England and Wales High Court (Administrative Court) Decisions

The Sea Fisheries Regulation Act 1996

“1(1) The Minister may, on the application of a county or metropolitan district council …, by order -

(a) create a sea fisheries district …, and

(b) define the limits of the district, and the area chargeable with any expenses under this Act, and

(c) provide for the constitution of a local fisheries committee for the regulation of the sea fisheries carried on within the district.

and the Minister may, by a subsequent order made on the like application, or made on the application of a local fisheries committee and after consultation with every county or metropolitan district council concerned, vary or revoke any order made under this section ….”

“Subject to any restrictions or conditions as to expenditure made by the council or councils by whom a local fisheries committee is appointed, the committee may appoint such fishery officers as they deem expedient for the purpose of enforcing the observance within their district of byelaws made by the committee ….”

The 1912 Order and amending orders

“The expenses of the Committee shall be chargeable as follows:-

.…

(3) The amount of the expenses chargeable in any financial year under this Order on any one of the said counties and county boroughs shall be determined by apportioning the expenses between the several counties and county boroughs in the following proportions …

Provided that the Committee shall not in any financial year incur expenses which would involve a charge on any county or county borough greater than the amount which can in that year be raised by a rate of one-eighth of a penny in the pound on the rateable value of the property within such county or county borough.”

The 2001 Order

“(1) Subject to paragraph (2) below, the expenses of the committee, other than those which may be required to be incurred under section 17(2) of the Act, shall be chargeable jointly to the constituent councils in the respective amounts for each financial year set out in Column 3 of the Schedule to this Order opposite the reference to each constituent council and shall be expenses for general county or county borough purposes.

(2) In the event of the committee being required to incur any unforeseen expenses which cannot be met by the amounts charged to the constituent councils under paragraph (1) above, then those unforeseen expenses shall, in addition, be referred to the constituent councils for consideration and defrayed jointly by them in the respective percentages set out in Column 4 of the Schedule to this Order opposite the reference to each constituent council and shall be expenses for general county or county borough purposes.

(3) The Committee may decide that the figures set out in Column 3 of the Schedule shall be increased for budgetary years from 2002/03 onwards by a figure not exceeding the annual rate of inflation, which rate shall in the event of disagreement by any constituent council be determined by the National Assembly for Wales.”

Levies and the financing of payments

“No levy may be issued in substitution if its amount would be greater than the amount of the levy for which it is substituted, except as provided by paragraph (4) below [which applies only where the old levy has been quashed on certain grounds].”

One of the points made by SWSFC in these proceedings is that it was precluded by regulation 8(3) from raising a substituted levy so as to recover from Carmarthenshire, Pembrokeshire and Swansea the sums in excess of £49,500 specified in the 2001 Order.

“Notwithstanding regulation 8 of the Principal Regulations, the Committee is authorised by these Regulations to issue:

(a) substitute levies (the new levies) to the Constituent Councils to replace those levies issued by it on 8th February 2001 (the old levies); and

(b) a substitute levy for nil pounds to Rhondda Cynon Taff to replace the levy issued on 8th February 2001;

no later than 14th February 2002 to enable the Committee, the Constituent Councils and Rhondda Cynon Taff to comply with the Order.”

First issue

i) The substituted Article 17(1) states that expenses "shall be chargeable in the respective amounts … set out in Column 3" (emphasis added). It does not state that expenses shall be chargeable "in the proportions" set out or "up to the amounts" set out. The language is plainly that of fixing specified amounts rather than placing a cap on chargeable expenditure. Had it been intended to place a cap, different language would have been used.

ii) If it had been intended to provide for proportionate contributions in the event of expenses being less than the total of the column 3 figures, specific provision would have been made to that effect. I reject the submission that such provision is to be implied. The illustrative calculation put forward by Mr Jarman highlights the artificiality of the exercise. I find it very difficult to impute to the Assembly an intention to require Cardiff to pay 3.0547513% of the total in the case of under-expenditure, when it has provided expressly for Cardiff to pay the rounded figure of 3% in the case of unforeseen over-expenditure.

iii) That leads into a further point, that when the Order wishes to refer to proportions rather than to amounts, it does so. In relation to unforeseen expenses, Article 17(2) provides that they shall be defrayed jointly "in the respective percentages set out in Column 4", those percentages being sensibly rounded figures.

iv) The legislative history is also relevant. All the earlier Orders had provided for the expenses to be chargeable in specified "proportions", leaving the amounts unfixed (subject to the cap in place from 1912 to 1996). The change effected by the 2001 Order, to provide for expenses to be chargeable in specified "amounts", is explicable only on the basis that the Assembly was fixing precise amounts rather than laying down proportions and a cap.

