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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> BT3G Ltd & Ors, R (on the application of) v Secretary Of State For Trade & Industry [2001] EWCA Civ 684 (11 April 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/684.html Cite as: [2001] EWCA Civ 684

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IN THE HIGH COURT OF JUSTICE
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(Mr Justice Silber)

		Royal Courts of Justice, The Strand, London WC2A 2LL Wednesday, 11th April 2001

Wednesday, 11th April 2001

1. LORD JUSTICE LAWS: This is a directions hearing in a forthcoming appeal. Only one question falls for decision. It is whether Vodafone are entitled to or should be allowed to participate in the appeal.
2. The appeal is brought by two appellants, One 2 One and BT3G, against a decision of Silber J given in the Administrative Court on 21st December 2000. The issues were complex and Silber J's judgment is long, careful and detailed, but for present purposes I may summarise the subject matter very briefly indeed.
3. The context is the well-known auction conducted by Her Majesty's Government of licences for what is called the third generation of mobile phones. The Secretary of State, as I understand it, arrived at a decision by which he allowed Vodafone, one of the winners at the auction, to pay its third generation licence fees later in time than the other two, One 2 One and BT3G. That decision was the subject of the proceedings before Silber J, which, as I understand it, went both by way of judicial review and by way of a statutory appeal. Although, as I have said, the matters were complex, two essential points were taken against the Secretary of State. One was that his decision was irrational in conventional domestic law terms; and the second was that his decision violated Article 87 of the EEC treaty as involving the grant of unlawful state aid. The applications to Silber J were lost. The Secretary of State was successful. The only relief sought in the proceedings was as against the Secretary of State, but it is right that Vodafone participated, in effect throughout, certainly throughout the hearing before Silber J in the first instance proceedings. I have been shown a letter indicating that they were served as a matter of courtesy. One of the issues canvassed before me is whether they were at that stage in some formal legal sense a party or not. I will return to that briefly.
4. After the judgment had been given and notices of appeal duly launched by One 2 One and BT3G, Vodafone found that they were not served with the notices of appeal or the skeleton arguments (whenever they came to be produced). Accordingly, they made an application which went before Master Venne. Master Venne, having regard to a decision of Sedley J (as he then was) in Regina v Licensing Authority ex parte Generics UK 10th October 1996, held that Vodafone were entitled to appear on the appeal.
5. Sedley J, in the context of an argument about costs, had held that there was no material difference between a party directly affected within the meaning of Order 53 rule 5(3) and a party who was a proper person to be heard within the meaning of Order 53 rule 9(1). BT3G and One 2 One complain about Master Venne's decision.
6. The matter comes before me pursuant to Part 52 of the CPR rule 16.5, which provides:

"A party may request any decision of a court officer to be reviewed by the Court of Appeal."

7. There was some suggestion at one stage that a point might be taken that Master Venne's decision was final could not be set aside by myself. But that has not, as I understand it, been persisted in, and rightly so.
8. After the hearing before Silber J there was an argument about Vodafone's costs. Vodafone applied for their costs. The Secretary of State having been supported by Vodafone has of course been successful, as I have said. Vodafone relied on a decision of their Lordships' House, Bolton Metropolitan District Council v Secretary of State for the Environment and Manchester Ship Canal [1995] 1 WLR 1176, in which Lord Lloyd of Berwick set out certain principles relating to costs which, with great respect, I think I need not replicate. Silber J, giving judgment on the costs issue, said this:

"The approach set out in the Bolton case has led me to the conclusion that, although Mr Green" [Vodafone's counsel] "made a number of very helpful and useful submissions during the substantive hearing, for which I am grateful, he cannot show that there was or was ever likely to be a separate issue on which he was entitled to be heard, in the sense of being an issue not covered by the Secretary of State. Vodafone had an identical interest with the Secretary of State, which was to show that there was no state aid in this case and that the decisions of the Secretary of State could not be impugned on public law grounds. The arguments of both Vodafone and the Secretary of State put forward were very similar and all to the same end. It could not be shown or suggested that there was ever even a possibility that the Secretary of State would make a concession which would in some way embarrass Vodafone in this case. Vodafone had no reason to believe that the eminent counsel for the Secretary of State would not put forward all available arguments. So I do not believe that there was an issue put forward by Vodafone which was not covered by the Secretary of State or which might even possibly require separate representation."

