Meadows and Others v The Attorney General and another (Jamaica)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Carnwath |
| Judgment Date | 19 October 2017 |
| Neutral Citation | [2017] UKPC 29 |
| Court | Privy Council |
| Docket Number | Appeal No 0036 of 2016,Privy Council Appeal No 0036 of 2016 |
| Date | 19 October 2017 |
[2017] UKPC 29
From the Court of Appeal of Jamaica
Michaelmas Term
Lord Neuberger
Lord Kerr
Lord Wilson
Lord Sumption
Lord Carnwath
Privy Council Appeal No 0036 of 2016
and others
and another
Appellants
Nicholas Padfield QC
(Instructed by Sheridans)
Respondent (The Attorney General and another)
Marlene Malahoo Forte QC
Althea Jarrett
(Instructed by Charles Russell Speechlys LLP)
Respondent (Jamaica Public Service Company Limited)
B. St Michael Hylton QC
Sundiata Gibbs
Shanique T Scott
(Instructed by Myers Fletcher & Gordon)
Statute - Interpretation — Privy Council — Appeal — Meaning of “any area or part of any area” — Whether minister had power to grant licence for supply of electricity for 20 years for entire jurisdiction of Jamaica — Whether grant of licence contrary to policy of Act — Appeal dismissed.
Heard on 12 July 2017
This appeal raises the question whether, under section 3 of the Electric Lighting Act 1890, the relevant Minister had power in 2001 to grant to the second respondent (“JPS”) an exclusive licence for the supply of electricity for 20 years for the whole of the island of Jamaica. The appellants represent certain local interests concerned to secure cheaper electricity on the island. Their principal objection is that the grant of such a licence is contrary to the policy of the 1890 Act, by creating a monopoly rather than promoting competition.
Section 3 provides:
“The Minister may from time to time license any Local Authority as defined by this Act, or any company or person, to supply electricity under this Act for any public or private purposes within any area, subject to the following provisions —
(a) the licence may make such regulations as to the limits within which, and the conditions under which, a supply of electricity is to be provided, and for enforcing the performance by the licensees of their duties in relation to such supply, and for the revocation of the licence where the licensees fail to perform such duties, and generally may contain such regulations and conditions as the Minister may think expedient; …”
Subsection (b) provides that, in “any area or part of an area” in which the undertakers are not the local authority, the licence may provide for the local authority for “such area or part of an area” to exercise the powers of the undertakers in respect of the breaking up of streets and so on.
The agreed facts can be shortly stated. Before March 2001 the Government of Jamaica held the controlling (80%) interest in JPS. In that month it sold its interest to Mirant Corporation (“Mirant”). It was a condition of the sale that the Minister would grant to the company an exclusive licence under the Act. Such a licence was granted on 30 March 2001 for 20 years. The draft licence had been attached to the share purchase agreement. Exemption from the Fair Competition Act was granted by an order made by the Minister under section 3(h) of that Act. The licence has since been extended for a further period of seven years.
Aspects of the 2001 licence were the subject of unrelated proceedings by JPS itself, which came before the Board recently ( Jamaica Public Service Co Ltd v The All Island Electricity Appeal Tribunal [2017] UKPC 20). As there explained in that judgment, the operations of JPS are regulated by the Office of Utilities Regulation (“OUR”), a statutory body established under the Office of Utilities Regulation Act. The licence (inter alia) provides for the charges for electricity to be set by OUR in accordance with a complex formula set out in Schedule 3 to the licence ( ibid paras 1–4). No issue arose in that appeal as to the validity of the licence itself.
The present proceedings were begun in 2011 for a declaration that the grant of an exclusive licence was not authorised by section 3. In the Supreme Court on 30 July 2012 Sykes J upheld the challenge in part, holding that, while the Minister had power under section 3 to grant a licence for the whole of Jamaica, he had (in the words of his declaration) no power “to grant a licence on terms which prevent other applicants from having their applications being considered genuinely”.
On 16 January 2015, the Court of Appeal (in a judgment given by Brooks JA, with whom Panton P and McIntosh JA agreed) allowed the Minister's appeal on the latter issue and set aside the declaration, holding that there was no evidence to support the judge's view that the Minister had closed his mind to other possible applications (paras 88–92). They dismissed a cross-appeal on the first issue, with the result that the validity of the licence as granted was confirmed. The appellants appeal to the Board, with final leave granted on 14 December 2015.
