, or allocated to the transferee, in proportion to the part of the holding directly or indirectly given over to dairy production at the time when the non-marketing undertaking was entered into pursuant to Regulation No 1078/77, or whether that quantity must be apportioned, or allocated, in proportion to the total area of the holding. 29 By virtue of Regulation No 2055/93, where part of a holding is transferred, the transferee is allocated a special reference quantity which is either shared, in accordance with Article 1(1) of the regulation, between him and the transferor in proportion to the areas under forage or allocated to him, in accordance with the first paragraph of Article 2, in conjunction with Article 1(1), again in proportion to the area under forage; in either case, the definition of area under forage is that contained in Article 1(1)(d) of Regulation No 1391/78. 30 The United Kingdom Government, the Council and the Commission take the term `areas under forage', as used in that provision, to mean the total area belonging to a holding even if only part of that area is actually used for milk production. Consequently, the special reference quantity to be allocated to a transferee is calculated in terms of the ratio of the land transferred to the total area of land belonging to the holding. 31 By contrast, the applicants in the main proceedings consider that for the purposes of the provision cited above areas under forage are confined to those parts of the holding given over to dairy production, excluding areas used for other agricultural purposes. 32 It should be borne in mind that, as the fourth and sixth recitals in the preamble indicate, Regulation No 2055/93 was adopted `in order to take fully into account the decisions of the Court of Justice', in particular the judgment in Twijnstra. 33 At paragraph 25 of that judgment the Court held that the entire system of reference quantities is based on the general principle, laid down in Article 7 of Regulation No 857/84 and in Article 5 of Commission Regulation (EEC) No 1371/84, that in the case of the transfer of part of a holding the reference quantity is to be granted to the transferee in proportion to the land transferred. 34 However, in Twijnstra the general principle that a reference quantity is attached to the land, as expressed in particular in Case C-463/93 St. Martinus Elten [1997] ECR I-255, paragraph 14, was formulated in relation only to the transfer of part of a holding all of which was given over to dairy production. Accordingly that judgment did not deal with the case, such as that in point in the main proceedings, where part of a mixed holding is transferred. 35 It should be noted that where part of a holding is transferred Article 7(1) of Regulation No 3950/92 and Article 7 of Regulation No 1546/88, which repeat the general principle laid down in Article 7 of Regulation No 857/84 and Article 5 of Regulation No 1371/84, provide for the transfer of part of milk quotas on the basis of or `taking account of the areas used for dairy production or other objective criteria'. 36 It follows from the wording of those provisions that by linking the reference quantities strictly to the areas used for dairy production every producer resuming milk production in the capacity of transferee or transferor is guaranteed to be able to produce the proportion of the milk quantity corresponding to the proportion of the land originally given over to dairy production which he has acquired or retained. 37 That literal interpretation is in keeping with the purpose of the abovementioned provisions, namely to protect the legitimate expectations on which the transferee may rely. Since the transferee has acquired part of a holding previously used for milk production and has assumed the non-marketing undertaking, he may legitimately expect to be able to re-use the land transferred for the purpose of milk production (see, to that effect, Twijnstra, cited above, paragraph 23. 38 In consequence, where part of a mixed holding is transferred, if transferees are not, in the event of a part transfer of a mixed holding, to be denied the benefit of the general principle that the reference quantity runs with the land, a special reference quantity must be allocated on the basis of the areas used for milk production at the time when the non-marketing premium was granted. 39 In its judgment in Case C-79/91 Knüfer [1992] ECR I-6895, paragraph 12, the Court made it clear in that respect that the reference quantities are to be distributed strictly in proportion to the size of the respective areas of the holding which are used for milk production, without its being possible to make any distinction according to the nature of the use to which those areas are put. 40 In paragraph 13 of the same judgment the Court added that, for the purpose of distributing the reference quantities, all the surface areas of the holding which contribute directly or indirectly to the milk production thereof must be taken into consideration. 41 The wording of the first paragraph of Article 2 of Regulation No 2055/93, adopted to give effect to the judgment in Twijnstra, does not contradict that interpretation: indeed, it confirms it. 42 It shows that special reference quantities are to be allocated in proportion to the areas under forage referred to in Article 1(1)(d) of Regulation No 1391/78, which was adopted in order to implement the non-marketing premium scheme and defines that term as the total agricultural area farmed by a producer within the meaning of Article 5(a) of Regulation No 1078/77. 43 Thus the term `areas under forage' merely denotes the total agricultural area which is farmed by a person having the status of producer within the meaning of Article 5(a) of Regulation No 1078/77. A farmer can have that status only if he raises cattle, as specified in that provision, and, still more specifically, in the context of the allocation of a special reference quantity, only where he sells or delivers milk as a producer within the meaning of Article 9(c) of Regulation No 3950/92, to which Article 1(1) of Regulation No 2055/93 refers. 44 That interpretation is further borne out by the fact that Article 1(2) of Regulation No 2055/93 refers to Article 7 of Regulation No 3950/92 which provides that when a holding is transferred, the reference quantity is to be transferred taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties. Thus, as the Advocate General points out in section 11 of his Opinion, so far as concerns the requirement to take account of the areas used for dairy production, the transfer of a reference quantity where a holding is transferred and the transfer of part of a special reference quantity where part of a holding is transferred are treated on the same footing. 45 The first objection raised by the United Kingdom Government, the Council and the Commission is that it is impossible to apply such an interpretation on the ground that MAFF has no information enabling it to determine which parts of a holding were used for dairy production. 46 In that regard, it must be stressed that, as the Advocate General rightly observed in section 15 of his Opinion, any administrative and verification problems, where they exist, cannot as a matter of principle be an obstacle to the sole interpretation compatible with the general principles governing Community law, in particular the principle of the protection of legitimate expectations. 47 Furthermore, by virtue of Articles 4(2)(d) and 5(1)(d) of Regulation No 1391/78, `the area under forage farmed by the producer at the time of lodging of the application' for grant of the non-marketing premium must be both stated in the application and registered by the competent authority. Moreover, the use of the various areas of land as areas under forage given over to dairy production may be established by any means of proof. 48 Second, the United Kingdom Government, the Council and the Commission maintain that a restrictive interpretation of the concept of areas under forage as confined to those areas used for dairy production, offends against the principle of legal certainty. 49 It is true that, where part of a mixed holding is transferred, the interpretation suggested by the United Kingdom Government, the Council and the Commission enables the special reference quantities to which the transferee is entitled to be fixed unequivocally, thus precluding in advance, so far as is possible, any dispute as to the use of the agricultural areas farmed at the beginning of the non-marketing period. 50 None the less, in the light of the foregoing considerations, the mere possibility that the parties might disagree as to the areas to be taken into account when calculating the special reference quantities cannot justify an interpretation which is contrary to the principle of the protection of legitimate expectations. 51 Third, the Council and the Commission submit that the interpretation adopted is not capable of reconciling the interests of the transferor and transferee, on the one hand, and the objectives pursued by the additional levy system, on the other. 52 In response to that argument, it must be observed that the method of allocation or apportionment resulting from this judgment enables those who, in their capacity as transferors and transferees, hold lands of a farm which were originally given over to dairy production to resume milk production to the extent to which those lands contributed to dairy production. In contrast, the holder of the lands, whether transferor or transferee, is barred from entitlement to a reference quantity in so far as they were not originally used for dairy production. 53 Accordingly, the interpretation adopted by the Court does not create the risk either of causing the total quantity to be exceeded to which the owner would have been entitled if he had not transferred part of his holding or of undermining the objectives of the levy system, whether by allowing, following the transfer of part of such a quantity, land which has never been used for milk production to be turned into areas under forage used for milk production, or encouraging the separate marketing of individual special reference quantities. 54 In the light of the foregoing considerations, the answer to be given to the first and third questions must be that, on a proper construction of Articles 1(2) and 2 of Regulation No 2055/93, where part of a mixed holding is transferred, the reference quantity must be apportioned between the transferor and transferee, or allocated to the transferee, in proportion to the part of the holding directly or indirectly given over to dairy production at the time when the non-marketing undertaking was entered into pursuant to Regulation No 1078/77. The validity of Articles 1(2) and 2 of Regulation No 2055/93 (Question 2) 55 Having regard to the answer given to the first and third questions, there is no need to reply to the second question. Decision on costs Costs 56 The costs incurred by the United Kingdom Government, by the Council of the European Union and by 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 proceedings 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 questions referred to it by the High Court of Justice, Queen's Bench Division, by order of 26 April 1995, hereby rules: On a proper construction of Articles 1(2) and 2 of Council Regulation (EEC) No 2055/93 of 19 July 1993 allocating a special reference quantity to certain producers of milk and milk products, where part of a mixed holding is transferred, the reference quantity must be apportioned between the transferor and transferee, or allocated to the transferee, in proportion to the part of the holding directly or indirectly given over to dairy production at the time when the non-marketing undertaking was entered into pursuant to Council Regulation (EEC) No 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds.

Jayachandra Reddy, J. This is an appeal under Section 2 a of the Supreme Court Enlargement of Criminal Appellate Jurisdiction Act read with Section 379 Cr.P.C. The five appellants original accused Nos. 1, 2, 3, 4 and 5 were tried alongwith four others for offences punishable under Sections 148, 302/149, 324 and 323 read with 149 I.P.C. for the alleged murder of one Vinod Sagar, the deceased in the case and for causing injuries to P.Ws.l and 4 during the same occurrence. The trial Court acquitted all of them. The State preferred an appeal and the High Court allowed the same in respect of these appellants and companyvicted and sentenced each of them to undergo imprisonment for life and other lesser terms of imprisonment for other offences and companyfirmed the acquittal of the remaining four accused, the prosecution case is as follows The deceased, Vinod Sagar, was an Excise Contractor. For the year 1978-79 the deceased alongwith P.W.4 and two others had obtained the licence in respect of Ramanathapur arrack shop. In companynection with that business, he and P.W.4 used to visit the shop every evening and remain there till the shop was closed looking into the accounts and then take away the cash. P.Ws. 1 to 3 and two other persons were the employees in the arrack shop. The father of A-8 was a licencee in respect of an adjoining arrack shop at Uppal at a distance of four kilometres. A-1 and A-7 are the companysins of A-8 having an interest in that arrack shop at Uppal. A-2 to A-6 and A-9 are said to be the associates of a0-1, A-7 and A-8. According to the prosecution there were some ill-feelings between the accused and the deceased. On the day of occurrence namely 29.10.78 at about 6.30 P.M. the deceased was going to his shop in a car and A-1 was going on a motor-cycle from Uppal. When the deceased was taking a turn to reach his shop,, his car struck the motor-cycle upon which A-1 was travelling and knocked down the motor-cycle and A-1 and this led to a quarrel and deceased and A-1 abused each other. A-1, however, picked up his motor-cycle and went away towards Hyderabad hurling threats. Later in the night at about 10 Oclock while the deceased, P.W.4 and their employees P.Ws., 1 to 3 and others were at their shop, A-1 to A-9 came there in an auto-rikshaw and on two motorcycles armed with knives and other weapons and attacked the deceased. A-2 first caused a bleeding injury on the right cheek of the deceased with a barbers razor whereupon the deceased ran into the shop and entered the hall. Then all the accused chased him and A-4 stabbed the deceased in the back with a knife. The deceased on receipt of the injury ran into the adjoining room but before he companyld bolt the door of the room, he was dragged out by the accused and A-4 again stabbed him and the other accused are alleged to have caused various injuries with the weapons in their hands. When P.Ws. 1 and 4 and another employee intervened, they were also beaten up. The accused then left the place. Thereafter P.Ws. 1 and 4 and another person took the deceased, who was still alive to Osmania General Hospital in the car. The Doctor, who examined him, declared him to be dead. P.Ws. 4 then asked P.W.1 to go to Uppal Police Station and report the matter P.W.1 accordingly went in an auto-rickshaw to Uppal Police Station and gave the report Ex.P.l which was reduced into writing by P.W.10, S.I. who sent P.W.1 to the Hospital for examination and treatment of his injuries. P.W.10 went to the scene of occurrence, prepared an observation report, held the inquest over the dead body and examined the material witnesses. The Doctor, P.W.7, who companyducted the post-mortem, found as many as 9 injuries on the dead body of the deceased. Most of them were incised wounds and on internal examination he found that injury No.9, a spindle shaped one, passed through the inter-coastal space and the upper lobe of the lungs and companymunicated with the left bronchus. He opined that all the injuries were ante-mortem and injury No.9 by itself was sufficient in the ordinary companyrse of nature to cause death P.W 1 was examined by another Doctor, P.W.6 who found on him a fresh incised wound and a swelling over the left knee and a companytusion on the scalp. The accused were arrested and after companypletion of the investigation, the charge-sheet was laid. The prosecution mainly relied on the evidence of P.Ws. 1 to 4, the eye-witnesses and the plea of the accused was one of denial. The learned Sessions Judge examined the case with reference to A-1 to A-5 and A-6 to A-9 separately. A-6 to A-9 were acquitted mainly on the ground that their names were number mentioned in Ex.P.I or in the statements recorded during the inquest. So far as A-1 to A-5 were companycerned, the learned Sessions Judge referred to certain companyrections in Ex.P.3, the wound certificate regarding injuries on P.W 1 issued by P.W.6 and also doubted the possibility of P.W 1 having given Ex.P.I. He disbelieved the evidence of the eyewitnesses as against A-1 to A-5 mainly on the ground that the names of these accused were number mentioned to the Doctor before whom the deceased was brought and that in Ex.P.3 the word unknown in the sentence alleged to have been beaten with sticks and knives by unknown people at 11.15 P.M. was companyrected to known. The learned Sessions Judge also observed that earlier statements recorded under Section 161 Cr.P.C. were suppressed. He also pointed certain improvements in the testimonies of P.Ws. 1 to 4 and ultimately gave the benefit of doubt to A-1 to A-5 also. The High Court after a detailed discussion on the evidence of the eye-witnesses observed that the so-called improvements pointed out by the learned Sessions Judge are number at all material and they do number affect the veracity of these witnesses. Regarding the companyrection of the word unknown to known in Ex.P.3 the High Court pointed out that it is number at all significant and on that basis the evidence of P.Ws. 1 to 4 particularly the evidence of the injured witness can number be discarded. The High Court also observed that Ex.P.l was promptly given and it companytains the names of the five appellants. Ultimately the High Court held that the prosecution has established its case against these five appellants. 4. learned Counsel appearing for the appellants submitted before us that the view taken by the trial Court is number at all unreasonable and the infirmities pointed out by the learned Sessions Judge are of vital importance and that the High Court erred in companying to a different companyclusion. Since this is a regular appeal we have heard the learned Counsel at length and have gone through the evidence of P.Ws. 1 to 4 carefully and also other material aspects. It is a case where because of an earlier incident during which the car of the deceased knocked down A-1s motor-cycle, led to the attack on the deceased on the same night in his arrack shop. The presence of P.Ws. 1 to 4 at the scene of occurrence is natural.P.W.1who is an injured witness and P.W.4 who is also a relation of the deceased took prompt steps to shift the deceased to the hospital P.W 1 was also examined for his injuries. Naturally he was number expected to give a report to the Doctor. The casual way of filling up the companyumn in the medical certificate does number in any manner amount to recording a statement of the injured witness. Further P.W. 1 has given Ex.P.l to P.W 10 at the earliest moment. In Ex.P.l all the necessary details are given. It is specifically mentioned that at about 11.15 P.M. A-1 to A-5 and five others came to the arrack shop and attacked the deceased. The names of the other eye-witnesses are also mentioned. A reading of Ex.P.l would show that it companytains a true and natural version of the incident. Having examined the record we are satisfied that P.Ws. 1 to 4 were present in the arrack shop when the occurrence took place and therefore their evidence is of utmost importance. Their evidence is companysistent on all material aspects P.W 1 was working as an arrack vendor in the shop of the deceased. He deposed that he alongwith P.Ws. 2 and 3 and two others used to work in the shop and on the day of occurrence the deceased companying in his car accidently struck the motor-cycle on which A-1 was travelling and that led to a quarrel and exchange of abuses. Coming to the occurrence, he deposed that later in the night after deceased and P.W.4 verified the accounts and companylected the cash and when they were about to go, the accused came armed. A-1 said that the deceased knocked his motor cycle and abused him. P.W 2 told them that they should number rake up the matter which has taken place earlier. A-4 pushed aside him. A-2 then caused a bleeding injury on the right cheek of the deceased. The deceased ran inside the shop but the accused followed him and A-4 among them stabbed the deceased with a knife in the back and the deceased then ran in the adjoining room but he was dragged and A-4 again stabbed him with the knife on the chest. Then in a general wayP.W.1deposed that all the accused beat the deceased and that he was also beaten by some of the accused on his right hand, left knee and the head but he does number remember as to who caused those injuries to him P.W 1 further deposed that P.W.4 and another worker also intervened and they were also beaten. Thereafter the accused left the scene of occurrence. He also stated that he and P.W.4 took the injured to Osmania General Hospital and the Doctor pronounced him to be dead. Thereafter he went to the Uppal Police Station and gave Ex.P.l. He, however, explained by saying that P.W.10, S.I. who recorded the statement asked only the names of some of the accused and accordingly he mentioned that A-1 to A-5 alongwith five others participated in the occurrence. The evidence of P.Ws. 2 to 4 regarding the occurrence is more or less to the same effect. The presence of P.W.1 at the scene of occurrence thus is fully established and his evidence is companyroborated by the medical evidence also. It is significant to numbere that during the inquest P.Ws. 1, 2 and 4 were examined and in the relevant companyumn the names of A-1 to A-5 alongwith five others are mentioned as assailants. Ex.P.6, the post-mortem certificate companypled with the evidence of P.W.7 shows that the injuries on the deceased must have been inflicted in the manner stated by the witnesses and there is absolutely numberscope to doubt the presence of these witnesses and when the accused particularly A-1 to A-5 are known to them, the so-called companyrection in Ex.P.3 is absolutely of numberrelevance. 6. learned Counsel, however, submitted that P.Ws. 1 to 4 in their testimonies have also given the names of A-6 to A-9 having participated in the occurrence. However, in Ex.P.l their names are number mentioned except stating that A-1 to A-5 alongwith five others in a body came to the arrack shop. Since the names of A-6 to A-9 though known were number mentioned byP.W.1in Ex.P.l the companyrts below rightly gave the benefit of doubt to them but that can number be a ground to doubt the veracity of P.Ws. 1 to 4 regarding the presence and participation of the appellants. We have also scrutinised the answers elicited in the cross-examinations of these witnesses and we do number find anything significant which affects their veracity. However, it is a case where according to P.Ws. 1 to 4, 9 assailants entered the arrack shop.P.W.1the principal witness, as stated above, attributed specific overt acts only to A-1, A-2 and A-4. No overt acts were attributed to A-3 and A-5 except making an omnibus allegation that all the nine accused beat the deceased. As numbered above there were some incised injuries on the deceased but only injury No.9 was the fatal one. Both the companyrts below acquitted A-6 to A-9 on the ground that their names were number mentioned in Ex.P.l and companyvicted the appellants mainly on the ground that their names were mentioned in Ex.P.l. P.Ws 1 to 4 deposed that all the nine accused entered the shop and that among them A-1 first instigated and A-2 and A-4 only inflicted injuries. In this state of affairs, we think it will be safe to companyvict only A-1, A-2 and A-4 to whom specific overt acts are attributed and whose participation in the attack on the deceased is established by companyent and reliable evidence. A-1 is the principal accused who led others to the arrack shop of the deceased for the purpose of attacking the deceased and A-2 and A-4 actually attacked the deceased and inflicted incised wounds. Thus their case stands on a stronger footing and their guilt is established beyond all reasonable doubt. Though all the five appellants are companyvicted under Sections 302/49 I.P.C., we under the above circumstances, alter the companyvictions of A-1, A-2 and A-4 to one under Sections 302/34 I.P.C. and maintain the sentence of imprisonment for life.

