Re Racal Communications Ltd

JurisdictionUK Non-devolved
JudgeLord Diplock,Lord Salmon,Lord Edmund Davies,Lord Keith of Kinkel,Lord Scarman
Judgment Date03 July 1980
Judgment citation (vLex)[1980] UKHL J0703-2
Date03 July 1980
CourtHouse of Lords
In re Racal Communications Limited

[1980] UKHL J0703-2

Lord Diplock

Lord Salmon

Lord Edmund-Davies

Lord Keith of Kinkel

Lord Scarman

House of Lords

Lord Diplock

My Lords,


On 2nd April 1979, an application by originating summons was made to Mr. Justice Vinelott in chambers under section 441 of the Companies Act 1948. So far as is relevant for the purposes of this appeal this reads as follows:

"441.—(1) If on an application made—

  • (a) in England, to a judge of the High Court in chambers by the Director of Public Prosecutions, the Board of Trade or a chief officer of police; or

  • (b) in Scotland, to one of the Lords Commissioners of Justiciary by the Lord Advocate;

there is shown to be reasonable cause to believe that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made—

  • (i) authorising any person named therein to inspect the said books or papers or any of them for the purpose of investigating and obtaining evidence of the offence; or

  • (ii) requiring the secretary of the company or such other officer thereof as may be named in the order to produce the said books or papers or any of them to a person named in the order at a place so named.

(2) ….

(3) The decision of a judge of the High Court or of any of the Lords Commissioners of Justiciary on an application under this section shall not be appealable."


The application was made by the Director of Public Prosecutions and was made ex parte. This was in accordance with the usual practice which has been adopted so as to avoid defeating the evident purpose of the section by giving to the suspected offender an opportunity of disposing of incriminating documents before any order for their inspection or production can be made and served. In the result the company concerned ("Racal"), who are appellants in your Lordships' House, received no notice of the application to Mr. Justice Vinelott, nor of the appeal to the Court of Appeal brought by the Director of Public Prosecutions against the judge's refusal to make the order sought. On 31st July 1979 the Court of Appeal reversed the judge's decision and made an order authorising named persons to inspect "all books, records, correspondence and other papers belonging to or under the control" of Racal, and ordering a director of Racal to produce them to the persons so named. The first time that Racal heard anything about the proceedings was when that order of the Court of Appeal was served upon them; and the first opportunity that Racal has been afforded to advance reasons why the Court of Appeal ought not to have made the order has been before your Lordships' House.


The first reason that Racal rely upon is that the Court of Appeal had no jurisdiction to entertain an appeal from a decision of a High Court judge made in the exercise of the statutory jurisdiction conferred upon him by section 441(1) of the Companies Act 1948. Their argument is simplicity itself and can be stated in a single sentence. Subsection (3) provides that his decision shall not be appealable. One asks oneself rhetorically:

"What could be plainer than that?"


What principle of statutory interpretation can lead one to suppose that parliament when it said "not appealable" really meant "appealable on some grounds but not on others?" To give to the phrase "shall not be appealable" its ordinary and, linguistically, its only possible meaning, does not lead to results so manifestly absurd or unjust as to drive one to the conclusion that parliament must have intended that, despite the unqualified language used, the judge's decision should be unappealable on some grounds only but appealable to the Court of Appeal on others.


The provisions of section 441 form part of the machinery for the investigation of crime preparatory to the commencement of a criminal prosecution and for obtaining evidence for use at an eventual trial if prosecution be brought. The jurisdiction exercised by the High Court judge is analogous to that exercised by a magistrate in issuing a search warrant for stolen goods or by a circuit judge in issuing a search warrant under section 20C of the Taxes Management Act 1970 as amended. See Reg. v. Inland Revenue Commissioners ex parte Rossminster Ltd. [1980] 2 WLR 1. The application does not involve and is not made in the course of any lis inter partes. It cannot create res judicata; if one judge refuses to make the order there is no legal obstacle to the applicant's making the same application to another judge, although in the absence of additional evidence this is unlikely to be successful. Neither the suspected offender nor the company of whose papers inspection is sought is entitled to notice of the application or to be heard upon it, for to permit this would defeat the obvious purpose of the section. The making and execution of the order involves some inroad on the company's rights at common law to refuse disclosure of its papers to anyone except its board and persons authorised by its board; but this is a relatively minor inconvenience to suffer in the public interest in the detection and punishment of crime: particularly as the offences contemplated by the section include, even if they are not confined to, breaches of the law by those concerned in the management of the company and of which the company, its shareholders and creditors are themselves the victims.