The grant of the 2001 licence can be seen in the context of the historical background, including the development of electricity policy for the island, as described in the evidence (in affidavits by Mr Dan Theoc, JPS Vice President of Finance, and Mr Fitzroy Vidal on behalf of the Minister). This shows that the policy for the integration of electricity supply on the island, and the grant of licences on that basis, did not begin in 2001 but had been established for many years. This appears to have taken place without legal objection until the present proceedings.
JPS was originally formed in 1923, when it took over the assets of the West India Electric Company. Until 1975 it was controlled by Canadian shareholders. From 1923 until 1966 its licence was limited to certain parts of the island, others being supplied by individual, parish-based companies. In the 1950s, as Brooks JA noted (para 68), there were other developments:
“Between 1957 and 1958 the supervision of the use and distribution of electricity in the island underwent an overhaul. The Electricity (Frequency Conversion) Act passed in 1957 required the use of a standard frequency for electricity throughout the island. The Electricity Development Act, passed in 1958, established the Electric Authority. The Electric Authority was designed to consider ‘the needs for electricity throughout the island’ (section 4(1)(a)).”
In 1966 (apparently while the company was still under Canadian control) it was granted for the first time an “All Island Electric Licence” for a period of 25 years. The preamble to the 1966 Licence referred to the “vital” need for an adequate supply of electricity available to all parts of the Island at reasonable rates, and the intention “to integrate under one ownership and management” all the properties and facilities used for that purpose as “an all-island integrated electrical system”; and declared that its operations were to be regulated by an independent Public Utility Commission established by statute. In June that year there was enacted the Public Utility Commission Act, which established the Public Utility Commission. (That body was in 1995 superseded by the OUR established under the Office of Utilities Regulation Act of that year.)
In 1975 the Electricity Authority, a government agency, acquired 93% of the shares in JPS, to which, in 1978, the Minister granted a new 39 year All-Island Electricity Licence. According to Mr Vidal, the previous licensing regime had resulted in a significant differential in frequency of electricity supplied to consumers as well as in the price paid by the consumers. Consumers in rural parishes in particular had tended to pay more for their electricity due to the higher cost to supply those rural areas as against urban areas.
In the 1990s, the need for increased generating capacity to meet growing demand, combined with the Government's fiscal and budgetary constraints on JPS's ability to meet it, led to pressure for privatisation (encouraged by the International Monetary Fund). That provided the background to the negotiations which led ultimately to the sale to Mirant in 2001.
Mr Padfield QC for the appellants seeks to challenge the 2001 licence on a number of grounds, which he applies with equal or added force to the “exclusive” condition and to the extension for a further seven years. He criticises the Court of Appeal for adopting a “purely literal” approach to the construction of section 3, rather than by reference to the purpose and intention of the statute as a whole, viewed in the context of its historical and common law background. He relies generally on what he calls the common law rule against the grant of monopolies, affirmed as long ago as the time of Queen Elizabeth I ( Darcy v Allen (1603), also known as The Case of Monopolies 77 ER 1260; 11 Co Rep 84b).
More directly he points out that the Jamaican Act of 1890 follows closely the form and language of the English Electric Lighting Act 1882, considered by the House of Lords in London Electric Supply Corpn Ltd v Westminster Electric Supply Corpn Ltd (1913) Knight's Local Government Reports 1046, in which reference was made to the purpose of the legislature “to maintain competition and avoid monopoly” (p 1052, per Lord Haldane LC). The underlying policy of the 1882 Act, he submits, was to promote competition between a number of undertakers in different areas of supply, in the interests of consumer protection and cheaper prices. The same policy was endorsed by the Jamaican legislature in the 1890 Act.
He also criticises the Court of Appeal for relying on the “always speaking” rule of statutory construction (see R v G [2004] 1 AC 1034, para 29) to justify the grant of an exclusive licence, by reference to technological changes in electricity generation and supply since 1890. Such changes, so he says, cannot justify departing from the underlying purpose of the legislation.
The Board is unable to support these grounds of appeal. Since its...
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