THIRD SECTION CASE OF BENDIČ v. SLOVENIA (Application no. 77519/01) JUDGMENT STRASBOURG 1 June 2006 FINAL 01/09/2006 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 Bendič v. Slovenia, The European Court of Human Rights (Third Section), sitting as a Chamber composed of: MrJ. Hedigan, President,MrB.M. Zupančič,MrL. Caflisch, MrV. Zagrebelsky,MrE. Myjer,MrDavid Thór Björgvinsson,MrsI. Ziemele, judges,and Mr V. Berger, Section Registrar, Having deliberated in private on 11 May 2006, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 77519/01) against the Republic of Slovenia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a national of Serbia and Montenegro, Mr Vukašin Bendič (“the applicant”), on 20 June 2001. 2. The applicant was represented by the Verstovšek lawyers. The Slovenian Government (“the Government”) were represented by their Agent, Mr L. Bembič, State Attorney-General. 3. The applicant alleged under Article 6 § 1 of the Convention that the length of the proceedings before the domestic courts to which he was a party was excessive. In substance, he also complained about the lack of an effective domestic remedy in respect of the excessive length of the proceedings (Article 13 of the Convention). 4. On 16 September 2003 the Court decided to communicate the complaints concerning the length of the proceedings and the lack of remedies in that respect to the Government. Applying Article 29 § 3 of the Convention, it decided to rule on the admissibility and merits of the application at the same time. 5. In accordance with Article 36 § 1 of the Convention and Rule 44 of the Rules of Court, the Registrar informed the Government of Serbia and Montenegro of their right to submit written comments. On 14 February 2006 the Government of Serbia and Montenegro informed the Court that they did not wish to exercise their right to intervene in the instant case. THE FACTS 6. The applicant was born in 1954 and lives in Velenje. 7. On 22 March 1994 and 11 February 1995 the applicant was injured while working for the Slovenian employer GVV in Russia. He consequently instituted two sets of civil proceedings in the Celje District Court (Okrožno sodišče v Celju) seeking damages for the injuries sustained. In both proceedings an insurance company ZT was acting as an intervening party. First set of proceedings 8. On 21 January 1997 the applicant instituted civil proceedings against GVV seeking damages in the amount of 2,050,000 tolars (approximately 8,550 euros) for the injuries sustained on 22 March 1994. Between 23 July 1998 and 26 February 2001 the applicant lodged eight written submissions and/or adduced evidence. Between 24 November 1997 and 3 November 1999 he made three requests that a date be set for a hearing. Of the ten hearings held between 23 April 1998 and 27 February 2001, one was adjourned due to the absence of both parties and one was adjourned due to the absence of the applicant During the proceedings the court appointed a medical expert. At the last hearing the court decided to deliver a written judgment. The judgment, upholding the applicant’s claim in part, was served on the applicant on 19 April 2001. 9. On 26 April 2001 the applicant appealed to the Celje Higher Court (Višje sodišče v Celju). GVV cross-appealed. On 10 October 2002 the court dismissed both appeals. The judgment was served on the applicant on 28 October 2002. 10. On 15 November 2002 the applicant lodged an appeal on points of law with the Supreme Court (Vrhovno sodišče). On 19 February 2004 the court dismissed the applicant’s appeal. The judgment was served on the applicant on 22 March 2004. Second set of proceedings 11. On 9 June 1997 the applicant instituted civil proceedings against GVV seeking damages in the amount of 2,056,616 tolars (approximately 8,570 euros) for the injuries sustained on 11 February 1995. Between 12 March 1998 and 25 September 2001 the applicant lodged nine preliminary written submissions and/or adduced evidence. Between 12 November 1997 and 12 November 1999 he made five requests that a date be set for a hearing. Of the five hearings held between 11 January 2000 and 23 October 2001 none was adjourned at the request of the applicant. During the proceedings the court appointed a medical expert. The court also sought an additional opinion from the appointed expert At the last hearing the court decided to deliver a written judgment. The judgment, upholding the applicant’s claim in part, was served on the applicant on 14 January 2002. 12. On 15 January 2002 the applicant appealed to the Celje Higher Court. On 12 March 2003 the court allowed the applicant’s appeal in part and increased the damages awarded. The judgment was served on the applicant on 5 June 2003. 13. On 12 June 2003 the applicant lodged an appeal on points of law with the Supreme Court (Vrhovno sodišče). On 9 December 2004 the court dismissed the applicant’s appeal. The judgment was served on the applicant on 13 January 2005. THE LAW I. ALLEGED VIOLATION OF ARTICLES 6 § 1 AND 13 OF THE CONVENTION 14. The applicant complained about the excessive length of the proceedings. He relied on Article 6 § 1 of the Convention, which reads as follows: “In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...” 15. In substance, the applicant further complained that the remedies available for excessive legal proceedings in Slovenia were ineffective. Article 13 of the Convention reads 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. Admissibility 16. The Government pleaded non-exhaustion of domestic remedies. 17. The applicant contested that argument, claiming that the remedies available were not effective. 18. The Court notes that the present application is similar to the cases of Belinger and Lukenda (Belinger v. Slovenia (dec.), no. 42320/98, 2 October 2001, and Lukenda v. Slovenia, no. 23032/02, 6 October 2005). In those cases the Court dismissed the Government’s objection of non-exhaustion of domestic remedies because it found that the legal remedies at the applicant’s disposal were ineffective. The Court recalls its findings in the Lukenda judgment that the violation of the right to a trial within a reasonable time is a systemic problem resulting from inadequate legislation and inefficiency in the administration of justice. 19. As regards the instant case, the Court finds that the Government have not submitted any convincing arguments which would require the Court to distinguish it from its established case-law. 20. The Court further notes that the application 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. Article 6 § 1 21. As regards the first set of the proceedings, the period to be taken into consideration began on 21 January 1997, the day the applicant lodged his first claim with the Celje District Court, and ended on 22 March 2004, when the Supreme Court’s judgment was served on the applicant. It thus lasted for about seven years and two months for three levels of jurisdiction. As to the second set of the proceedings, the relevant period began on 9 June 1997, when the applicant lodged his second claim with the Celje District Court, and ended on 13 January 2005, when the Supreme Court’s judgment was served on the applicant. The relevant period has therefore in this case lasted about seven years and seven months for three levels of jurisdiction. 22. The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII). 23. Having examined all the material submitted to it, and having regard to its case-law on the subject, the Court considers that in the instant case the length of both sets of the proceedings was excessive and failed to meet the “reasonable-time” requirement. There has accordingly been a breach of Article 6 § 1. 2. Article 13 24. The Court reiterates that Article 13 guarantees an effective remedy before a national authority for an alleged breach of the requirement under Article 6 § 1 to hear a case within a reasonable time (see Kudła v. Poland [GC], no. 30210/96, § 156, ECHR 2000-XI). It notes that the objections and arguments put forward by the Government have been rejected in earlier cases (see Lukenda, cited above) and sees no reason to reach a different conclusion in the present case. 25. Accordingly, the Court considers that in the present case there has been a violation of Article 13 on account of the lack of a remedy under domestic law whereby the applicant could have obtained a ruling upholding his right to have his case heard within a reasonable time, as set forth in Article 6 § 1. The Government contested that argument. II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 26. 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 27. The applicant claimed 7,500 euros (EUR) in respect of non-pecuniary damage. 28. The Government contested the claim. 29. The Court considers that the applicant must have sustained non-pecuniary damage. Ruling on an equitable basis, it awards him EUR 3,200 under that head. B. Costs and expenses 30. The applicant also claimed approximately EUR 1,570 for the costs and expenses incurred before the Court. 31. The Government argued that the claim was too high. 32. 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. The Court also notes that the applicant’s lawyers, who also represented the applicant in Lukenda (cited above), lodged nearly 400 applications which, apart from the facts, are essentially the same as this one. Accordingly, 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 applicant the sum of EUR 1,000 for the proceedings before the Court. C. Default interest 33. 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; 3. Holds that there has been a violation of Article 13 of the Convention; 4. 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 3,200 (three thousand two hundred euros) in respect of non-pecuniary damage and EUR 1,000 (one thousand euros) in respect of costs and expenses, 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 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 applicant’s claim for just satisfaction. Done in English, and notified in writing on 1 June 2006, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Vincent BergerJohn HediganRegistrarPresident

Sathasivam, J. Leave granted. These appeals are directed against the order dated 06.10.2010 passed by the High Court of Judicature for Rajasthan at Jodhpur in Writ Petition Parole No. 10309 of 2010 whereby a show cause numberice was issued to the appellant herein and the State Government and it was also held that the companyvict- Krishan Lal the appellant herein shall number be released on parole or otherwise as ordered by this Court on 29.03.2001 in the case of Subash Chander vs. Krishan Lal Ors. reported in 2001 4 SCC 458 and also against the final order dated 06.04.2011 by which the petition filed by the appellant herein was dismissed as having rendered infructuous. Brief facts The appellant herein was an accused in a murder case along with 11 accused persons. The trial Court companyvicted all the accused persons except one for the offences under Section 302, 307, 148, 450 read with Sections 149 and 120B of the India Penal Code, 1860 in short IPC and sentenced them to death. Aggrieved by the order of companyviction and death sentence, the appellant along with other accused persons filed appeals before the High Court. The High Court upheld the companyviction of all the companyvicted persons including that of the appellant herein but companymuted the death sentence to imprisonment for life. Challenging the order of the High Court, the companyplainant respondent No.2 herein filed two sets of appeals bearing Criminal Appeal Nos. 812-814 of 1999 and Criminal Appeal Nos. 815-816 of 1999 before this Court praying for setting aside the order of acquittal and awarding of death sentence to the companyvicted persons as was done by the trial Court. The accused persons also filed two sets of appeals bearing Criminal Appeal Nos. 817-818 of 1999 and Criminal Appeal Nos. 819-820 of 1999 before this Court praying for their acquittal by setting aside the companyviction and sentence awarded to them by the trial Court and the High Court. The State also filed appeals before this Court for quashing the order of acquittal of one accused person and for awarding death sentence to the companyvicted persons. This Court, in the abovesaid appeals, by judgment dated 29.03.2001, companyfirmed the companyviction and sentence awarded to the accused persons by the High Court and held that the imprisonment for life awarded to the appellant herein shall be the imprisonment in prison for the rest of his life and he shall number be entitled to any companymutation or premature release under Section 401 of the Code of Criminal Procedure, 1973 in short the Code , Prisoners Act, Jail Manual or any other Statute and the Rules made for the purposes of grant of companymutation and remissions. Prior to the order of this Court in Subash Chander supra , on 06.03.1999 and 12.05.2000, the appellant herein was allowed regular parole of 20 days and 30 days respectively by the Parole Advisory Committee and, accordingly he availed the same. During the period from 2001-2010, the appellant tried for third regular parole for 40 days by filing various applications but the same were number companysidered. Aggrieved by the same, the appellant herein moved the High Court by filing an application being D.B. Criminal Parole No. 2982 of 2010. The High Court by order dated 26.05.2010, directed the Parole Advisory Committee for companysidering the case of the appellant. Vide order dated 12.08.2010, the Advisory Committee released the appellant herein on parole on 18.08.2010 for 40 days. Aggrieved by the orders dated 26.05.2010 and 12.08.2010 passed by the High Court and the Parole Advisory Committee respectively, the Complainantrespondent No.2 herein filed an application being Civil Misc. Application No. 93 of 2010 in DB Criminal W.P. No. 2982 of 2010 before the High Court for reconsideration of the order dated 26.05.2010 and for quashing the order dated 12.08.2010 passed by the Parole Advisory Committee. The High Court, by impugned order dated 06.10.2010, issued show cause numberice to the appellant herein and the State Government and also held that the appellant shall number be released on parole or otherwise as ordered by this Court in the case of Subash Chander supra . After the reply of the appellant herein, the High Court, by final order dated 06.04.2011 dismissed the petition filed by the appellant herein as having rendered infructuous. Against the orders dated 06.10.2010 and 06.04.2011, the appellant has filed these appeals by way of special leave before this Court. Heard Mr. K.V. Viswanathan, learned senior companynsel for the appellant, Mr. Amit Bhandari, learned companynsel for respondent No.1-State and Mr. Rishabh Sancheti, learned companynsel for respondent No.2-the Complainant. The only point for companysideration in these appeals is whether the appellant is entitled to be released on parole in the light of the order passed by this Court on 29.03.2001 in Subash Chander supra ? In order to understand the claim of the appellant, it is useful to refer the direction given by this Court in Subash Chander supra . When the above-said appeals were filed by the companyplainant, the State as well as the accused before this Court, it was represented on behalf of the present appellant Krishan Lal A-1 that the Court can pass appropriate orders to deprive the appellant herein of his liberty throughout his life. It is also seen from the order that upon instructions, Mr. U.R. Lalit, learned senior companynsel submitted that Krishan Lal A-1 appellant herein, if sentenced to life imprisonment, would never claim his pre-mature release or companymutation of his sentence on any ground. The above statement of the learned senior companynsel for Krishan Lal A-1 appellant herein had been recorded by this Court. It is also relevant to numbere that in the companyrse of hearing, Mr. Ranjit Kumar, learned senior companynsel, who appeared for the Complainant in that matter, companytended that if accused like Krishan Lal A- 1 , appellant herein, is number awarded death sentence, he is likely to eliminate the remaining family members of Bhagwan Ram, as is evident from his past companyduct and behaviour. He further submitted that in order to protect the surviving family members of Bhagwan Ram, it is necessary to at least deprive Krishan Lal A-1 -appellant herein of his life. It is relevant to point out that this Court accepted the apprehension made by the learned senior companynsel for the Complainant. In those circumstances, the following order insofar as Krishan Lal the appellant herein is companycerned was passed However, in the peculiar circumstances of the case, apprehending imminent danger to the life of Subhash Chander and his family in future, taking on record the statement made on behalf of Krishan Lal A1 , we are inclined to hold that for him the imprisonment for life shall be the imprisonment in prison for the rest of his life. He shall number be entitled to any companymutation or premature release under Section 401 of the Code of Criminal Procedure, Prisoners Act, Jail Manual or any other statute and the Rules made for the purposes of grant of companymutation and remissions. Emphasis supplied From the above direction, it is clear that Krishan Lal-appellant herein has to serve the imprisonment throughout his life in prison and is number entitled to any companymutation or premature release under the Code or any other Act including Prisoners Act, Jail Manual or any other statute and the Rules made for the purposes of grant of companymutation and remissions. It is true that this Court has number companysidered his right or entitlement of parole. Mr. K.V. Viswanathan, learned senior companynsel for the appellant in support of his claim for parole relied on the Rajasthan Prisoners Release on Parole Rules 1958. In exercise of the powers companyferred by sub-section 6 of Section 401 of the Code of Criminal Procedure, the Government of Rajasthan has passed the above Rules. Section 2 d defines Parole as under 2 d Parole means companyditional enlargement of a prisoner from the jail under these rules As per the Rules, a prisoner sentenced to imprisonment for number less than one year may be permitted to make an application for release on parole before the Prisoners Parole Advisory Committee. Rules provide companystitution of Prisoners Parole Advisory Committee and procedures to be followed in companysidering such applications. Rule 9 of the said Rules speaks about Parole period. Mr. Viswanathan has also pointed out that on the basis of the said Rules, the appellant was granted parole on two occasions i.e., on 06.03.1999 and 12.05.2000 for a period of 20 days and 30 days respectively, and when the appellant made another application praying for third parole for 40 days, based on the order dated 26.05.2010 of the High Court, the Advisory Committee, by order dated 12.08.2010 released the appellant on parole for a period of 40 days on 18.08.2010. The said order was challenged by the companyplainant respondent No.2 herein by filing an application being D.B. Civil Misc. Application No. 93 of 2010 before the High Court. Considering the earlier order of this Court dated 29.03.2001 in Subash Chander supra , the High Court rejected the 3rd application filed by the appellant for parole. Learned companynsel appearing for the State as well as the Complainant submitted that in view of the stand taken by the learned senior companynsel for the appellant before this Court giving up his right of praying for companymutation or premature release and be in prison till the end of his life and the apprehension of the companyplainants family that in the event of his release even on parole he is likely to eliminate the remaining family members of Bhagwan Ram, the present appeals are liable to be dismissed. We have already extracted the ultimate order of this Court companyfirming the imprisonment for life in prison for rest of his life and foregoing companymutation or premature release under any of the statute or Rules or Circulars. Though Mr. Viswanathan has claimed that the appellant was granted parole on two occasions for 20 days and 30 days and numberadverse against the appellant was reported, it is relevant to numbere that the appellant was granted parole on the abovesaid two occasions prior to the order passed by this Court on 29.03.2001 in Subash Chander supra and the specific direction of this Court in that order was number placed for companysideration at the time of granting 3rd parole to the appellant by the Advisory Committee. Though the Rajasthan Prisoners Release on Parole Rules, 1958 enables the appellant to apply for parole before the Advisory Committee, we are of the view that in view of the companymutation of death sentence into life imprisonment and specific companyditions imposed foregoing companymutation or premature release under any statute or Rules and companysidering the apprehension expressed by the companyplainant-respondent No.2 herein, we hold that henceforth the appellant shall number be entitled for regular parole in terms of Rule 9 of the said Rules. However, if any companytingency arises, the same may be companysidered by the Advisory Committee in terms of Rule 10-A i of the said Rules which reads as under 10-A i Notwithstanding the provision of rules 3,4,5, 9 10 in emergent cases, involving humanitarian companysideration viz., 1 critical companydition on account of illness of any close relations i.e. father, mother, wife, husband, children, brother or unmarried sister 2 death of any such close relation 3 serious damage to life or property from any natural calamity and 4 marriage of a prisoner, his her son or daughter or his her brothers sisters in case his her parents are number alive.