9. It is said by Mr Gordon for BT3G, supported by Mr Brealey for One 2 One, that this reasoning really gives the clue to the merits of the present application. It was right at first instance that there was no separate issue which should or would be canvassed by Vodafone beyond what was dealt with by the Secretary of State; and the same will be true in the Court of Appeal. It is asserted also that Vodafone cannot be affected by the result of the appeal, or at least cannot be so affected other than on a fanciful basis.
10. In relation to that last proposition, a good deal of emphasis has been placed upon an agreement reached between the Secretary of State and each of the appellants, so I understand it. I have only seen the text relating to BT3G. The agreement was arrived at in the context of a disposal by consent of matters concerning the appellants' applications for interim relief at first instance. I have a letter dated 11th May 2000 from BT3G's solicitors to the Treasury Solicitor. I need only read the following:

"... the Secretary of State will" [in certain events that are then set out] "... so exercise his power under regulation 5 of the Wireless Telegraphy (Third Generation Licences) Regulations 1999 that he will refund to your client an amount equal to interest upon the Licence Fee payable by your client under the Notice calculated at a reasonable rate of interest, having regard to market rates and not exceeding the rate or rates actually paid by your client, for the period beginning on the day on which that Fee is paid to the Secretary of State in accordance with the Notice and ending on the day before the day on whichever of the events referred to in (c) above" [which I need not read out] "last occurs.

This offer is without prejudice to the resolution of any of the other issues (whether procedural or substantive) raised in these proceedings and subject to any order, direction or other relief which the Court may hereafter make or grant."

11. Stripped of the careful and technical language in which that agreement is expressed, what it amounts to is this. If the Secretary of State were to lose the case, then he would, so to speak, level up BT3G and One 2 One in financial terms so as to be in an equivalent position to that preferentially occupied by Vodafone rather than level Vodafone down. Hence, it is said that Vodafone has nothing to fear. The quantum of its fees for the licence granted to it are unaffected. Mr Green submits that that is by no means the end of the matter. There is at least a possible scenario by which Vodafone may be required to repay sums to the Secretary of State on the footing that they were in receipt of unlawful state aid contrary to Article 87. He draws attention to those last words in the written agreement which I have already set out, they being the without prejudice words. The submission, put very shortly, is that a state of affairs could arise in which the Secretary of State's action would be condemned as being in breach of the EEC treaty for reasons which would require the Secretary of State, or might require him, to cause Vodafone to make repayment. That might arise, says Mr Green, if there were a finding against the Secretary of State that no reasonable private investor would have accorded the grace or treatment to Vodafone in notionally parallel circumstances to that which Vodafone received from the Secretary of State. It is protested by Mr Gordon that that is not the way the case is put against the Secretary of State. I do not think it appropriate for me to travel any distance into such matters, which will be for the full court hearing the appeal if they surface at all.
12. Mr Lewis, who appears for the Secretary of State before me today and makes no submission as to the merits of Vodafone's joinder in the appeal, indicates to me that his client's perception is that whilst such an outcome is extremely unlikely it is a more than fanciful possibility.
13. Mr Green also draws my attention to a decision of the European Court of Justice, Compagnie francaise de l'azote (Cofaz) SA and Others v Commission of the European Communities ("Cofaz") ECR 391. That was also a state aid case in which a party sought to intervene. I do not go to it in any detail. It is enough to say that in paragraphs 28 and 29 of the judgment the Court of Justice, acceding to the application to intervene, plainly considered that the market interest of Cofaz as a competitor was at the least a material consideration in deciding whether intervention should be allowed. Of course, Vodafone is a competitor here. Indeed, Vodafone is the very recipient of the sums condemned as unlawful state aid.
14. In all these circumstances it seems to me to be right that Vodafone should be allowed to be present by counsel at the hearing of the appeal, which I understand is fixed for 18th June. They should be served, if they have not already been so served, with the notices of appeal of the appellants and all the other parties' skeleton arguments and they should be free to put in a skeleton argument themselves.
15. Mr Gordon submits I should put Vodafone on strict terms essentially in two respects. First, he says that I should make an order that they will bear their own costs in any event; secondly, he says that I should make a further order or direction limiting Vodafone to participation in the oral argument to the tune of one hour only and requiring them only to deal with such issues as they properly identify, being issues separate from those that will be advanced by the Secretary of State. I am afraid I do not think it right to make those orders. It goes without saying, with respect, that were the court hearing the appeal to perceive that any court time was being wasted or unnecessarily spent by Vodafone, they would have ample means of applying appropriate sanctions. I, for my part, will not do so.
16. There remains the technical question whether Vodafone are in truth a respondent to this appeal as of right or will be at the appeal hearing only by virtue of the exercise of my discretion in their favour. Since I have ruled that they should be allowed to appear, the question is moot and I would not spend more than a moment or two upon it.
17. It is to be noticed that Part 52 rule 1(3)(e) of the Civil Procedure Rules defines "respondent" as:

"(i)a person other than the appellant who was a party to the proceedings in the lower court and who is affected by the appeal; and

(ii)a person who is permitted by the appeal court to be a party to the appeal".

18. Mr Green says he is a party under (e)(i). He refers to the definition of "party" in section 151(1) of the Supreme Court Act 1981:

"`party', in relation to any proceedings, includes any person who pursuant to or by virtue of rules of court or any other statutory provision has been served with notice of, or has intervened in, those proceedings".

19. Mr Green says he was before the first instance court by virtue of rules of court, whether that be Order 53 rule 5(3) or Order 53 rule 9(1). Without purporting to make any definitive decision about the matter, I should have thought that a person or a corporation served with judicial review proceedings as a matter of courtesy and thereafter appearing with the judge's permission is not to be treated as a person served or having intervened by virtue of rules of court or any other statutory provision. I consider that the better view in this case is that Mr Green's clients require my permission to be before the Court of Appeal. I have, of course, granted that permission.
20. As a footnote to this part of the case, I have already said that Master Venne relied on the decision of Sedley J in ex parte Generics as indicating that in his view there was no material distinction for the purposes of rights of appeal between Order 53 rule 5(3) and Order 53 rule 9(1). Sedley J was, with respect, arriving at his decision without having had cited to him the decision of their Lordships' House in Muldoon [1996] 1 WLR 1103 in which Lord Keith indicated that a person directly affected within Order 53 rule 5(3) is a person who would be affected by the judicial review decision without the intervention of any intermediate agency. The quality of participation by a party appearing under Order 53 rule 9(1) is indeed different from that of a party appearing under Order 53 rule 5(3). There are also dicta in a 1988 decision of this court in R v The Licencing Authority ex parte Smith Kline & French Laboratories Ltd & Others, not least this sentence from Dillon LJ:

"The interest of the interveners here is commercial, as in the Farbenindustrie case. As it seems to me, it must be in the discretion of this court whether they are to be heard at all, as it was in the discretion of the court below."

21. As I have said, I consider that the better view is that Mr Green's clients need the court's permission, but I do not purport to make any final or definitive determination upon such matters as the correct construction of section 151 of the 1981 Act.
22. In the result, however, I direct that Vodafone may participate as a respondent without conditions, save of course any conditions that might be imposed by the full court at the hearing.
Order: As above. The Secretary of State will have its costs against the appellants, those costs to be paid in any event and to be subject to detailed assessment if not agreed. Vodafone's costs reserved to the Court of Appeal.