Second issue

i) The absence of any enforceable means of levying the additional sums was a substantial deficiency. Reliance could not sensibly be placed on the constituent councils volunteering payments, even though they had agreed to the proposal (and whatever the actual reasons for non-payment to date).

ii) There is nothing to show that, in making the 2001 Order, the Assembly was aware that SWSFC would lack the power to levy the additional amounts in the absence of further provision or that it intended to introduce such provision by way of amending regulations. Nothing to that effect was said in the course of the procedures relating to the 2001 Order or in correspondence or in the Assembly's grounds for contesting the claim or in its evidence in these proceedings. The first intimation of an amendment came in the form of receipt of a copy of the 2001 Regulations themselves a few days before the hearing. There is simply no basis for an inference that the Assembly had the amendment in mind from the outset.

iii) The 2001 Regulations went through what is called the "executive procedure" under Standing Order 22.27, which reflects the provisions of section 67 of the Government of Wales Act 1998. The normal requirements of notification or consultation, submission of a draft Order to the Business Committee, consideration of a report from the Legislation Committee, the laying of a draft Order before the Assembly and its approval by a resolution of the Assembly were all disapplied on the basis that they were "not reasonably practicable". There is a strong inference, as Mr Lewis submits, that the Assembly had not previously foreseen the need for amending regulations but, having at a late stage appreciated the deficiency, rushed them through in order to have them in place in time for the hearing.

Third issue

Fourth issue

Other issues

Relief

i) The court ought to be slow to exercise a discretion that will leave in place an invalid order.

ii) As to the first issue, the effect of the 2001 Order is to reduce SWSFC's chargeable expenses from the budgeted figure of £396,000 to the column 3 total of £354,000. If SWSFC is to have its budget cut by the Assembly, it is entitled to have it done lawfully; and it would be wrong for this court to exercise its discretion to withhold relief on the ground that it would have been open to the Assembly to impose a cap on expenditure and that the situation created by the 2001 Order is not very different in practice. Although it may be open for the Assembly to impose a cap on expenditure, that should be done properly, with full opportunity for debate and with an opportunity for SWSFC to challenge any such Order by way of judicial review in the light of its specific terms and the circumstances of its adoption.

iii) To quash the decision gives rise to no practical difficulties. The Assembly can either make a further Order or leave in place the pre-existing arrangements for the current financial year: the budget was set and levies were issued in February 2001, and the major part of the amounts due were allocated to the councils (including Rhondda Cynon Taff) in the Local Government Revenue Settlement for 2001/02.

iv) The Assembly was very slow to act to seek to remedy the problem created by the absence of a power in the 2001 Order to make substituted levies for additional amounts, in particular in relation to unforeseen expenses; and SWSFC has in consequence been placed in a very difficult position for many months. In any event the 2001 Regulations do not remedy the problem. There is also a realistic possibility that, if the Assembly had realised the deficiency at the time of making the 2001 Order, it would have included a different and higher baseline in the Order.

v) Even where a levy can be issued, payment of the sum levied is enforceable as a debt. It would be open to a council to rely on the invalidity of the 2001 Order as a defence in proceedings to recover the debt even if on judicial review the court had exercised its discretion not to quash the Order (see Credit Suisse v. Allerdale Borough Council [1997] QB 306 at 343-4, 347D and 357E). At the very least, there can be no guarantee that problems would not arise. The court should not allow such a situation to be created by the discretionary refusal of relief.

Conclusion

MR JUSTICE RICHARDS: I am handing down judgment in this case. The judgment handed down takes into account the factual and typo-graphical comments provided by counsel, most of which I have adopted and for which I am grateful.PRIVATE 

For the reasons given in the judgment, the claim for judicial review succeeds and the South Wales Sea Fisheries Variation Order 2001 made by the National Assembly for Wales on 29th March 2001 will be quashed.

MR LEWIS: I am grateful, my Lord, for the order quashing the order.

The second issue is costs. We say quite simply, my Lord, costs follow the event. We had to come to court to establish that this order was invalid. We have done so, and we say that we ought to have the entirety of our costs, to be subject to detailed assessment if not agreed.

I anticipate Mr Jarman will take issue with whether it should be apportioned or not. I can deal with that now, or it may be sensible to hear what Mr Jarman says.

MR JUSTICE RICHARDS: Let us hear what Mr Jarman says first. Yes, Mr Jarman?

MR JARMAN: Thank you, my Lord. As Mr Lewis has said, the claimant has succeeded and of course that is a powerful factor which the Court will take into account in exercising its discretion as to costs. But the Court now also needs to look at the issues upon which it succeeded and how proportionate those issues were to the way in which the case was conducted.

I have two main points on this. The first is that the Sea Fisheries' Committee had a draft of the order some time before it was made and had the benefit of legal advice. They did not take, clearly, the points upon which they succeeded, which were two-fold basically: the fact that the order fixed an amount and the fact that the Assembly did not take into account the amount that was (inaudible).