Lord Justice Ward: On 16th July 2009 Mr Recorder Hockman Q.C., sitting at the Central London County Court, found that the defendant had no interest in or entitlement to a property in Poland and that a property in Alinora Crescent, Worthing should be sold forthwith and that the net proceeds of sale be paid to the claimant and the defendant in equal shares. The defendant appeals with the permission of Lord Justice Mummery who stayed the order for sale pending the hearing of this appeal. The background The claimant is a widow. The defendant, seven (or perhaps even thirteen) years her senior, was separated from his wife when he met the claimant and they began to live together in 1992. At that time the claimant was living in a substantial property, Longlands, in Worthing which was her former matrimonial home. It was free of mortgage. She was self-supporting and comfortably placed. The defendant had a home in Arundel which was subject to a mortgage. They decided to live together at Longlands. In 1993 the defendant was divorced. In 1994 the parties became engaged but they never married. By 1998 Longlands was in need of some renovation and the parties, with independent legal advice, agreed that Longlands should be transferred into their joint names but charged with payment to Barclays Bank of a loan of some £25,000. They executed a Deed of Trust to hold the beneficial interest in the property as to two thirds of the gross value to the claimant and as to one third of the gross value less the outstanding mortgage to the defendant. At or about the same time the defendant sold his Arundel property. More importantly, on 6th January 1998 the parties, again with independent legal advice, entered into a written agreement which provided that the mortgage repayments would be made by the defendant but common household expenditure would be paid in equal shares. As for contents, they agreed that all items of personal use or adornment should belong to the party who had acquired those items but all furniture and household effects were to be considered to be owned jointly regardless of when or by whom they were acquired. Any bank or building society accounts or any investment or capital asset in the sole name of either party was to remain the property of that party. The agreement was expressed to terminate when the parties agreed mutually to cease to live together in which event the agreement set out detailed provisions for the disposition of the home in which they were living, in effect, giving each an opportunity to buy out the other but if neither wished to remain in the home or was unable to complete the purchase, then the home should be sold and the proceeds divided in accordance with their beneficial interest therein. The contents were to be divided equally. The claimant is Polish and her parents lived in Poland. Having made some provision for her brother, the claimant's parents on 14 March 2002 acquired a plot of land on which to build a retirement home for her in Poland. In August 2002 they purchased the adjoining plot. This is the Polish land which is the subject of the Recorder's order. After planning permission was obtained in July 2003 a house was built upon the land. Meanwhile Longlands was sold in June 2002 and a property at Beeches Avenue in Worthing acquired, again to be held as to two thirds to the claimant and one third to the defendant. The result of the sale was that some £45,000 was released to the claimant but only £2,511 was paid to the defendant after discharging the mortgage. These monies were paid into a joint Lloyds TSB account. Beeches Avenue was sold in August 2005 and the parties acquired Alinora Crescent (to which I will refer as Alinora) but this time the parties held the property on trust for themselves as tenants in common in equal shares. In June 2006 the parties moved into the new house in Poland. The relationship between the parties became unhappy and they separated at the end of December 2006. Although there was a short reconciliation the relationship appears to be at an end. The defendant moved back to occupy Alinora. The claimant returned to England in July 2007 and after a short stay with her daughter she too moved back to Alinora. They continue to occupy this small flat. It cannot be easy for them. Attempts by either to buy out the interest of the other in Alinora having failed, the claimant brought her claim seeking an order for the sale of Alinora and the equal division of the proceeds of sale. The defendant did not oppose the sale of Alinora once his beneficial interest in the Polish property had been determined and an order for its sale been made. By his counterclaim the defendant sought declarations that the Polish property was held by the parties in equal shares or in such shares as the Court should determine; he sought an order for the immediate sale of the Polish property, alternatively for payment by the claimant of the defendant's contributions towards the purchase of and costs of building of that property. He pleaded that there was an express agreement to hold the Polish property in equal shares. Alternatively he said that it was the common intention to do so, that common intention being evidenced by the payments he made totalling £58,500 towards the purchase and/or building costs of the Polish property. He gave particulars of those payments as follows: 25th March 2004 £6,000 1st July 2004 £15,000 10th August 2005 £15,000 23rd June 2006 £12,000 14th August 2006 £7,000 11th September 2006 £3,500 In the alternative he sought the repayment of these sums. In her defence to this counterclaim the claimant alleged that the defendant agreed to lend her father £15,000 to put a roof on the property. After a four day trial which ended on 12th March 2009, the Recorder gave judgment on 14th July 2009. The Recorder's Judgment He directed himself to approach the defendant's claim for an equitable interest in the Polish property in the light of the guidance given by the House of Lords in Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432 from which he extracted the succinct proposition that: "… it appears that it is necessary to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it." He then explained his approach to his judgment: "4. I propose to set out my factual findings (in so far as it is necessary to make such findings for the purposes of resolving issues in the case). I shall then set out my general conclusions, explaining as concisely as possible why I have arrived at those conclusions and (where it is necessary to do so) why I found certain parts of the evidence more acceptable than others." I note the words in parenthesis. When it came to the money transferred from England to Poland he began with several payments made between 9th July 2002 and 5th August 2002 totalling £14,500 and he said this: "10. … Each party claims to have been the source of these deposits but there is no documentary evidence either way. Nor is it clear what use was made of the funds transferred to Poland. The statement of [the claimant's mother] asserts that the land was "purchased by me and my husband". I am unpersuaded by the defendant's contention that he was the source of these monies, let alone that there was a shared intention that these payments were to go to the purchase of the land." These payments are not among those pleaded to establish the common intention. Moreover they were paid some four months after the property was acquired. A further difficulty, which may be insuperable, is that the payments were made to the claimant's parents, then the owners of the land, not to the claimant herself. If – and I do not know the answer – a resulting trust could arise in respect of land situated abroad by reason of payments to the foreign owner of the land, it would be the claimant's parents, not the claimant herself, who would hold the land on trust for the defendant. Since these matters are not part of the pleaded case, they can be ignored. The first pleaded payment is the £6,000 paid on 25th March 2004. The Recorder found that it was paid by the defendant from his Barclays Bank account into the joint Lloyds TSB account and then to Poland. But he said: "12. … The intention lying behind this payment is unclear. It cannot have been for the purchase of the Polish property since this had occurred some two years previously. It may have been contemplated by the defendant that it would help towards the building works but I am unable to find that there was any shared intention to this effect." A shared intention may be demonstrated by proving the actual agreement between the parties but the Recorder does not seem to be approaching the matter in that way. If the money was in fact paid towards the cost of the building works and was in fact so applied, then it behoved the Recorder to explain why he could not find an inferred or imputed common intention to create an interest in the land. There is a further difficulty about this finding. Everyone in the case overlooked the fact that the parties became engaged to each other in 1994 and that it must be inferred that the agreement to marry was terminated when their relationship broke down and they separated. Section 2 of the Law Reform (Miscellaneous Provisions) Act 1970 did not cross the radar until I drew it to their attention. Section 2 provides as follows: "2. Property of engaged couples (1) Where an agreement to marry is terminated, any rule of law relating to the rights of husbands and wives in relation to property in which either or both has or have a beneficial interest, including any such rule as explained by section 37 of the Matrimonial Proceedings and Property Act 1970, shall apply, in relation to any property in which either or both of the parties to the agreement had a beneficial interest while the agreement was in force, as it applies in relation to property in which a husband or wife has a beneficial interest." Section 37 of the Matrimonial Proceedings and Property Act 1970 states: "37. Contributions by spouse in money or money's worth to the improvement of property It is hereby declared that where a husband or wife contributes in money or money's worth to the improvement of real or personal property in which or in the proceeds of sale of which either or both of them has or have a beneficial interest, the husband or wife so contributing shall, if the contribution is of a substantial nature and subject to any agreement between them to the contrary express or implied, be treated as having then acquired by virtue of his or her contribution a share or an enlarged share, as the case may be, in that beneficial interest of such an extent as may have been then agreed or, in default of such agreement, as may seem in all the circumstances just to any court before which the question of the existence or extent of the beneficial interest of the husband or wife arises (whether in proceedings between them or in any other proceedings)." Thus the court did not consider, but ought to have considered, whether this was a contribution to the improvement of the Polish property, whether it was a contribution of a substantial nature and whether subject to any contrary agreement, a beneficial interest in the property was acquired. The Recorder then turned to the payment of £15,000 made on 1st July 2004. He found that it was made from the defendant's Barclays Bank account, there being an indication from the note on the bank statement that it was paid to a "Mr Alfred" who was taken to the claimant's father. The Recorder said: "13. … It may have been a loan to him. Whatever the status of this payment in terms of the issues which I have to decide, it seems to be common ground that it was intended to be used, and was in fact used, to facilitate the erection of a roof to the Polish building which it was necessary to complete during the summer months." I regret to say I find this unsatisfactory. Once again it behoved the Recorder to make a decision about this dispute. The defendant said he lent the money to the claimant. She pleaded that it was a loan to her father. One has to bear in mind that this payment was made two and a half months after the land had been given by the claimant's parents to the claimant. We do not have a transcript of the evidence but I see that in paragraph 15 of the claimant's witness statement dated 13th February 2009 she said: "15. … Sadly my father became ill and started to run out of money regarding the finishing of the property and approached me to see if I could assist further, in particular with regard to the cost of the roof. I was not in a position to assist further but (the defendant) said he could loan me £15,000 which he did. This money was paid from [the defendant] directly into my father's account and was always intended to be a loan. I agreed with [the defendant] that I would in fact repay him the money when I could." The Recorder ought to have decided, but failed to decide, whether or not this advance was a loan because if it was a loan then the fact of lending would defeat any inference or imputation of a common intention to acquire an interest through the payment of that money. If it was a loan, to whom was the money lent and was it repaid? Moreover, since it seemed to have been "common ground that it was intended to be used, and was in fact used, to facilitate the erection of a roof to the Polish building which it was necessary to complete during the summer months" then questions could arise as to the application of section 37 set out above. The next payment was made on 10th August 2005 out of the joint Lloyds TSB account in the sum of £15,000. The Recorder found: "16. … It is common ground that this sum was sent to Poland although it is unclear precisely how it was used. … I find that in any event the payment of £15,000 to Poland on 10th August 2005 came from the claimant's share of the proceeds of sale of Beeches." On the basis of that finding, the defendant can claim no benefit from that payment. The next payment was made in June 2006 in the sum of £12,000. As to this the Recorder found: "18. … Again it is unclear precisely how this money was used although the claimant says that it was used for items such as furnishings." Once again the Recorder failed to reach a decision. The Recorder accepted that on 8th August 2006 the defendant paid £10,000 into the joint Lloyds TSB account and following that, on 14th August 2006 a further sum of £7,000 was paid to Poland. He said of this: "20. … Although the defendant contends that this was a payment towards the building works I am unable to accept that this was the purpose of the payment since as I find these works were by this date substantially complete and it seems to me more likely that the payment was intended to facilitate the parties' living arrangements in Poland." This finding is adverse to the defendant's case. Finally, the Recorder dealt with the £3,500 which he found was paid from the joint Barclays Bank account and, according to the defendant, given to the claimant for the purpose of contributing to the cost of the building works. But the Recorder found: "21. … once again given the works had been substantially complete for some time, I find it more likely that this was a further payment in respect of living expenses." Again the finding is inimicable to the defendant's case. The Recorder expressed his conclusions in this way: "23. In arriving at my ultimate conclusions with regard to the Polish property, it seems to me that I have to bear in mind that an unusual feature of this case is that the property was not purchased by either of the parties but was given to the claimant by her father. As Mr Dew submitted, this has two consequences: first, it is inherently less likely that there was a shared intention that the property be jointly owned, because unmarried couples do not normally intend to share jointly property given to one of them. Secondly, the defendant is unable to show a contribution to the purchase because neither of the parties purchased the property. What he is left with therefore is reliance on alleged contributions to the costs of building the property, on which I have however already made specific findings. A further unusual feature of the case is that there are clear examples of situations in which the parties unquestionably did form a shared intention to own property jointly and in those situations, they have written down and defined their respective interests. 24. It was the defendant's evidence that he was told that the Polish property would held by the parties in equal shares and that the claimant said she would put his name on the deeds. Given my findings as set out above, I find this improbable and cannot in the circumstances attach weight to such evidence, nor to the supporting evidence (not adduced orally) of Jean-Paul [Pfluger] or of Ester Park. As to the evidence of the defendant's former wife, Coral, once again, I cannot construe this as demonstrating a shared intention that the Polish property was to be jointly owned (as opposed to being a shared home). As to Wendy Davis, I found her evidence (in which she suggested that the parties stated in conversation that the Polish land was being bought in joint names) inconsistent with the known facts and therefore I was unable to accept it. In general, therefore, and notwithstanding Mr Darton's persuasive comments, I prefer the evidence of the claimant and of her witnesses. 