My Lords, I can see no ground for saying that the consequences of denying all appeals from the decision of a High Court judge granting or refusing an order for production and inspection of a company's documents under section 441 are so absurd or unjust that parliament cannot have meant what it so plainly said but must have intended the unappealability to be subject to implied exceptions. On the contrary, there seem to me to be cogent reasons for denying any right of appeal. So on the sole and simple ground that the statute says the judge's decision shall not be appealable I would hold the Court of Appeal had no jurisdiction to entertain an appeal from Mr. Justice Vinelott's decision to refuse the order applied for by the Director of Public Prosecutions and that the order that they purported to make ordering production and inspection of Racal's papers is a nullity and must be set aside.


It follows that your Lordships, in your turn, have no jurisdiction to enter upon a consideration of whether or not the judge's decision was right or wrong. Nevertheless to understand the reasoning by which the Court of Appeal reached the conclusion that it was entitled to exercise appellate jurisdiction in the instant case it is necessary to refer briefly to the judge's reasons for refusing to make the order that was applied for. He gave to the expression "an offence in connection with the management of the company's affairs" in section 441(1) a construction which the Court of Appeal regarded as too narrow. In the context of the Act he regarded it as confined to offences committed in the course of the internal management of the company and held that the particular offences of which an employee of Racal was suspected did not fall within the section. He also doubted whether the employee fell within the class of "officer of a company" within the meaning of the Companies Act 1948. The ground on which he dismissed the application was therefore one of law. The Court of Appeal were of opinion, rightly or wrongly, that the learned judge had misconstrued the statute and held further that section 441(3) did not render his decision unappealable if it were based on a mistake of law.


The question of jurisdiction was disposed of somewhat summarily in the judgments of the Court of Appeal. This is not surprising since the judge himself, on being informed that other judges had taken a different view on the construction of the Act, had given, indeed had volunteered, leave to appeal. At the hearing of the appeal which, as I have mentioned, was ex parte, the Court of Appeal had the benefit of hearing counsel acting as amicus curiae, but apparently he did not address his argument to the question of the jurisdiction of the court to entertain the appeal. So as far as argument is concerned, the point about jurisdiction went by default.


The Master of the Rolls, in a passage that is set out in full in the speech of Lord Scarman, referred to two authorities: Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 A.C. 147 and a passage from his own judgment in Pearlman v. Harrow School [1979] 1 Q.B. 56 at page 70:

"No court or tribunal has any jurisdiction to make an error of law on which the decision of the case depends."


He described the decision of the learned judge to dismiss the application in the instant case as refusing a jurisdiction which he ought to have entertained. Lord Justice Shaw referred to him as "renouncing jurisdiction". Lord Justice Templeman added nothing on the jurisdiction point. He agreed with the two previous judgments.


My Lords, this summary way of disposing of the question of jurisdiction appears to me to overlook (1) the distinction between the appellate jurisdiction of the Court of Appeal and the original jurisdiction exercisable only by the High Court (as successor to the old Court of King's Bench) to review decisions of inferior tribunals for error of law, by use of the prerogative writs of certiorari, prohibition and mandamus which have now been replaced by orders obtainable on application for judicial review; (2) the distinction between courts of law and tribunals or courts exercising administrative functions which, in another of its aspects, has recently been considered by this House in Attorney-General v. B.B.C.; and (3) the distinction between the High Court and an...

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