Neither of those points were clearly spelt out in the letters or briefing notes which the Committee sent to the Assembly. Many other points were taken, but not those. The fundamental objection at the time from the Committee was that there was a cash limited order, not a cash fixed order. Had these points been taken then, in March, before the order was made, it may well have been that this case would not have been necessary at all. That is my first point.

My second point is that when the claim was made a number of different points were taken. I do not think your Lordship needs to go to it, but I do refer to the letter of 4th April from the Committee, or the Committee's solicitors I should say, immediately after the order was made. It is to be found at page 121 of the bundle.

That is a very long letter indeed and set out a number of different points. It is a letter that runs to something like 15 pages with about seven different allegations. Indeed, six different points were pursued to trial, two of which have succeeded.

That, of course, has two consequences. The first is the question of whether it is reasonable for the Assembly to have to pay for the undoubted costs which all those points took in the preparation of the claimant's case. The second point is, of course, that the Assembly itself incurred further costs in dealing with all these different points.

For all those reasons, my submission is that, whilst accepting that the claimants have succeeded and that they should have some of their costs, my submission is that they should not have all of their costs but a proportion thereof.

MR JUSTICE RICHARDS: Yes. Thank you very much.

MR LEWIS: My Lord, if I could deal with both of those matters? Firstly, it is of course for the Assembly to make a lawful order. Secondly, your Lordship will recall from the correspondence that was referred to during the course of the hearing, and indeed our resolution, that we objected to an order that was in anything other than percentage terms, which is the first issue that your Lordship had to deal with.

That is the first response to that, my Lord. It is their responsibility and they took legal advice to get it right. They did not and, as I say, we have always objected to the percentage point.

On a related matter, my Lord, one of the issues that became central was the levies issue. We told them about the absence of a power to issue levies when the claim was brought. Right up until the very end of the hearing, they still failed to explain whether or not they had or had not taken that into account. They failed to take any steps to deal with the levies issue between the claim form and a few days before the hearing.

So, my Lord, really you have to look at the conduct of both parties and here, as I say, the primary responsibility for getting the order right is on the Assembly who made the order. We had always objected to percentages and, so far as the second issue is concerned, even when we draw it to their attention not only did they not take steps to remedy the problem, they refused right up to the end of the trial to tell us whether or not they were aware of the problem at the outset.

So far as the issues in the letter are concerned, my Lord, you have seen the claim form and there is absolutely nothing, with respect, to suggest that the Assembly incurred any costs in dealing with evidence and so on in relation to the claim form that went beyond the issues that were argued. You have seen the claim form and seen the evidence of Mr O'Sullivan on that.

Your Lordship obviously remembers the hearing and your Lordship was kind enough to say that both counsel were focussed in the hearing. We did not stray beyond the legal issues that needed to be addressed.

So far as the question of different issues, that we succeeded on two and not on others, that is not fully accurate, my Lord. I can deal with that in detail should your Lordship need to, but the starting point as your Lordship will know from 44.3 of the CPR is that normally a successful party who has been forced to come to court should get its costs. There are matters, such as the conduct of the parties and so on, or a clearly severable issue, which may reduce that but none of the factors in 44.3 apply here and your Lordship may want to have 4.3 in mind and the guidance. Your Lordship probably has it open, I suspect.

MR JUSTICE RICHARDS: Yes.

MR LEWIS: Your Lordship will see at 795 the guidance from case law. You know what issues have been pursued and your Lordship knows that we won on two. The third, the windfall issue, you said may not have been enough to quash but was relevant to this question. The fourth, the second issue, the Assembly was saying that, in fact, there was a requirement that there be a majority decision by the councils. Your Lordship has found that that is wrong and you accept our argument that they have to defer the expenses, but then you say that because you have accepted that argument that makes the order workable.

All those issues really stem from the scope of the powers of the Assembly and of the relevant Act and the order that was prepared. In my submission, my Lord, it is very difficult to see how our conduct in pursuing this litigation is such as to disentitle us to any of our costs.

Unless I can assist your Lordship further, that would be the submission on the issue of all or nothing.

MR JUSTICE RICHARDS: Thank you very much.

I direct myself by reference to the principles set out in CPR Rule 44.3. The starting point is the general rule that the unsuccessful party will be ordered to pay the costs of the successful party, but the Court is willing to depart from that rule in appropriate cases and under the new rules is much readier to depart than it used to be.

Looking at the particular circumstances of this case, I accept that the primary responsibility to ensure the lawfulness of the order, indeed the ultimate responsibility, is that of the Assembly. On any view, the Assembly having made an order which I found to be unlawful, must bear a heavy proportion of costs.