26. Against this background and in the light of my factual findings as set out above, I am unable to accept that it was the parties' shared intention at any time that the Polish property would be jointly owned." He dismissed the claim based on proprietary estoppel. He also rejected the claim to be entitled to the return of the monies which the defendant had contributed on the basis that, whatever the precise purpose of the payments, there was no reason to suppose they were not used for that purpose at the time. Discussion In my view, the judgment is seriously flawed. The Recorder failed to make any adequate finding as to the use made of the payment of £6,000 in March 2004. That payment was capable of supporting an inference of common intention and the Recorder gives no reason why that conclusion should not have been drawn. Whether or not the £15,000 paid in July 2004 was a loan, it was in fact used to facilitate the erection of the roof, yet the Recorder failed to draw any conclusion as to whether that was enough, whether on ordinary equitable principles or by virtue of the operation of section 37 of the Matrimonial Proceedings and Property Act 1970, to give an interest in the land. He made no finding as to the use to which the £12,000 was put. It was a sum which was capable of supporting the defendant's case. For those reasons I would allow the appeal. A vast sum of money seems to have been spent already on this litigation and it is therefore with great regret that I have to conclude that the only proper way to dispose of this appeal is to remit the matter to the County Court, to a different judge, for re-hearing. Since the Recorder has made some findings of fact which, taken by themselves, withstand attack, and which therefore, cannot give rise to any inference of common intention nor amount to a contribution towards the improvement of the property, then in the interest of saving costs, I would confine the reconsideration of this case to the impact, if any, of the payments of £6,000, £15,000 and £12,000, made on 25 March 2004, 1 July 2004 and 23 June 2006 respectively, have on the claim for a beneficial interest in the Polish property. I would not allow the case based on proprietary estoppel or restitution to be re-opened. I appreciate that limiting the case to the three payments mentioned may be unsatisfactory inasmuch as it appears to tie the hands of the judge who has to re-hear the matter and there is the danger that he may come to different conclusions about the credibility and reliability of the parties and their witnesses and that a different view would be taken of the other payments. Nevertheless this litigation must be kept within manageable bounds and I would limit the reconsideration accordingly. I would grant a stay of execution of the order for the sale of Alinora pending the outcome of the counterclaim in respect of the Polish property. In order for justice to be truly done between these parties, their affairs should be resolved as a whole so that if the defendant does have an interest in the Polish property, then he must be bought out at the same time as Alinora is sold. This case cries out for a realistic assessment, I emphasise by each party, of the likely outcome. It is, therefore, a paradigm case for mediation. It would be foolish indeed to spend another four days in the County Court. Conclusion I would allow the appeal accordingly, remit the case to the County Court for a re-trial on the limited issues identified above, before a different judge, and stay execution of the order for sale of Alinora in the meantime. Lord Justice Lloyd I agree. The combined effect of section 2 of the Law Reform (Miscellaneous Provisions) Act 1970 and section 37 of the Matrimonial Proceedings and Property Act 1970 did not feature in the case, as Ward LJ has observed, either in the pleadings or in the Appellant's Notice. The recorder is therefore not to be criticised for not dealing with this point. Had there been no other deficiency in the recorder's judgment, I would not have regarded this point by itself as sufficient to justify allowing the appeal. However, given that his reasoning on aspects of the case to which this point is relevant is such as to require remission for a limited re-trial, because of his failure to make findings of fact as to the relevant intentions or as to the use of the money, it seems to me right that the court on that re-trial should be able to address that issue. For that purpose, assuming that the defendant wishes to rely on the point, he should formulate his case by way of an amendment to his Defence and Counterclaim. If he does so, the claimant will need to set out her response to that case by amendment of her Reply and Defence to Counterclaim. Lord Justice Pitchford I also agree.

Sir Robert Nelson : On 27 April 2009 the Claimant, then aged 57, suffered a stroke. This was caused by the condition of infective endocarditis from which the Claimant had been suffering, and which had remained undiagnosed. She claims that had the three Defendants, General Practitioners at the West Street Surgery, Chipping Norton, not acted negligently they would have considered infective endocarditis as a possible cause of her presentation, and would have investigated her appropriately and/or referred her to hospital immediately for investigation and treatment. Had this been done and the condition discovered, the Claimant contends that the stroke would have been avoided. The essence of the Claimant's case is that each Defendant failed to heed what he or she was told about the symptoms which should have been suggestive of infective endocarditis, or alternatively, that each failed to ask the appropriate questions to elicit such symptoms. The Defendants contend that no such symptoms were reported to them by the Claimant, nor were any such symptoms reasonably apparent, and no duty to ask any further questions than those that they asked, arose. There is a considerable factual dispute as to what account of her symptoms the Claimant gave to each of the Defendants and what symptoms she was suffering from, or was likely to have been suffering from on the occasion of each consultation. I am asked to deal with the issues of liability and causation, damages having been agreed between the parties. The background facts The Claimant is a married woman, the mother of four grown up children, and lives with her husband in Chipping Norton. She is a woman of great energy and determination. Prior to her health problems she worked as a teaching assistant, dinner lady, caretaker and cleaner at a school in Chipping Norton for 26 hours a week, and also did private cleaning work in the evenings. She was a member of a local running club and regularly used to run ten miles on a Sunday, 4 – 6 miles on a Tuesday and 3 – 4 miles on a Thursday. She took part in the London Marathon. She was also a keen swimmer and gave swimming lessons, and played badminton. She was also a committee member of the local League of Friends. However in 2005 she was diagnosed as suffering from aortic valve disease and referred to the John Radcliffe Hospital. Her condition was managed until 11 August 2008 when her aortic valve was replaced with a biological tissue valve. Apart from the fact that the replacement valve started to narrow, the operation was successful and the Claimant was told that it would take her about 12 months to recover fully from the operation. She was able to return to work after about 6 months, though did not continue with the private cleaning or the swimming lessons. She returned to jogging in January 2009 when she felt she was recovering. She managed up to about 2 miles or so jogging and walking and kept this up even though she did not feel she was really improving. From February through until her stroke on 27 April 2009 however the Claimant describes her condition as deteriorating. Her running stamina suddenly disappeared in February when she had to stop after running about 150 yards. Her muscles were pulling and felt as if they would just not work. She was forced to join the walkers in the running group rather than the runners. Her walking speed slowed, she experienced pain in her legs, particularly the left. She suffered hot flushes even though her menopause had ended some 8 years earlier and had to strip off her clothes to cool down. She sweated both day and night and her running partner, and friend, Catherine Sole said that she had told her that her night sweats caused her to change her pyjamas two or three times a night. The Claimant's husband, Robert McCabe, said that she suffered severe sweats at night; they were very apparent and occasionally she had to change her night clothes. The Claimant's GP at the West Street Surgery was Dr Jane Pargeter who was a fellow member of the same running club as the Claimant and in whom the Claimant had confidence. She saw Dr Pargeter on 10 February 2009 and 3 March 2009. She did not know whether her difficulties with running had commenced before the February consultation but they had by 3 March 2009 and she thinks she would have raised this with Dr Pargeter. She accepts that she did not mention sweats or night sweats at that time. Dr Pargeter's note refers to the Claimant wanting to lose a bit more weight and get fitter. The Claimant accepts that she would have told Dr Pargeter if anything was troubling her. The Claimant's evidence is that her condition worsened in March and her family and friends persuaded her that she could not wait for Dr Pargeter's return from Australia. By the end of March the Claimant said that she was suffering from leg pain, difficulty in walking, sweats as if she had the menopause, flu like symptoms and was feeling progressively unwell, a pattern which continued and worsened until the time of her stroke. The Claimant's account of the deterioration in her health was supported, subject to some inconsistencies, by her husband Robert McCabe, her daughter Philippa McCabe, her sister Doreen Wilson, and her friend Catherine Sole. The witnesses' recollections as to when the Claimant's health started to deteriorate and which problem emerged first were not identical, but all were clear that they started after Christmas 2008. Philippa McCabe noticed deterioration in her mother with inability to walk any distance, flu like symptoms and her complaining of hot flushes in January 2009 whereas the other witnesses thought the problems commenced in February 2009, as the Claimant herself said in evidence. Some thought that the leg pains came first, others that the sweats and hot flushes came first. Mr McCabe accepted that he was not clear as to the precise timing of the onset of symptoms though he thought it was about February 2009, the sweats being in early February before the leg pains. Doreen Wilson thought that the symptoms started in February and had noted that this was the time that the Claimant had become unwell in her diary. She thought that the sweats started a few weeks before the leg pain but both started by the end of February. What these witnesses were clear about was the extent to which the Claimant became unwell and the progressive nature of the deterioration. Mr McCabe described his wife as someone who was always a "busy bee"; she was enormously involved in so many things. After her symptoms commenced she became weaker and lost enthusiasm for other activities. Indeed she became distressed by any form of physical activity. Initially he had thought that the leg pain was a reaction to starting to run again prematurely. He thought that the sweats were obviously the menopause but his wife told him that she had ceased the menopause many years before. He wondered about the heart valve but felt reassured by the visit to Dr Moore; they had done what had to be done by the visit to the doctors and Mrs McCabe had to soldier on. When she saw Dr Fisher and kidney stones were talked about Mr McCabe thought that they were home and dry. "You've got what they say" he thought with relief. He described his wife as very stubborn and obstinate and if she didn't feel that something was life threatening she would try to continue as normal. Thus she carried on with her work, albeit with the help of her sister and using the car or being driven because of her difficulties in walking. Mr McCabe was so concerned about her health that he thought they were going to lose her. Philippa McCabe described her mother's condition of leg pain, sweats, flushes and general tiredness as being the complete opposite of what was normally the case. Furthermore her mother complained of leg pain which was unusual as she was normally completely stoic. Her leg pain became worse, her walking deteriorated and she became lethargic. Philippa McCabe felt that something was taking over her body. She said that by 6 April her mother was increasingly worse. She had never seen her look poorly before; she was very tired and walking was an issue. It was, Philippa McCabe said, obvious that something very drastic was going on. Catherine Sole described the Claimant's health deteriorating across April. The Claimant's walking tolerance reduced to 20 yards before the pain in both legs became intolerable. Her family and friends persuaded her to go to see the GP which she did at the end of March. Catherine Sole also noted that the Claimant's memory had become poor after the stroke so that she accompanied her to see doctors as she couldn't always remember what the doctors had told her. Doreen Wilson described the Claimant as struggling to walk. They belonged to a shared Thursday Club but the Claimant had lost her exercise tolerance and could not keep up. She continued to suffer menopause like symptoms and sweats. Her condition was worse across April when she appeared to be "just fading away". She phoned Dr Pargeter on 28 April 2009 to describe to her the weeks of deterioration that the Claimant had suffered. She regarded all of the Claimant's symptoms as being very worrying. The Credibility of the Claimant The Defendants obtained surveillance evidence on the Claimant. It demonstrated, the Defendants contended that the Claimant was able to do more in her daily life after the stroke than she had been telling the examining doctors. The total claim put forward on her behalf amounted to about £1M in total. After the Defendants surveillance video evidence was served quantum was agreed in the sum of £150,000. The Defendants, in their written opening, sought to put the video evidence before the court on the basis that it was relevant to the issue of credibility, and hence liability, as well as on the issue of quantum. At the commencement of the trial I indicated that I considered such evidence was in principle relevant to the issue of credibility and could and should be viewed by the Judge if the Defendants decided to adduce it. Jane Mishcon, counsel for the Defendants cross-examined the Claimant on the contents of the surveillance video without showing it to her or the court with the consent of the Claimant's counsel. The Claimant explained that her ability to deal with daily life had indeed improved more than expected but this was because of the content of one of the medical reports which spelled out what her life would be like at 65, 70 and 80 on the then prognosis. When she read what it said would happen to her at 70 she said that she was not prepared to accept that, and didn't want it, so she tried to get her confidence back. It was her courage which had made her improve, increase her confidence and, together with her painkillers, increased her mobility. After hearing the Claimant give evidence the Defendants' counsel decided not to request the court to view the video or put it to the Claimant. In her closing submissions, both written and oral Ms Mishcon abandoned any attack on the Claimant's credibility and indicated that they were a very nice family doing their best to recollect when the symptoms began. Their recollection that severe and significant symptoms began in February 2009 was incorrect but it was not submitted that it was untruthful. Having heard the Claimant and her family and friend give evidence I am entirely satisfied that the Defendants were correct to abandon any attack on the Claimant's credibility or that of her witnesses. I formed the clear view that they were decent honest people seeking to give the court as accurate an account of what had happened as their recollections would permit. The Consultations Dr Moore – 30 March 2009 The Claimant was not a regular patient of Dr Moore; she had seen him before as a patient but not for a long time. They did know each other however because Mrs McCabe was a committee member of the League of Friends Committee at the Community Hospital in Chipping Norton and Dr Moore was a Medical Member of that Committee. The Claimant's recollection is that they spent some time talking about the League of Friends. She was feeling very ill by the end of March and recalls telling him that she found it difficult to walk and to run and had pain in her legs. She told him that she was having sweats as if it was the menopause again and also had flu like symptoms. Dr Moore knew that she was a runner and asked about the pain. She tried to explain that it was not a running pain nor a running injury. Dr Moore's notes read as follows: "30.3.2009 West St. Surgery Dr Jonathan Moore First   E: Leg Pain   S: Odd pain which started as shooting pain in L thigh down to foot and is now a more localised soreness over shin, no clear cause and lasted only 24 hours.   Rx: Naproxen Tablets 250 mg   P: Trial of NSAIDs, W & S, review INB" Dr Moore's evidence was that the Claimant made no complaint to him of any symptoms other than those relating to her leg. He said that he did not recall her making any reference to the menopause and did not know where in such a consultation she would have brought in such a reference. As far as he could recollect in the flow of conversation it did not happen. Had such symptoms been mentioned he would have had to have asked a lot more questions to clarify what she was saying as he was aware of the fact that sweating was a sign of infective endocarditis in someone with an artificial valve. His memory however was that she talked merely about leg pain. As far as he could hear the Claimant was able to mount the steps to his room without difficulty. Mr McCabe said that he spoke to his wife after her visit to Dr Moore and quizzed her about what had happened. She said that she had mentioned night sweats to Dr Moore and her legs and that Dr Moore had told her it was to do with her running and that she was probably over doing the exercise. Philippa McCabe however said that her mother told her that all she told Dr Moore about was her leg pain as did Catherine Sole. In his witness statement and in his evidence Dr Moore said that he considered that the Claimant's leg pain, in so far as the shooting pain down to the foot was concerned, was sciatica, although he had made no reference to this in his note. It is also inconsistent with his description of the pain being "odd" and having "no clear cause" though he explained that in evidence as relating solely to the localised soreness over the shin. Dr Barraclough, the Defendant's GP expert said that he too thought that the shooting pain was sciatic but did not state that in his report. Dr McCarthy the Claimant's GP expert, said that the entry in the notes was not consistent with sciatica. On 18 August 2009 a Significant Event Meeting took place at the Defendant's surgery. Dr Pargeter, Dr Moore and Dr Hall were amongst those present. Such meetings are held every six to eight weeks at the practice to discuss particular patients. Mrs McCabe's case was discussed. Her leg pains were described as "peculiar" and it was felt in retrospect, i.e. with hindsight, that many of her symptoms from January had been embolic phenomena. The action point was for doctors to consider diagnosis of sub acute bacterial endocarditis in any patients with valve replacements. Dr Fisher – 6 April 2009 The Claimant was shopping with Catherine Sole in Cheltenham on 6 April 2009 when she experienced a sudden and severe pain. The shopping trip had to be abandoned and the Claimant went home. Catherine Sole telephoned Philippa McCabe and said that she felt that her mother needed a visit from the GP. Philippa McCabe therefore called the reception at West Street Surgery. Dr Fisher was as a consequence given a message to ring Mrs McCabe which he did. His note of that telephone conversation is as follows:- "6.4.2009 West St. Surgery Dr Neil Fisher First   E: Telephone encounter   S: Pt has hx of renal stones. Since today onset of R flank pain. No dysuria / haematuria. No diarrhoea   Vomited once this afternoon – no blood. Able to keep small amounts of water down. Unable to make it in to be seen.   