R (Federation of Technological Industries) v Commissioners of Customs and Excise (Case C-384/04)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lord Justice Jacob,Sir Charles Mantell |
| Judgment Date | 30 July 2004 |
| Neutral Citation | [2004] EWCA Civ 1020 |
| Docket Number | Case No: C3/2004/0788 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 July 2004 |
[2004] EWCA Civ 1020
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
THE HON MR JUSTICE LIGHTMAN
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Ward
Lord Justice Jacob
Sir Charles Mantell
Case No: C3/2004/0788
CO/5240/2003
J Peacock QC and F Fitzpatrick (instructed by Solicitor for Customs & Excise) for the Appellants
Maître D Waelbroeck, A P Young and Amy Berry (instructed by Dass) for the Respondents
Lord Justice Ward
I invite Jacob LJ to give the first judgment.
Lord Justice JacobLord Justice Jacob
Introduction
This is an application for permission to appeal and, if permission be granted an appeal, from a decision of Lightman J of 18 th February 2004 [2004] EWHC 254 (Admin). The appellants are the Commissioners of Customs and Excise and HM Attorney General (collectively "CCE"). The respondents are the Federation of Technical Industries and 53 traders in mobile telephones and computer processing units. The Federation is their trade body. I shall call the respondents collectively "The Federation".
By these proceedings the Federation challenges the legitimacy of certain provisions of the Value Added Tax Act 1994 as amended. The attack before Lightman J was launched on a broad front, alleging both violation of EU law and incompatibility with the ECHR and its first protocol. Six different arguments were raised on the application for permission to proceed with the claim.
Pursuant to an earlier order the application for permission was made on notice to the CCE. So the substantial arguments took place at the permission stage. The Judge rejected five of the six arguments at that point. We do not have to deal with them for there is no attempt to appeal his refusal of permission. As regards the remaining point, the Judge held that permission to proceed with the application for judicial review should be granted. Having regard to the fact that he thought the position under EU law was uncertain he therefore immediately ordered a reference to the ECJ.
In the skeleton arguments before this court there was some misunderstanding as to what the precise procedural position was. Some argument was directed to the question of whether an appeal could lie from a decision to grant permission to proceed with an application for judicial review. But in the end it was agreed that this debate was irrelevant. The CCE are not now seeking to appeal the Judge's grant of permission to proceed; they are seeking to appeal his decision (to refer questions to the ECJ) in the proceedings for which he has granted permission to proceed. The fact that he gave his reasons as to why there should be a reference at the permission stage is simply an irrelevance.
There is no doubt that the case raises important questions, legally and financially. So in the ordinary way this Court would (unless that matter is despite its importance very plain) grant permission to appeal. However the Federation raised two preliminary reasons as to why permission should be refused. The first was a particularly meritless time point, based on the fact that although the appropriate documents were filed in time they were filed in the wrong office in this building and it took a little while for this to be sorted out. The Federation suffered no prejudice. Under some pressure from the Court the time objection was dropped.
Jurisdiction of the Court
The second objection was one of law. It was submitted by Maître Waelbroeck for the Federation that this Court had no jurisdiction to decide whether the Judge was right or wrong to refer. He submitted that it was a principle of EU law that a higher court could not interfere with a decision of a lower court to refer under Art. 234 (formerly 177) of the EC Treaty, even where the higher court was of the opinion that a reference was not necessary because the point of European law was clear beyond argument (acte clair).
He based his submission Rheinmhlen-Dsseldorf v Einfuhr und Vorratsstele Getreide on Case 166/73 [1974] ECR 33. In paragraph 4 of its judgment the Court said:
"It follows from these factors that a rule of national law whereby a court is bound on points of law by the rulings of a superior court cannot deprive the inferior courts of their power to refer to the Court questions of interpretation of Community law involving such rulings.
It would be otherwise if the questions put by the inferior court were substantially the same as questions already put by the superior court.
On the other hand the inferior court must be free, if it considers that the ruling on law made by the superior court could lead it to give a judgment contrary to Community law, to refer to the Court questions which concern it.
If inferior courts were bound without being able to refer matters to the Court, the jurisdiction of the latter to give preliminary rulings and the application of Community law at all levels of the judicial systems of the Member States would be compromised."
But there was a second Rheinmhlen case, 146/73 [1974] ECR 139. Paragraph 3 of the judgment said this:
"According to [ Rheinmhlen 1] a rule of national law whereby a court is bound on points of law by the rulings of a superior court cannot on this ground alone deprive the inferior courts of their power, provided for under Article 177, to refer questions to the Court for a preliminary ruling.
However, in the case of a court against whose decisions there is a judicial remedy under national law, Article 177 does not preclude a decision of such a court referring a question to this Court for a preliminary ruling from remaining subject to the remedies normally available under national law."
I read this last paragraph as saying that a national court of appeal can consider whether a court below was right to refer. That is what we are being asked to do here – exercise the remedy of appeal normally available in our courts.
Moreover both these judgments were before our Court of Appeal in Bulmer v Bollinger [1974] 1 Ch 401 in the form reported in the CMLR (where they are reported together). Lord Denning MR said:
"The European court take the view that the trial judge has a complete discretion to refer or not to refer: see Rheinmhlen-Dusseldorf (Firma) v Einfuhr und Vorratsstelle fr Getreide und Futtermittel [1974] 1 C.M.L.R. 523– with which they cannot interfere: see Milchwerke Heinz Whrmann & Sohn K.G. v Commission of the European Economic Community [1963] C.M.L.R. 152. If a party wishes to challenge the decision of the trial judge in England – to refer or not to refer – he must appeal to the Court of Appeal in England."
Stephenson LJ (with whom Stamp LJ agreed) said (p.431) :
"I find it hard to follow the argument that a rule which gives a right of appeal to a party dissatisfied with a judge's exercise of his discretion one way restricts in some manner the judge's power to exercise it. It may facilitate appeals against one way of exercising it; it does nothing thereby to prevent its exercise either way. The judge is left as free to exercise this discretion as any judicial discretion and this court has its customary freedom to correct its exercise if unjudicial, unjust or wrong."
So all members of this Court held, having seen both Rheinmhlen cases, that an appeal lay to this Court from a judge's decision about a reference, whether that decision was to refer or not refer. Since then, in at least one case, this Court has reversed a decision to refer – see R v Stock Exchange ex parte Else [1993] QB 534. It held that, contrary to the view of the first instance judge, the point at issue was acte clair. All concerned assumed that in those circumstances the decision to refer could be reversed.
Maître Waelbroeck and Mr Andrew Young contended that even if we thought the point was acte clair the Rheinmhlen cases meant that it would nonetheless be open later for to a first instance judge to disagree and to refer, producing a sort of ping-pong between this court and that of first instance. I understand the fear expressed by the ECJ in Rheinmhlen, that important questions of EU law might, by virtue of the acte clair rule, be kept away from the ECJ by a determined national final court of appeal. But this case is miles away from that sort of problem. If the Court of Appeal is of the opinion that a matter is acteclair, I doubt very much whether a first instance judge would subsequently take a different view. As Mr Young eventually accepted, the problem has not begun to arise in this case. So I say no more about it.
In the result, as we indicated during the hearing, this Court has jurisdiction to decide whether or not the Judge was right to refer, the time for seeking permission to appeal was extended and permission to appeal was granted.
The problem the impugned provisions are designed to tackle
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