I have considered Mr Jarman's submissions that it should not be required to pay the total costs. It is true that the specific points on which the Committee has succeeded were not advanced, or at least advanced in terms, in advance of the judicial review application, but the Committee did adopt the stance throughout that the only lawful approach was a percentage based formula in relation to a payment of costs.

Moreover, when the points were taken at the beginning of the judicial review, the Assembly resisted, and resisted throughout to the conclusion of the case. So not much turns on the fact that the specific points were not advanced in that form before the proceedings.

The written case advanced on behalf of the Committee was somewhat long, but the oral hearing was conducted with considerable economy. In my judgment, there was a proper focus upon points that it was appropriate for the Court to consider and the Committee is not to be penalised on the ground of having strayed beyond a sensible remit in terms of the case.

The Committee succeeded on the major points advanced, albeit not on some of the lesser points; lesser points which did not take up a lot of time and which, like the major points, were directed to the essential issue of the invalidity of the order.

Taking all those matters into consideration, I have come to the conclusion that the just order here is that the Assembly should pay the entirety of the Committee's costs. There is not sufficient reason, in my judgment, for me to depart in the exercise of my discretion from the general rule that the unsuccessful party pays the costs.

MR LEWIS: I am obliged, my Lord, and that of course covers the cost of today's hearing because that was necessary to deal with it.

MR JUSTICE RICHARDS: That covers the costs of the entirety of the claim including today's hearing. Is there any other application?

MR JARMAN: My Lord, there is one point. I am sorry, I cannot see whether I am interrupting Mr Lewis or not; I do not wish to interrupt him.

MR LEWIS: I have no further applications to make.

MR JUSTICE RICHARDS: The ball is in your court, Mr Jarman.

MR JARMAN: My Lord, the point is this: we now have what I may say is a very clear order and the Assembly will have to consider that judgment. Clearly everyone accepts that there has to be some sort of order. There are outstanding applications and there will have to be a further order made.

As I understand it, there is already a dialogue commenced between the Assembly constituent councils and indeed the Committee itself as to how that may take place.

In those circumstances, I am instructed to invite the Court not at present to issue the order quashing the March order. The claimant can, if it so wishes, always come back to court for that order to be issued, but at present I am instructed to ask that no order be issued.

MR JUSTICE RICHARDS: What do you say about that, Mr Lewis?

MR LEWIS: My Lord, in relation to that: one, it is astonishing that an illegal order be left on the books; two, the difficulty we have is, because of the existence of this order, we have three councils who are saying we are only supposed to pay the amount in the order, not the amount in the original levies that were issued. We say, really, you should do the logical thing which is to quash the order, the order which is issued now, we can then enforce the original levies that we issued and there would be question mark or argument as to whether or not those are superceded by the order.

Thirdly, it is very difficult to see why the fact that you are now going to have a new order -- which everybody accepts, according to Mr Jarman, in the light of your judgment is going to happen -- any merit is served by pretending to preserve any distance or having some legal issue arising as to the status of the old order. It is much better that it goes and then the parties (inaudible).

MR JARMAN: My Lord, if I may come back on that: if there is going to be a new order, it would be pointless, in my submission, for the Committee to issue its levies now if, in the course of the next week or so -- perhaps now until the new year -- there is going to be an agreed or an imposed different regime.

MR JUSTICE RICHARDS: Yes. Thank you, Mr Jarman.

First of all, I take the view that the order must be quashed and that, in the light of my judgment that it is an unlawful order and my decision to exercise my discretion to quash, it would be wrong for me to do anything other than to quash it with immediate effect. I decline the application or suggestion that the order should be suspended.

I stress, however, that that should not prevent sensible discussion between the parties of alternative arrangements. I have to say that it strikes me, from what I have seen of this case, that it would not be sensible, and it might be said to be unduly provocative, for the Committee immediately to seek to give effect to the arrangements that will be left in place as a result of the quashing of the order pending further discussion between the parties as to an appropriate alternative arrangement, including possibly a new order.

But that is entirely a comment based on what I have seen of the case and the position between the parties, and it is not something that can have any legal effect.

MR LEWIS: I ought to make your Lordship aware that, so far as we are aware, now that the original levies can be enforced without a problem about the order -- the levies that were issued on 8th February -- whilst I will relay your Lordship's comments to the clients, I do not anticipate that we will do anything other than enforce the rights that we have.

So I take your Lordship's observations on board and I will relay them, that your Lordship is effectively asking us whether it is sensible to wait or to issue now, but I would not want this court to be under any illusion that we are going to accede to this request.

MR JUSTICE RICHARDS: This is a matter which goes into, effectively, the political arena into which it is not my function to trespass. I have said all I propose to say. Thank you very much.

MR LEWIS: I am obliged, my Lord.