P: I will go and see ……." Dr Fisher said in evidence that Mrs McCabe had told him that she had felt a sudden onset of pain in her flank and had vomited once due to the pain. She had volunteered that she had a past history of renal stones and informed him that her symptoms felt like the previous episodes of renal colic. He asked her questions about her kidney and bladder symptoms and noted there was no dysuria and no haematuria, nor was there blood in the vomit. Because Mrs McCabe was in too much pain to come to the surgery Dr Fisher went to see her at her home at about 6.30pm. His notes of that visit on the evening of 6 April 2009, which had to be drawn up later, are as follows:- "8.4.2009 West St. Surgery Dr Neil Fisher First   E: Home visit S: Further to above written in retrospect. When visited on evening of 6.4.9 pt now able to eat and drink with no further vomiting, pain had settled largely. Able to pass urine, no haematuria/ Dysuria. Note has naproxen for OA. No GI/ chest SX   O: Apyrexial, p 76/min, abdo SNT, no masses felt. Well hydrated, chest clear   Rx: Ciproflaxcin Tablets 500mg   P: Urine dip – tr leu and blood. Daughter to drop MSU into practice tomorrow. Imp - ?? renal stone therefore to continue naproxen and add in 10/7 Cipro, likely need urol review as second episode Will d-w snrs. Explained red light sx 2 pt and she will call if further concerns" The evidence of Philippa McCabe and Doreen Wilson, who were present at the house when Dr Fisher made his home visit indicate that the Claimant was very unwell that day. In evidence the Claimant said that she was able to remember nothing about the consultation at her home as she was in too much pain. She was too ill to say what she told Dr Fisher she was not able to recall the conversation - "not a word". When referred to paragraph 15 of her witness statement she said she did remember telling the GP about her sweats and legs but she thought she had got appendicitis or a kidney stone. Neither Philippa McCabe, nor Doreen Wilson heard the Claimant tell Dr Fisher about leg pain. Philippa McCabe did recall her mother referring to having flushes, but not night sweats, being tired and feeling poorly whereas Doreen Wilson did not recall either night sweats or menopausal symptoms being mentioned. Dr Fisher said that the Claimant did not tell him about having hot flushes or flu like symptoms nor about leg pains. The complaint was about a very sudden onset of pain in the flank. Had he however been given a history of feeling flushed or hot flushes he would have been concerned. He would have asked about the duration of the flushes. If he had been told they had lasted for months his response would have depended upon how she was in herself; if she was very well he would have ordered blood tests because endocarditis would have been high on the list. If however she was unwell he would have ordered an acute medical admission. If told that there had been flushes and that they had lasted a long time, he would have asked further questions. The Claimant had in fact suffered from renal colic in October 2005 and on 12 August 2009 it was noted in the Urology Department at the John Radcliffe Hospital that a 2 mm stone was found in her bladder which was thought to represent a recently passed stone. It is not clear whether the Claimant's symptoms on 6 April were due to her renal colic or were embolic phenomena related to her endocarditis. Mr McCabe describes the Claimant as being very ill on the night of 6 April 2009. She was having hot flushes and severe sweats with a great deal of leg pain – real pain in her legs. Dr Hall – 14 April 2009 By this date the Claimant states that she was suffering severe pain and difficulty with both her legs and sweats and was feeling unwell. Mr McCabe describes an enormous rise in body temperature with sweating while in bed together with severe leg pain. She told Dr Hall about the pain in her legs, that the medication was not doing her any good and that she seemed to be getting more pain. She said she was suffering sweats throughout the day and night and they were just like menopausal symptoms although she had gone through her menopause years ago. In her evidence the Claimant said that she did not think that she had mentioned hot flushes but was sure that she had said sweats. After Dr Hall had examined her she spoke about her night sweats and menopausal symptoms with a sort of slight laugh. She did mention that she had gone through the menopause years ago. When it was put to her in cross-examination that she did not mention that she was unwell or that she had flu like symptoms she said she was there because she was unwell. Dr Hall had seen the Claimant before as a patient on two occasions. On 9 February 2002 she had attended with a thigh sprain on the left side while she was training for the London Marathon. Dr Hall said that she was told by Mrs McCabe on 14 April 2009 that her loin pain was settling but that she had pain in her left leg. She was advised to stop taking the Ciproflaxcin. Dr Hall examined her. She found that the Claimant had a slightly unusual pain but she could not elicit any serious features on examination. She felt that she was probably suffering from a muscular problem or localised inflammatory reaction. Her notes of the consultation are as follows:- "14.4.2009 West St. Surgery Dr Wendy Hall Review   E: Leg pain   S: OK to stop abx as no growth on MSU. Haven't been taking Naproxin because of interactions but pain lt calf continues was getting heartburn   O: V localised to top of lt calf but no swelling/erythema. Does have veins but no worse than usual   Rx: Omeprazole Capsules (Gastro – Resistant) 20mg   P: Cx Naproxin with PPI Review if worse/no better" Although there is no reference to this in the notes Dr Hall said that she recalled that as Mrs McCabe was sitting up to get off the couch after her examination she made the comment "I don't know when these hot flushes are going to end". She made no complaint, Dr Hall said, that she was finding them particularly intrusive, nor did she imply that this was a recurrence of sweating. She understood from this that her menopausal symptoms had not yet settled which is not unusual for women in their fifties. At no point did Mrs McCabe say that she was feeling systemically unwell. In evidence Dr Hall said that the Claimant's reference to hot flushes to her was a "throwaway remark" at the end of the consultation. Night sweats and flu like symptoms were not mentioned to her. Dr Hall said that she might have said to the Claimant that it was not unusual for menopausal symptoms to carry on for several years, and that would have given the Claimant the opportunity to say that in her case they had stopped many years ago. Dr Hall said she did not enquire how long she had had the hot flushes for, as she had a systemically well person in front of her. She agreed in cross-examination that she did not clarify the term "hot flushes" used by the Claimant though she accepted that those could include profuse sweating. If she had been told that she had sweated every night since February she would have checked her temperature and her blood pressure but would not have regarded this as a red flag by itself, only if other signs also existed. If it was just sweats she would have arranged a blood test in a couple of days as she believed that night sweats even with an aortic value replacement was not a red flag in itself but only as a combination with other symptoms. She agreed that there was an index of suspicion of endocarditis but not that high if it was only sweats, as it could be the menopause. She did not feel that the Claimant looked like an ill patient and accepted that she was not in fact thinking of endocarditis at the time of the consultation nor when the Claimant raised "hot flushes". She took that to be the menopause lasting on for a number of years. After her consultation with Dr Hall the Claimant said that she lost faith in the GPs and could see no point in going back to them. She did not do so even though her condition continued to get worse from day to day. Her sister made an appointment for her to see her GP again but the Claimant cancelled it. She felt they would do nothing to help her. 27 April 2009 – The Claimant's Stroke The Claimant continued to go to work in spite of the fact that she continued to sweat profusely, had severe leg pains, difficulties with walking and felt weak and lethargic. On 27 April 2009 she collapsed at work. She felt as if she had suffered a bang on her hand, sat down and felt unable to get up. Her vision was affected and she could not read the numbers on her mobile phone but managed to phone her sister and asked her to pick her up. When Doreen Wilson arrived she found the Claimant on the floor unable to get up, with defective vision and a headache. The ambulance was called and she was taken to the A & E at Horton Hospital. The ambulance notes record what the Claimant described as having happened to her and noted the past medical history as aortic value replacement, hypotension, previous kidney stones, ongoing leg problems, bladder repair. She is recorded as saying that her GP's were investigating ongoing leg problems which caused her legs to feel heavy and her to have no control over them. It was noted on the journey her tunnel vision had slightly improved. At the hospital it was noted that she still felt awful on admission and that her vision seemed strange. Her presenting complaint is noted as:- "P/C Unwell plus Palpitations Dizzy/unsteady Pins and needles L Arm NO SOB, sweating, nausea, vomiting, chest pain, no headache." Her account is noted as follows:- "Pt at work went to put rubbish in bin, while doing so, started to feel unwell, unsteady plus pins and needles L arm. Denies any chest pain, nausea, vomiting, sub. Pt says felt unable to stand unsteady with blurring of vision. Episode lasted x 60 minutes and still see blurred. Wear glasses for reading only. Denies any cough/cold, dysuria or diarrhoea. " Her Glasgow coma score was recorded as 15/15 i.e. fully conscious. The fact that she had suffered a stroke, as was later appreciated, was not diagnosed and she was sent home with a presumed urinary infection. In spite of the fact that she had suffered a stroke and was feeling very unwell she nevertheless went to the urology appointment the following day on 28 April 2009 which Dr Fisher had arranged for her. It was found that there were still traces of blood in her urine. It was noted at the Urology Department that the Claimant had experienced colic pain, right, two weeks ago, with "No fever". Her sister, Doreen Wilson who had taken her to the urological appointment was very concerned about her condition and called Dr Pargeter. Dr Pargeter's note records that Doreen Wilson had said that she was very worried that the Claimant had ongoing pain in her legs and had collapsed last night and had been taken to Horton General Hospital where it was said that she had an infection. Her vision had gone overnight in her eyes and she was not seeing properly in either eye and had a pounding head. Dr Pargeter concluded that she needed to see her and the Claimant went to the surgery the following day. On 29 April 2009 Dr Pargeter found that the Claimant was suffering from visual field defects, that she had felt faint and light headed at work and when she bent over she had noticed visual disturbance, tunnel like and possibly also double vision at times. She had a pounding head, and still on 29 April 2009 had a muzzy head and ongoing loss of visual field on the left. Dr Pargeter referred the Claimant to the Medical Assessment Unit at the John Radcliffe Hospital. The admission notes record that the Claimant had been complaining of left leg pain in both calves for one month and visual problems for two days after feeling dizzy and having a funny turn. The likely diagnosis was ? stroke. Blood tests carried out the following day on 30 April 2009, showed a white blood cell count at 7.3 (normal) haemoglobin 10.0 (lower limit of normal 12) d-dimer test greater than 20,000 (upper limit of normal 500) and CRP of 30 (upper limit of normal 8). The Claimant returned home on 30 April 2009 and was re-admitted on 2 May 2009 after a diagnosis of a further transient ischaemic attack was made. She was re-admitted for an echocardiogram on 13 May 2009 when the possibility of vegetations on the valves and a possible diagnosis of infective endocarditis was made. The trans-oesophageal echocardiogram was performed the following day on 14 May 2009. The notes of 13 May 2009 at the John Radcliffe Medical Assessment Unit are as follows: "PC: Nil acute, but Pt has been feeling constitutionally unwell for in excess of one month. HPC: night sweats on most nights since February. Two nights ago Pt had to change five times (Pt has completed menopause) Denies rigors, but feels cold sometimes Lethargy…. 5 – 6 weeks Hx bilateral leg weakness" On 14 May 2009 it was noted that the Claimant had possible splinter haemorrhages with an absent left radial pulse. The following day however it was noted that her radial pulse was easily palpable. The trans-oesophageal echocardiogram showed a very abnormal aortic valve appearance with vegetations and an abscess of the aortic route. On that day her haemoglobin was 9.6, the white blood counts 7.0, the CRP 36 and the ESR 16. A cocktail of antibiotics was commenced on 15 May 2009. On 19 May 2009 the blood cultures demonstrated that the organism causing the infection was corynobacterium propinquum. This organism is an unusual cause of infective endocarditis and it is both unaggressive yet associated with poor outcomes. The Onset and Progression of Infective Endocarditis It was agreed by the microbiologists, Dr Gant on behalf of the Claimant and Professor Masterson on behalf of the Defendants, that the endocarditis would have started by 30 March 2009 at the latest. The organism which caused the infection in this particular case was unusual. It was indolent or as described by both Dr Gant and Professor Masterson, "weedy" i.e. non-aggressive and almost incapable of causing damage except in a slow gradual way. Because the organism is so unusual precisely how it reacts is not known and it is therefore difficult to draw inferences by comparison with an ordinary organism, as to the expected progression of symptoms. Dr Gant did not agree with the proposition put to him in cross-examination that terrible leg pain, feeling unwell and night sweats from February did not fit with damage being caused in the slow and smouldering manner. A distinction must be made he said between the destruction of the organism and the body's response to that. There were many examples of organisms producing completely different responses in different patients and the Claimant's response of sweating was simply her response, even though the organism itself may have been progressing slowly. The difficulty of drawing inferences in comparison with normal organisms is clearly demonstrated by the evidence of Dr Brecker, the Defendant's cardiologist, who said that he would have expected to see a significantly raised CPR (inflammatory marker) if endocarditis had continued for such a length of time. That is the typical response. In the Claimant's particular case however her CPR was 36 i.e. still only marginally abnormal at a time when it is beyond dispute that significant vegetations had developed together with an abscess, and that endocarditis was therefore well established. I do not consider that any safe inferences as to the Claimant's condition in February 2009 can be drawn from the inflammatory markers. Professor Masterson said that the haemoglobin reading of 10 taken on 27 April 2009 (30 April 2009) demonstrated chronicity of infection, and expressed the view that that could mean that the condition of endocarditis had been going on for a month, from late March or longer than that. He accepted in cross-examination that the haemoglobin reading could fit with sweats having occurred from around February. He said it could do, yes. Dr Coltart rejected the proposition that the low blood tests were not compatible with the history, stating that there is a graduation of response and it was not possible to say that it would not give rise to such a response. There is no doubt that the endocarditis in the Claimant's case caused very substantial vegetation and an abscess. Dr Brecker and Dr Coltart agreed that the abscess, which was present takes about 4 to 6 weeks to develop, would have been present at about the first week of April. Both Dr Coltart and Dr Brecker agreed that by 14 April a trans-oesophageal echocardiogram would have been abnormal in that it would have shown the vegetation and abscess. Dr Brecker considered that it would have been just probably abnormal on 6 April though that is a grey area. Dr Coltart expressed the view that the trans-thoracic echocardiogram which is normally conducted in outpatients before any trans-oesophageal echocardiogram takes place after admission, would, with this history, have shown abnormalities. Dr Brecker thought that there was a 20% – 40% chance of a trans-thoracic cardiogram picking up the vegetation, but that a trans-oesophageal echocardiogram would be needed. You would not do the trans-oesophageal the same day, but it would be done within one day and, Dr Coltart said the results would be back the same day. It is to be noted that the size of the vegetation and abscess in this case was significant. Furthermore the notes of the Medical Assessment Unit of the John Radcliffe dated 13 May 2009 raised the question of vegetation on the valves before the trans-oesophageal echocardiogram was carried out the following day, and a possible diagnosis of infective endocarditis is noted the day before the trans-oesophageal cardiogram confirmed that. Both cardiologists indicated in evidence that the preference would be to confirm the diagnosis before commencing antibiotics but the course of action to be taken would depend upon the firmness of the diagnosis. You will not, Dr Brecker said, wish to delay unnecessarily and if vegetations were found on the valve that would be a definite diagnosis. Blood cultures would then be taken and the doctor would be compelled to start antibiotics, adjusted later if necessary to allow for what the results of the blood cultures revealed. The Issues (1) When did the Claimant's symptoms commence and what was the Claimant's condition at the time of the various consultations with the Defendants? The Claimant's account that leg pain, reduction in exercise tolerance, night sweats, and flu-like symptoms began in February 2009 is strongly challenged by the Defendants. It is submitted by Jane Mishcon on their behalf that had the Claimant experienced significant and severe symptoms from February 2009 she would have mentioned those to Dr Pargeter, on 3 March, but she did not do so, and, on the basis of the contemporaneous notes made by the three Defendants, did not tell them either. Her account is internally inconsistent as are her eye witnesses' accounts and inconsistent with each other. The account is also inconsistent, it is submitted, with other accounts of her condition given by the Claimant to medical practitioners and recorded in various hospital or other notes. Miss Mishcon also submits that the expert microbiology evidence describing the expected pattern of development of the organism to be a very slow gradual increase in the severity of the symptoms is inconsistent with the Claimant's account. I will deal firstly with the issue raised upon the expert evidence before turning to an analysis of the other evidence. I am satisfied on the basis of the evidence of Dr Gant and Professor Masterton, and indeed the expert evidence generally, that the account of the symptoms commencing in February is not inconsistent with the low virulence C. propinquum infection which the Claimant had. This is a particularly unusual and rare organism the effect of which upon patients is not known. Patients respond differently and I accept Dr Gant's evidence that he has experienced cases where some patients have a fever with no night sweats some have night sweats and no fever and some have both symptoms. The response is not predictable, particularly in the case of this unusual organism. Night sweats could well be this patient's response to the effect of the organism upon her. At the end of his evidence, as stated above, Professor Masterton accepted that sweats from around February could fit, given the apparent chronicity of the infection. I accept Dr Gant's evidence on this issue, whether or not supported by Professor Masterton, and conclude that the Claimant's account is not inconsistent with the potential development of the infection and its effect upon her. The expert evidence does not provide any basis for disbelieving or nullifying the Claimant's account. Nevertheless the unusual nature of this organism requires the court, together with the other inconsistencies relied upon, to examine the Claimant's account and that of her witnesses with care. The issue is one of timing. The development of significant vegetation on the Claimant's aortic valve and the abscess make it clear beyond doubt that the developing endocarditis would have produced symptoms of that condition; the question is when. The Defendant submits that as none of the three Defendants, nor Dr Pargeter on 3 March 2009 recorded in their notes any complaints of reduction in exercise tolerance, night sweats, leg pain or weakness or flu-like symptoms, nor have any recollection of being told of these complaints, either they had not arisen at the time of any of those consultations, or were not sufficiently serious for the Claimant to have reported them. It is correct, as Miss Mishcon submits, that Mr McCabe accepted that he could be mistaken about the timing of events though his recollection was that the sweats and leg pain commenced about February 2009. It is also right that Catherine Sole is mistaken in thinking that the Claimant still had a rash (a potential sign of endocarditis) in April when in fact it had disappeared on Dr Pargeter's notes by early February. But Mrs Sole is a close friend and running partner of the Claimant and saw her weekly on a very regular basis; she was clear in her evidence that the Claimant's problems with running started in February. Doreen Wilson, the Claimant's sister, also saw her on a regular basis and was able to ascribe the commencement of her symptoms to February when, it appeared, she had noted in her diary that the Claimant was unwell. Again, Mrs Wilson was able to see and compare the Claimant's condition on a regular basis. Philippa McCabe thought that the symptoms had started in January 2009 i.e. in the month before the other witnesses had stated that they had begun. She did have however a particular reason for recalling that they commenced early in the year by reason of the fact that she could relate it to the time when she actually left her parents home and moved in with her boyfriend, which was on Valentine's Day February 2009. When the Claimant saw Dr Pargeter on 10 February 2009 and 3 March 2009 she did not mention night sweats, painful legs or flu-like symptoms although on the occasion of the first visit she said that maybe her symptoms had not commenced. The Claimant said in evidence that she did tell Dr Pargeter about her difficulties with running on 3 March 2009 although Dr Pargeter's note merely records, "still wants to lose a bit more weight and get fitter". Dr Pargeter was not called to give evidence. Whilst I accept that the Claimant may have raised the issue of problems with her running with Dr Pargeter, it appears that this was in the context of her general fitness rather than the emphasising of a particular complaint. I am satisfied on the evidence that had the Claimant felt at that time really concerned about any symptoms she was experiencing, she would have reported that to Dr Pargeter in whom she had great confidence. Taken together however I do not regard the Claimant's account and Dr Pargeter's note as being inconsistent with the Claimant experiencing early symptoms of a feeling of a lack of fitness and inability to run as well as she thought she ought to be able to do, by the beginning of March. The Claimant continued work save for a few days off when she was feeling "a little bit unwell" until her stroke. She was able to do this she told me because of help from her sister and also with great difficulty in carrying on. The Defendants rely upon the fact that she continued at work as being evidence which supported the proposition that she was unlikely to be correct in saying that her symptoms started in February 2009. I am satisfied however that the Claimant, as she described to me in evidence, had to struggle to remain at work. It became increasingly difficult for her to do so and she was only able to do so with the use of a car to get there without having to walk, and with the help of her sister. The evidence clearly established that the Claimant is a stoic. The fact that she would carry on when she was at all able to do so and in general did not complain, could not be better exemplified by the fact that the day after she had her stroke she attended an appointment with the consultant urologist because it had already been arranged. It is the Claimant's nature which explains her ability to continue working rather than the fact that her evidence that she was feeling unwell is incorrect. Both parties rely upon the medical records as assisting in determining the onset of symptoms. The Defendants rely upon the admission note of 29 April 2009 which records one month of pain in the left leg and both calves (D546) and a medical note made on the same day recording the same information (D549). This, the Defendants submit, is consistent with pain in the left leg commencing at the end of March 2009; as it contains no other complaint it fits exactly with the consultation with Dr Moore on 30 March. They also rely upon the hospital entry made on 13 May describing 5 - 6 weeks history of bilateral leg weakness (D477) indicating that the leg pain commenced at about the beginning of April. The fact that the Claimant complained on 13 May of having felt constitutionally unwell for more than one month indicates, the Defendants submit, that she began to feel unwell in or about early to mid April. Mr Richard Partridge on behalf of the Claimant places considerable reliance upon the hospital notes of 13 May 2009 (D476, D477). They demonstrate, he submits, from the history taken from the Claimant and her family, that she had been feeling constitutionally unwell for at least one month; that she had experienced night sweats on most nights since February, having had to change 5 times two nights ago; that she had completed the menopause; that she denied fever but felt cold sometimes; that she suffered from lethargy; that she had had regular headaches since the stoke; that she had 5-6 weeks of bilateral leg weakness; that she had a renal stone one month ago which she passed; that she had had persistent haematuria. Mr Partridge submits that this history taken on 13 May 2009 is contemporaneous, and made without any motive other than one to assist the medical management of the Claimant's condition. There is therefore, he submits, no reason to doubt that she had had night sweats since February, had been feeling constitutionally unwell for over a month, felt cold sometimes, suffered lethargy and had had bilateral leg weakness even though he submitted that it started earlier than 5-6 weeks before 13 May 2009. In so far as the Claimant still relies upon the notes taken by the ambulance crew on 27 April 2009, and the urological notes of 28 April 2009 (though these are not emphasised in closing speeches as they were in evidence) I am satisfied that none of them assist me. I accept the submissions on this issue made by Mr Partridge in his closing written submissions paragraphs 21 – 22. Any history taken on these occasions was in respect of an entirely different presenting complaint, one of collapse and visual disturbance, wrongly diagnosed at the hospital as urinary tract infection when in fact it was a stroke. The hospital notes are also contradictory as Mr Partridge submits. The urological notes were taken for the purpose of the urological examination only as is clear from their face. The notes make no mention of the fact that a previous day the Claimant had suffered severe visual loss together with pounding headaches. I place no reliance upon them. Catherine Sole said in evidence that she was able to identify specific dates of the period between 25 January 2009 and 29 March 2009 because she knew that during that period she was accompanying the Claimant to the Cardiac Rehabilitation Centre in Whitley. The Defendants submit that had the Claimant's exercise tolerance suddenly reduced as she said in evidence that it did, this would have been noticed by the cardiac nurse who would have supervised her rehabilitation. It must therefore be assumed, it is submitted, that the Claimant did not tell the cardiac nurse about her reduction in exercise tolerance and painful legs, as no action was taken which it surely would have been, the Defendants submit, had such symptoms been reported. There is a report from the Rehabilitation Centre dated 12 December 2008 (C389,390) which records that the only problem noted was slightly raised blood pressure. There is however no report with the papers for 2009 and the 2008 report indicates that the rehabilitation started on 1 October 2008 and was completed on 3 December 2008. If there was a further formal rehabilitation course it is surprising that there is no report about that course nor any assessment at its conclusion. Nor is it known whether any rehabilitation the Claimant attended at Whitley in 2009 was subject to monitoring or assessment by a cardiac nurse. It is difficult in the circumstances for any substantial reliance to be placed upon this submission, save insofar as it may throw doubt on Mrs Sole's recollection. The Claimant and her witnesses describe her leg problem starting in February. The Claimant describes returning to jogging in January 2009 and managing two miles or so jogging and walking. She did not however feel that she was improving but she kept going. In February she describes her running stamina as suddenly disappearing and she had to stop after running about 150 yards when her legs were simply not working. Thereafter although she tried to run she had to join the walking group rather than the running group. The Defendants submit that a sudden reduction in running stamina is inconsistent with the indolent infection which it turned out the Claimant had. The Claimant and all her witnesses must be wrong about the leg problem starting in February, the Defendants submit, because the hospital notes support a later commencement at about the very end of March to early April 2009, and because no complaint was made to Dr Pargeter on 3 March. Catherine Sole's description of the Claimant's left leg becoming so painful that she could hardly walk 20 yards before the pain was unbearable by the end of March 2009 was not, the Defendants submit, consistent with the hospital notes or the GP's notes. The flu-like symptoms also cannot have commenced as early as the Claimant said in evidence, the Defendants submit, because the hospital note of 13 May records the Claimant had been feeling constitutionally unwell for more than a month which only takes one back to early to mid April. Furthermore Catherine Sole does not recall flu-like symptoms in themselves. It has to be noted however that flu-like symptoms are variously described by the Claimant or her husband as her feeling "very unwell", and "weak and hot", and "hot and bothered", and" distressed with any form of physical activity". The changes in temperature and feeling unwell therefore were associated with flu-like symptoms and all the witnesses speak as to these problems. It is also the Defendants case that the Claimant cannot have been suffering from night sweats (qualified as drenching night sweats). Miss Mishcon submits that the description of having to remove clothes when going outside to inside is more typical of hot flushes than sweats and states that neither the Claimant nor Mr McCabe said in their witness statement that the night sweats were such as to cause the Claimant to change her night clothes. It was only Catherine Sole who referred to this in her statement. When Mr McCabe did refer to the Claimant having to change her night clothes he said that that happened occasionally and was not sure about dates. The hospital note of 13 May does not, Miss Mishcon submits, record the changing of clothes as having been of a continuing problem only a reference to what had occurred two nights previously. This reference may however be no more than the most recent example of the problem. Nor did the Claimant mention night sweats to Dr Pargeter or to the cardiac nurse. I have considered the evidence of the Claimant and her witnesses, and of the Defendants, the hospital and GP's notes and the Claimant's and the Defendant's submissions, both written and oral, with care. I have borne in mind the risk of the Claimant and her witnesses giving evidence with hindsight, now knowing what they think must have been the case, also the risk that they may simply be mistakenly believing that symptoms started much earlier than they did. Having done so I have come to the clear conclusion that the account of the Claimant and her witnesses as to the onset of the symptoms is in general correct. I am satisfied that the Claimant started jogging and walking again in January 2009 and kept going at it even though she didn't feel she was really improving. Sometime in February it did seem to her that her running stamina suddenly disappeared and she felt as though her legs were just not working. Leg pain developed in the left leg first, and sometime later, by the end of March or early April, was affecting both her legs. I am satisfied that the sweats, day and night, commenced at around the same time in February 2009 and that there after the Claimant became gradually more unwell. By the end of March when she saw Dr Moore she was no longer the energetic dynamo that she had spent most of her life being. I am satisfied from the evidence as a whole that during the period from 30 March 2009 to her stroke on 27 April 2009 she became progressively unwell. This is consistent with her account and that of her witnesses and the likely progression of the organism and its effect upon her. I am satisfied that the Claimant experienced night sweats and that when these were bad they necessitated the change of her night clothes, several times a night. I accept the evidence of the Claimant, her husband, and Catherine Sole on this issue even though the Claimant's witness statement does not refer to having to change her night clothes. The worsening and progression of the condition is clear from the evidence of the Claimant and her witnesses and is also supported by the expert evidence. The changes in haemoglobin indicated, as Professor Masterton said, the chronicity of the condition since February or March, and the growing of the abscess from about the end of March 2009 and the progressive growth of significant vegetation on the aortic valve from the end of March or early April is consistent with progressive deterioration in the Claimant's condition. I am satisfied that her condition was worsening between 30 March and 14 April 2009, hence the need for three consultations with the GPs. I have no doubt that the Claimant's condition continued to worsen as the vegetations and abscess continued to develop after 14 April, but I am satisfied that by that date it had reached a point where the Claimant was very concerned about her health and would, had she been asked questions, have revealed all that concerned her. I accept that throughout the period 30 March to 14 April the Claimant was becoming weaker and lethargic and feeling progressively unwell. The evidence of Mr McCabe, Doreen Wilson and Philippa McCabe satisfied me entirely that by 14 April 2009 the family were extremely worried about her condition. This was of course in contrast to her normally very fit and energetic self, but I have no doubt that she was increasingly unwell during this period. By 6 April 2009 she was clearly unwell, though on this date her underlying condition was masked by what appeared to be a further episode of renal colic. I accept the evidence of Mr McCabe that it was with great relief when it appeared to him and his wife that this was the cause of the problem. The measure of relief was not just because the problem was thought to be colic but because of the extent to which she had been and was then unwell, and the belief that an explanation had been found for that state. For the Claimant to see a GP again, a third time within 14 days is in itself, given her pre-valve replacement condition and attitude towards life, an indication of how she felt. I am satisfied that when she saw Dr Hall on 14 April 2009 she was suffering from leg pains, day and night sweats, feeling unwell, weak and lethargic, flu like symptoms and on occasions feeling cold. I accept the evidence of the Claimant and her witnesses as to her condition, having taken into account any effects which the stroke may have had upon her memory. I found them to be honest and convincing and their account to be essentially consistent with the expert evidence and the medical notes. In particular the notes of 13 May 2009, which are inherently likely to be recording entirely genuine complaints by the Claimant and her family at that time, support her account. Philippa McCabe had good reason to know her mother's condition in mid February, being able to pinpoint it by reference to her leaving home and going to share a house with her boyfriend. The Claimant's sister and Catherine Sole saw her regularly and had detailed knowledge of her condition. I am satisfied they are reliable witnesses with good reason to know the subject they were describing, and to be able to distinguish between early in the year and Spring. (2) What did the Claimant tell each doctor of her condition? (i) Dr Moore - 30 March 2009 There is substantial dispute on this issue between Dr Moore and the Claimant. The Claimant went to see Dr Moore rather than wait for Dr Pargeter's return because, I am satisfied on the evidence, she felt unwell. She was suffering from pain of the left leg by that time and clearly complained of that to Dr Moore. Her recollection is that she told Dr Moore that it was difficult to walk, that she was having sweats as if she had the menopause again even though it had finished years ago, and that she was having flu-like symptoms. She was trying to explain that it was not a running pain or a running injury. Dr Moore however recollected only the left leg being mentioned, he did not recall sweats being mentioned or the menopause. He said that as far as he could recollect in the flow of conversation it did not happen, and he did not know where in such a consultation she could bring in a reference to the menopause. Had sweats been mentioned however he would have to have asked a lot more questions to clarify what she was saying. He knew that sweats were a sign of infective endocarditis in someone with an artificial valve. I have found this a difficult issue to resolve. Dr Moore's evidence upon it was somewhat diffident in parts but his memory was that they talked just about leg pain and his notes revealed nothing else. They certainly talked about the League of Friends as well. It is probable that there was discussion about whether the pain was related to running and it may be that the leg pain and its cause was the centre of the complaint. Furthermore the Claimant's condition was progressively worsening with the abscess on the aorta developing at about that time, and I am not satisfied on the balance of probabilities that the Claimant, a stoical person, would necessarily have voiced all her complaints then rather than at a later stage as they were worsening. What is clear is that the 30 March was about the time when the infective endocarditis was beginning to develop significantly with the growth of an abscess and a considerable number of vegetations growing on the valve. Having considered the relevant evidence I am not satisfied on the balance of probabilities that on this occasion the Claimant brought to Dr Moore's attention any matter other than her difficulties with her left leg and the relationship of that problem to her running. (ii) Dr Fisher – 6 April 2009 The Claimant herself said in evidence that she could remember "not a word" of her conversation with Dr Fisher as she was at the time feeling so unwell. She had told Dr Fisher at the outset about her history of renal colic and clearly felt that her condition was similar to the renal colic she had experienced before and therefore relevant to that. Neither Philippa McCabe nor Doreen Wilson recalls sweating or leg pain being directly reported to Dr Fisher and Dr Fisher's own recollection is that the matters he was informed of were accurately recorded in his notes and that no mention was made of night sweats, flu-like symptoms or any other symptoms consistent with infective endocarditis. If however Dr Fisher had been told that sweats and flushed feelings had been going for some months he would, if the patient was unwell have required acute medical admission. If she was very well he would have instigated blood tests, as endocarditis would have been high on his list. I am satisfied that the Claimant's consultation with Dr Fisher both on the phone and in person dealt with complaints which were consistent with renal colic (whether it was in fact that or emboli) and nothing else. I am clear in the conclusion that no complaints were made by the Claimant of any symptoms such as sweating or flu-like symptoms which were potentially referable to endocarditis. Indeed both the Claimant and her husband were hopeful that renal colic was in fact the answer to the problems she was experiencing. (iii) Dr Hall – 14 April 2009 This was the third occasion in 14 days that the Claimant had attended the Defendant's practice. I'm entirely satisfied that by 14 April 2009 she was suffering from severe pain and difficulty with both of her legs, and was suffering from day and night sweats which had commenced in February and which as far as the night sweats were concerned, caused profuse sweating on occasions sufficient for her to have to change her night clothes several times during the night. She felt weak, had lost energy and was feeling unwell. She could no longer walk far and had to drive instead. The changes in temperature, feeling of weakness and lethargy gave her 'flu like symptoms. She was not aware of having fevers but she certainly suffered from acute temperature changes and reported one month later on 13 May 2009, having felt cold sometimes, which is consistent with having a temperature. As Mr Partridge submits it is not known what the Claimants' temperature was during the time she was experiencing night sweats. The family's hopes that the problem might have been solved because it all turned out to be renal colic, rapidly proved to be incorrect thereby necessitating the further visit to the surgery on 14 April. By that time the Claimant's family were extremely concerned about her wellbeing because of the deterioration in her health. It was against that background that the Claimant made her visit on 14 April. The Claimant said in evidence that she told Dr Hall about her legs, about how she felt in herself, that she was suffering day and night sweats even though she had finished the menopause many years ago, before she was 50, as doing marathons had got rid of it. By this time I am satisfied that the Claimant was feeling sufficiently unwell to feel the need to explain this, in her own rather diffident stoical style, to the GPs. Dr. Hall said in evidence that the Claimant's complaint related to her left leg. She advised Mrs McCabe that she could cease taking the Ciprofloxacin as the urine sample had revealed no growth, and Mrs McCabe herself told Dr Hall that she had stopped taking the Naproxen. Dr Hall examined the Claimant and concluded that although her leg pain was slightly unusual, she could not elicit any serious features on examination and concluded that it was a muscular problem or localised inflammatory reaction. She did not however ask how the leg pain had arisen. There was nothing remarkable with Mrs McCabe's stance or gait when she walked into the surgery, Dr Hall said, and she did not appear to be in any pain to Dr. Hall. Although it does not appear in the notes, Dr Hall said she would have asked her how she was in herself. As Mrs McCabe was sitting up to get off the couch, Dr Hall said that she said "I don't know when these hot flushes are going to end". Dr Hall understood her to mean that her menopausal symptoms had not finished. She did not seek to clarify the statement, nor enquire how long she'd had the hot flushes or indeed ask any other questions. Dr Hall said in evidence that she might have said to the Claimant that it was not unusual for menopause symptoms to carry on for several years and that would have been the opportunity for the Claimant to say 'no, they have stopped many years ago'. In fact, of course, that is precisely what the Claimant said she had told Dr. Hall i.e sweats day and night just like the menopause, even though her menopause had finished many years ago. Dr Hall said that even if sweats had been mentioned, unless there were other symptoms such as fatigue, weight loss or unusual rashes, she would not contact the hospital cardiology department, but would have arranged blood tests. Dr. Coltart and Dr. Brecker, the consultant cardiologists for the Claimant and the Defendant respectively, both stated however that night sweats were indeed a red flag, whereas Dr Hall said that they were only a red flag with other signs. The Claimant did not look like an ill patient and Dr Hall was not thinking of endocarditis at that time but if the Claimant had lacked stamina as well as night sweats, that would have caused her to contact the on-call cardiology team. In fact, as I have found, the Claimant did suffer from lack of stamina at that time. I am satisfied on the basis of the evidence, and having regard to the submissions of both parties, that the Claimant did inform Dr. Hall that she had not merely hot flushes, but sweats day and night. By the time of this consultation on 14 April the Claimant's level of concern about the night sweats which had been continuing since February, had risen to a point where she felt the need to raise it. Not just "hot flushes" but night sweats in particular. The Claimant may, as diffident patients sometimes do, raise the matter with a slight laugh of embarrassment, but raise it, I'm satisfied she did. I prefer her evidence to that of Dr. Hall upon those factual issues. I also conclude that the Claimant did say that her menopause had stopped many years ago and Dr Hall's evidence conceded that in effect that she might have done. I'm also clear in my conclusion on the evidence that the Claimant told Dr Hall that she had problems with both her legs and that by then she did not feel well herself, even if she did not look seriously unwell. 3) What should each doctor have elicited further from the Claimant, if anything, or observed about her state of health Firstly, a general comment on the expert evidence. There was considerable agreement on important issues between both the cardiologists and the microbiologists but less between the GP experts on liability. Each party sought to contend that there were sound reasons for rejecting the whole of the opposing GP experts evidence. I did not however find that a useful approach. Both Dr. McCarthy on behalf of the Claimant and Dr. Barraclough on behalf of the Defendants gave valuable and coherent evidence based on many years of experience of general practice. I concluded that in some respects Dr. McCarthy was correct in his emphasis as in others Dr. Barraclough was, as can be seen from the following parts of the Judgment. (i) Dr Moore I have found that the consultation with Dr Moore referred solely to the Claimant's leg and her ability to run and did not involve the Claimant revealing or discussing her other symptoms. Nor did Dr Moore ask any questions which might have revealed the further symptoms which were then present but which had not progressed to the stage they had reached some two weeks later on 14 April. Dr McCarthy expressed the view in evidence that as Dr Moore did not reach a clear diagnosis on the leg pain, he was faced with an unexplained illness together with a patient that had an artificial heart valve who was therefore a risk. He should therefore, at the very least, have asked her how she was feeling. If she was not feeling well he should have asked her to return to see him in a week and in the meantime have ordered blood tests. Dr Moore should, Dr McCarthy said, have appreciated that the differential diagnosis was an inflammatory cause or mechanical cause and if it might be the former, that, with an artificial valve would have raised risks, hence the need to seek to make a diagnosis and if unable to do so, carry out blood tests. Dr Moore said in his witness statement and in evidence that he considered that the leg pain of which the Claimant complained was probably sciatic in nature, as far as the shooting pain down the side of the foot was concerned even though he had not recorded this in his notes. He said in evidence that although he hadn't recorded it, he was pretty certain of his diagnosis, "to some degree". Dr. Barraclough said in evidence that he thought that the shooting pain down the leg was probably sciatic in nature and that this would have been his interpretation. He did not refer to the pain as being sciatic in his medical reports. Dr Moore's notes do not refer to sciatic pain but describe the pain as "odd" and state that there was "no clear cause". Furthermore at the significant events meeting in August with his fellow GPs, the description of the leg pain was "peculiar" rather than sciatic. Dr. Barraclough could think of no general inflammatory condition which could cause such leg symptoms plausibly. The presence of leg pain, an extremely common feature presenting to any GP, would not require the GP to ask other more general questions about a patient's health, even where there had been aortic valve replacements. There are many patients with heart conditions, stents or similar surgical interventions and it would not be realistic to expect any such patient who presented with a leg pain to be asked questions either relevant to endocarditis or generally. Some GPs may consider general malaise even where the only complaint was of leg pain. But others would not and Dr. Barraclough expressed the view it was not mandatory for them to do so in such circumstances. There had to be something more than the complaint of leg pain which Mrs McCabe made before there would be any duty upon the GP to ask further questions. Dr. Moore did not ask questions relating to anything other than the leg complaint, the worst part of the pain of which had resolved within 24 hours on his understanding. His approach was "wait and see" and review the Claimant later. Whilst I understand Dr McCarthy's approach, and consider that it is arguable, I prefer Dr Barraclough's evidence upon this issue. The leg pain as recorded in the notes had apparently substantially resolved and in the absence of any other complaints his approach of waiting and seeing and reviewing was appropriate without further questions being asked of the patient. Had such questions been asked further information would indeed have been revealed as to sweats and 'flu like symptoms. Nevertheless on the basis of the leg pain which I have found was the only complaint made on this occasion, I do not think it was incumbent on Dr Moore to ask the Claimant additional questions. Whilst some GPs might have asked about general malaise where there was leg pain only being complained of, I do not think that it was mandatory for a GP to do so in such circumstances. To wait and see and review was an appropriate course of action. The question also arises as to the appearance of the Claimant on that day and whether this should have alerted Dr. Moore to anything more suspicious about her general condition. Dr. Moore said in his evidence that he could hear that the Claimant did not struggle up the steep stairs to his consulting room and that she did not appear to be very unwell or sweating. The Claimant did not disagree that she was able to mount the stairs, though hearing a patient do so without tripping or falling or going very slowly is a somewhat blunt instrument for determining whether such a patient's walking ability had become restricted. There is however no evidence that the Claimant looked or appeared very unwell on that date, such as to require Dr. Moore to probe into her health further. ii) Dr Fisher The consultation with Dr. Fisher centred on renal colic and as I have found, he was not informed of the Claimant's leg pains or sweats or any other symptoms consistent with endocarditis. Neither Dr. McCarthy nor Dr. Barraclough suggest that he should in the circumstances of what he was presented with have asked any further questions. Nor is it suggested that the Claimant's general condition would have raised to him issues other than those concerned with renal colic. He was therefore under no obligation to ask any further questions. iii) Dr Hall I have found that the Claimant told Dr. Hall that she was experiencing day and night sweats like the menopause but that that had finished many years ago, and that she felt unwell, in addition to complaining of pain in both legs. In the joint statement, Dr. McCarthy and Dr. Barraclough agreed that had such facts been placed before the GP it was mandatory for her to consider infective endocarditis. It follows that further questions should then have been asked which would have revealed that the sweats had lasted since February, that they included night sweats, that these sometimes required the Claimant to change her nightclothes more than once a night, that she felt weak, lethargic and generally unwell. Once night sweats, many years post menopause, weakness and lethargy and feeling unwell were raised, the extent of these problems had to be explored and elaborated. Night sweats in themselves are regarded by both Dr Coltart and Dr Brecker as raising "red flag" signs. Even if the Claimant had not volunteered that she had been experiencing night sweats but had only referred to "hot flushes", I would have remained of the view that that information needed to be further explored and elaborated. I am satisfied in any event on the evidence of the Claimant and Dr. Hall that the Claimant did inform the doctor that her menopause had in fact ceased many years ago. The combination of these two pieces of information, namely hot flushes and the cessation of the menopause many years ago, rendered it essential that further questions were asked. The reference to night sweats alone should cause the doctor to think of endocarditis, Dr Barraclough said, and the addition of the information that that could not be or was unlikely to be due to the menopause as it had ceased many years ago, would necessitate further questions. It was not sufficient for Dr. Hall to fail to clarify those statements. When did the menopause stop? How often did the night sweats occur? Did they involve and if so how often the necessity to change nightclothes once or more during the night? How did the Claimant feel? Once the risk of endocarditis in a patient was raised, as it would have been by the Claimant's reference to the hot flushes and the cessation of the menopause, the matter needed to be explored. Once the Claimant had volunteered the fact that her menopause had ceased many years ago and at the age of about 48, and that she had not had sweats before February of that year, the thought in the doctor's mind that many women continue to suffer from sweating after the menopause had apparently ceased would be of little weight. The GP would be left with unexplained night sweats, the menopause having ceased many years ago, and a patient with an aortic valve replacement with the risk of endocarditis. In any event as Dr. Barraclough said in evidence it would be incumbent on the doctor to ask further questions, if the patient was anxious about the matter. It seems probable that the Claimant raised the matter, albeit in a diffident and somewhat embarrassed way with a slight laugh, because she was anxious about it. The fact that she added that her menopause had ceased, demonstrated more clearly her anxiety because it showed that she had thought about the menopause but considered that it might not be relevant because it had stopped. The fact that the patient had volunteered the matter, and did so at a time apparently unconnected with any other part of the examination or consultation, would it seems to me in itself give rise to an inference that the patient may be anxious or concerned about the matter. I find it a fact the Claimant did raise it because she was concerned. Dr. Barraclough expressed the opinion that the volunteering of information as to hot flushes would be important information whenever it was made in the consultation and needed careful consideration, particularly in a patient with a replacement valve. The term "hot flushes" could mean sweats, whether day or night, but even so he said that only some doctors would ask further questions in such circumstances. In fact Miss Mishcon relied not merely on Dr. Barracloughs evidence on this issue but also that of Dr. Brecker, the Defendant's cardiologist. In the course of his evidence, in answer to questions from the court, Dr. Brecker volunteered the view that as a cardiologist he wouldn't ask further questions if told that a patient had hot flushes, as it is such a common symptom. He would however ask about HRT and similar questions. Dr. Brecker was expressing this opinion as a cardiologist not as an expert GP on the issue of liability. Furthermore as Mr Partridge points out when he sees a patient it is usually the case that a preliminary diagnosis will have already been made. Dr. Brecker's situation as a cardiologist is quite different to that of the GP facing a patient with an aortic valve replacement who was visiting for the third time in 14 days with unexplained or unusual leg pains and an anxiety about hot flushes, and feeling weak lethargic and unwell. I find the evidence of Dr. McCarthy and Dr. Barraclough to be more important on this topic. Furthermore I have found that the Claimant raised the issue of night sweats specifically and the fact that her menopause had ceased. This was not the situation being envisaged by Dr. Brecker. It is to be noted that in any event Dr. Brecker would have asked the patient questions about HRT which would probably on the facts of this case have resulted in him learning that the menopause had in fact ceased many years ago. I conclude that once the Claimant had mentioned night sweats and the cessation of the menopause, as I find that she did, further questions should have been asked to ascertain the seriousness of the problem in a patient who had had an artificial valve replacement. I accept Dr. McCarthy's evidence on this issue that even if the words "hot flushes" had been used, those words themselves implied a continuing problem, especially as from Dr. Hall's account the Claimant added "when are they going to end?" Even on the basis of that information, further questions should have been asked and they too would have lead to the information that the Claimant was unwell. On the basis of my findings of fact therefore, I am clear in the conclusion that Dr. Hall was under a duty to ask further questions of the Claimant in order to ascertain what the problem was that she was referring to, and that even on the basis of Dr. Hall's own account, further questions should have been asked. By 14 April 2014 I am satisfied that the Claimant felt genuinely unwell. Dr. Hall considered that the Claimant did not look unwell, but patients present themselves in a very different manner according to their personalities and we know that the Claimant was a very stoical uncomplaining woman. I do not find that there was anything about the Claimant's appearance in itself at the time which should have driven Dr. Hall to ask further questions, but I am equally satisfied that her appearance should not in any way have prevented the questions which arose and should have been asked, from being asked. 4) What action should have been taken on the information which was or should have been before the doctors? Dr Moore Upon my findings of fact, there is no further action which Dr Moore should have taken after his consultation other than that which he did, namely wait and see and review. Dr Fisher Dr Fisher was under no duty to take any further step upon my findings of fact. The Claimant does not pursue a case against him, if I find, as I have, that the Claimant did not report to him any symptoms of night sweating or any symptoms requiring further questions or actions to be taken. Dr Hall Once the Claimant had volunteered that she was having day and night sweats and that her menopause had ceased years ago the questions which it was then incumbent on Dr Hall to ask would have revealed all the issues which were causing the Claimant serious concern at that time. These were her severe pain in both legs her difficulties in walking any distance, night sweats since February which when serious caused her to have to change her night clothes two or three times a night, weakness and lethargy and feeling cold sometimes. She would, I am satisfied, have told Dr Hall, if asked the appropriate questions, that she felt that her symptoms were flu like, that she was unwell and had been for some time. It is agreed between Dr McCarthy and Dr Barraclough that if such information had been given, it was mandatory for a GP to consider infective endocarditis, perform basic blood tests, and refer the Claimant to hospital. In answer to the further question under the joint statement, Dr Barraclough said that if the Claimant had been febrile with weight loss as well as night sweats and flu like symptoms and a new heart murmur then he considered a General Practitioner would have admitted her to hospital that day. In this answer Dr Barraclough was adding additional qualifications such as fever, weight loss and heart murmur which he had not raised before but which Dr Brecker had raised in his evidence. It became clear however during the course of the evidence that the view of both the cardiologists and the GP experts was that the key was whether the Claimant was constitutionally well or not. Dr Brecker said that if she had no fever, no rash and was well he wouldn't send her into hospital that afternoon but if she was unwell with significant night sweats "we would want to see her within 24 hours" he said. Dr Coltart said that if the GP had phoned him up and said that he had an unwell patient with an artificial valve who had had night sweats since February but had finished her menopause, had no rigors, but persistent hematuria he would have been extremely bothered and would have admitted her to hospital that Friday or even on the Sunday. Dr Barraclough said that if the Claimant gave a history as set out in the hospital notes of 13.5.2009 (D476), which I have found on the facts that she did, that would be significant. He would examine her to see if she had a heart murmur, send her urine for analysis and if she seemed well would have her blood tested for inflammatory markers, but if she was unwell he would admit her to hospital. Miss Mishcon accepts in paragraph 104 of her final written submissions that it was common ground that if the Court should find that the Claimant had told Dr Hall that she was suffering from night sweats, reduced exercise tolerance, flu like symptoms and was systematically unwell, immediate referral to hospital was mandatory. The same concession must apply if that information should have been and would have been elicited, which I have found is the case. I am satisfied that the evidence does indeed support such a conclusion. I conclude that Dr Hall, on hearing the information volunteered by the Claimant as to night sweats and the cessation of her menopause and asked the necessary questions and obtained the answers, was under a duty to refer the Claimant to hospital immediately either later that same day on 14 April or the following morning of 15 April. (5) Has a breach of duty been established? The duty of the doctor is to act with the ordinary skill of an ordinary competent medical practitioner carrying out the consultation in question. A doctor is not negligent if he acts in accordance with a practice accepted at the time as proper by a responsible body of medical opinion even though other doctors adopt a different practice. (Bolam v Friern Hospital management Committee (1957) 1 WLR 582 and Sidaway v Governors of Bethlem Royal Hospital (1985) AC 871.) No breach of duty has been established upon my findings by either Dr Moore or Dr Fisher. I am satisfied on the evidence that Mrs McCabe told Dr Hall that she had been experiencing day and night sweats, that she specifically used the words "sweats" not merely "hot flushes" as these were a very real concern to her at that time. Furthermore they had been continuing since February and her condition had been worsening during April hence her third visit to the doctors in 14 days. I am also satisfied, not simply on the evidence of the Claimant herself, but also on the evidence of Dr Hall, that the Claimant told Dr Hall that her menopause had finished many years ago. Dr Hall understood the Claimant to be saying that her symptoms had not finished, though accepted that she might have said to the Claimant that it was not unusual to carry on with the menopause for several years which would have given the Claimant the opportunity to say her menopause had stopped many years ago. Dr Hall therefore misunderstood what the Claimant had told her, asked no questions about it and in no way sought to clarify it. She accepted in evidence that she had not been considering endocarditis as when she thought the Claimant had raised them as "hot flushes" she took them to be the menopause lasting on for a number of years. The statement which I find the Claimant in fact made to her, namely that she had been suffering from day and night sweats but her menopause had finished many years ago, showed that the Claimant was anxious about this matter even if she raised it with embarrassed diffidence. Her concern appeared to be from what she said that she could not understand, which was why she was still experiencing day and night sweats when her menopause had in fact finished. The statement which the Claimant made to Dr Hall could not on any basis have properly reassured Dr Hall that the Claimant was still experiencing menopausal symptoms. That very issue was questioned rather than confirmed by what the Claimant was saying. The information which the Claimant gave to Dr Hall was of particular importance in a patient with an artificial valve replacement. The Oxford Handbook of General Practice states in its section on infective endocarditis that the presentation, which may be over days or weeks, includes fever, weight loss, night sweats, malaise, lethargy and anaemia. Under Management it is stated "have a high index of suspicion for patients at ... risk i.e. with valve lesions or prosthetic valves. Admit as an emergency if suspected." It is accepted by the experts that the Oxford Handbook sets out what a GP should understand. It is further agreed between the expert cardiologists that night sweats themselves amount to a "red flag". Once Dr Hall was aware of the existence of night sweats and that the menopause had ceased many years earlier she should have been aware of the risk of an endocarditis in a patient with an artificial valve, and asked further questions and elaborated what Mrs McCabe said to her. She was in breach of duty in failing to do so. She was not entitled to assume that the Claimant was referring to continuing symptoms of the menopause, when the Claimant had thrown doubt upon that by stating that her menopause had ceased many years before. I emphasise that there is no duty upon a GP in such circumstances to know of or recognise the rare organism which in fact the Claimant had, nor the precise mechanism or timing of the endocarditis; what a GP should have been aware of was the risk factors relevant to endocarditis in a patient with an artificial valve. Once the further information about the Claimant's condition which was available on 14 April had been obtained the suspicion of endocarditis would have been seriously raised and, as is agreed between the parties there should have been an admission to hospital. I therefore find that the Third Defendant was in breach of duty in failing to appreciate the significance of what the Claimant had in fact told her, that it raised a red flag in a patient with an artificial valve, and required elaboration. That elaboration should have resulted in admission to hospital because of the Claimant's condition at that time. The failure to elaborate and admit were therefore equally breaches of duty. Even if the Claimant had referred to "hot flushes" rather than "day and night sweats" I would still have found the breach of duty because of the fact that in addition I am satisfied that the Claimant did say to Dr Hall that her menopause had ceased many years ago. The assumption which Dr Barraclough, and indeed Dr Brecker, thought permissible, i.e. that the complaint was due to a condition common in women of that age, namely the menopause continuing, was not open to the GP. The very information which the Claimant had given made it unlikely or at least doubtful that the complaint was attributable to the continuing menopause. As "hot flushes" can, as Dr Hall said in evidence, include profuse sweating, and as the GP experts said, can include both day and night sweats, further elaboration of what the Claimant said was required and the failure in the circumstances of an artificial valve to ask such an elaboration was a breach of duty. (6) Causation I am satisfied on the evidence of Dr Coltart and Dr Brecker that if a cardiologist had been contacted by the GP and informed that there was a patient with an artificial heart valve who suffered from persistent night sweats which when severe caused night clothes to be changed several times a night, that the menopause had finished many years ago, that there was weakness, lethargy, reduced walking, flu like symptoms, that she felt constitutionally unwell and had persistent hematuria, that patient would have been admitted to hospital within 24 hours. As both Dr Brecker and Dr Coltart said in evidence the key was whether the Claimant was unwell. I note that Dr Fisher said in evidence that if a patient with these symptoms was unwell he would have arranged an acute medical admission. Both Dr McCarthy and Dr Barraclough accepted that in such circumstances the Claimant should have been referred to hospital immediately i.e. not later than 24 hours. It is probable therefore that had the correct information been elicited the Claimant would have been referred to hospital on 14 April or 15 April 2009. Once admitted with these symptoms I am satisfied on the evidence of the cardiologists that investigations would have been started as soon as possible. These would have included blood tests if not already done before the Claimant left the GP's surgery, blood cultures and echocardiography. Given the results of the blood tests on 27 April 2009 which were marginally abnormal, tests on 14 April or 15 April 2009 may well have been less so. They would on the evidence of Dr Gant and Professor Masterton however have been abnormal with the haemoglobin lower than it should have been and the CRP raised. As Professor Masterton said these would have been markers of ongoing infection. After the blood cultures had been taken a trans-thoracic echocardiogram would have been performed. Dr Coltart considers that by 14 April a trans- thoracic echocardiogram, which is mandatory with a replacement aortic valve, would have revealed the abscess and infection of the valve on the balance of probabilities. Dr Brecker thought that there was a 20-40% chance of the trans-thoracic echocardiogram picking up the vegetation on the valve. Both are agreed that a trans-oesophageal echocardiogram would have been performed either the same day on Dr Coltart's evidence or within one day on Dr Brecker's evidence, with an admitted patient with these symptoms. Both Dr Coltart and Dr Brecker expect that the trans-oesophageal echocardiogram would have shown the infected valve because of the size of the vegetations which were significant and the development of the abscess. They are both clear that these would have been developed and apparent by 14 April 2009. Ideally, the cardiologists would wait until the results of the blood cultures before commencing antibiotics but much would depend upon whether the diagnosis of infective endocarditis was definite. On the evidence of Dr Brecker and Dr Coltart I am satisfied that a trans oesophageal echocardiogram on 15 or 16 April 2009 would have shown the existence of infective endocarditis and therefore raised the need for it to be treated. As Dr Brecker said in evidence, you would not wish to delay unnecessarily and if in fact you found vegetations on the valve then the diagnosis would be definite and on taking blood cultures one would be compelled to start antibiotics. This view was shared by Dr Coltart. Provided blood cultures were taken before antibiotics were started it would, according to both cardiologists be possible to adjust the antibiotics as necessary when the results of the blood cultures came back. I am satisfied on the expert evidence of both the microbiologists, Dr Gant and Professor Masterton, and the cardiologists, Dr Coltart and Dr Brecker, that suitable antibiotics would have been commenced before 20 April 2009. This would have been sufficient to halt the infective process until the blood cultures revealed whether the antibiotics needed to be adjusted when the specific organism could have been targeted. The giving of a general antibiotic before 20 April would, on the basis of the expert evidence, have prevented the stroke. The Claimant has therefore established the issue of causation. Conclusions The Claimant succeeds in her claim against the Third Defendant on the issue of liability and quantum but fails against both the First and Second Defendants. On 14 April 2009 I am satisfied that the Claimant informed Dr Hall that she was suffering from pain in both legs, and from day and night sweats but that her menopause had ceased many years ago. This information, in the case of a patient with an artificial aortic valve, should have raised a red flag in Dr Hall's mind. It did not however, as it should have done, raise the possibility of infective endocarditis, and she therefore asked no questions but made the assumption that the complaint was a throw away remark and related to the continuing menopause. In fact what the Claimant had said to Dr Hall should have alerted her that it did not appear to be due to continuing menopause as this had ceased many years ago and that necessitated, in a patient with an aortic valve replacement, further questions. Such questions would have revealed the Claimant's condition at that time which would have resulted in her immediate admission to hospital. Dr Hall's failure to appreciate what the Claimant was saying to her and her failure to elaborate what was said amounts in the circumstances to a breach of duty. The Claimant has also succeeded on the issue of causation and her claim therefore succeeds. There will accordingly judgment for the Claimant against the Third Defendant for damages and her claim against the First and Second Defendants will be dismissed.

LORD JUSTICE SEDLEY: Mr McManus applies for permission to appeal in two distinct cases which he has brought, without success, before Blofeld J in the Administrative Court seeking permission to apply for judicial review. The first case concerns the limitation of the amount which the Assisted Prison Visits Unit was prepared to allow him in order to visit his son in prison. Mr McManus first queries whether he needs permission to appeal. At one point he may have been mistakenly advised that he did not. Part 52 paragraph 15.1 of the Civil Procedure Rules makes it clear that permission to appeal is needed, so he is in the right court making the right application today. Mr McManus submitted to Blofeld J that the allowance of 11 pence per mile for the 148 mile round-trip, together with £2.55 subsistence, is an inadequate amount. Its result, said Mr McManus was that his human rights, in particular the right to respect for family life under Article 8 of the Convention, were being interfered with. I have no difficulty with the proposition that visiting a son in prison is an aspect of family life. Nor, therefore, do I have any difficulty with the argument that, for example, an unwarranted ban on such visits might be a breach of that right. The issue becomes more difficult, however, when it is how much state assistance should be provided to enable family members to make the journey. Much more is required in the way of evidence if such a case is to have any hope of success than the assertion that 11 pence per mile is not enough, even when that is backed, as it was in this case, by the unit's own admission that its mileage allowance cannot always keep pace with rises in the price of fuel. As Mr McManus will know, there is at least one organisation concerned with the well-being and rights of prisoners' families which may well be lobbying on these issues and may be able to give Mr McManus advice or help. Blofeld J, in refusing Mr McManus permission to apply for judicial review, not only came to the correct conclusion that the application could not succeed, but also saved him from a potentially very heavy bill of costs when, as was inevitable, he eventually found himself losing the claim against a represented party. I would not be doing Mr McManus any more of a favour if I were to grant him permission to appeal, because he would again face a heavy bill of costs. At the moment he is not incurring any such costs. Mr McManus has informed me that his application has nothing to do with any of the matters which were canvassed before Blofeld J. He says it relates to his right to an independent and impartial tribunal and to reasons for decisions. I see nothing in the history of the case which suggests that he did not have in Blofeld J an independent and impartial tribunal or that he did not receive good and adequate reasons from the learned judge. In my view, there seems to me no ground for appeal. I turn to Mr McManus' second application against the Social Security Commissioner. Here, too, Blofeld J refused permission to seek judicial review. Permission to appeal is required. Mr McManus sought a disability living allowance on the ground that he was virtually unable to walk. The Disability Appeal Tribunal rejected this on the basis of the opinion of an examining medical practitioner which the tribunal accepted in preference to Mr McManus' own evidence about his own condition. The Social Security Commissioner refused permission to appeal, holding that there was no arguable error of law in the light of the facts which the tribunal had permissibly found. Instead, therefore, Mr McManus has sought judicial review of the tribunal itself, alleging partiality and irrationality in its decision and also alleging, by way of procedural impropriety, that the tribunal ought to have consulted an independent cardiologist. He also submits that both the tribunal and the Commissioner breached the European Convention on Human Rights by failing to give their decisions in public. Before the judge Mr McManus argued that, since the Secretary of State was unrepresented, the appeal should have been allowed without more. That is not the law and I hope it never will be. Adjudication is not a game of forfeits. [Tipstaff removed Mr McManus from court due to interruptions] The tribunal's job was to decide what entitlement, if any, Mr McManus had on the evidence. That evidence included the opinion of an independent doctor. The tribunal were fully entitled to obtain it, and whether they preferred that opinion or Mr McManus' evidence was for their expert judgment. They accepted that he had medical problems but not that they were bad enough to bring him within the entitlement he claimed. Indeed his mobility in walking out of court just now demonstrates that the tribunal was right in rejecting his contention that he could barely walk. Mr McManus can not only very adequately walk, he can very adequately talk. There was nothing unreasonable about the decision, however unwelcome it was to Mr McManus, nor was there anything demonstrably wrong with the failure to consult a cardiologist, assuming (and I have seen nothing to substantiate this) that they were invited by Mr McManus to consult one. I am not persuaded that there is any arguable breach of Article 6 of the Convention in the absence of a public delivery of judgment by the Disability Appeal Tribunal and the Commissioner. Their decisions are on public record and that, it seems to me, is quite sufficient. For that reason, these applications are refused. Order: Applications refused.