The Secretary of State for Business, Innovation and Skills v PLT Anti-Marketing Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Briggs,Lord Justice Ryder,Lord Justice Richards |
| Judgment Date | 10 February 2015 |
| Neutral Citation | [2015] EWCA Civ 76 |
| Date | 10 February 2015 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2013/3300 |
[2015] EWCA Civ 76
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER DISTRICT
His Honour Judge Hodge QC
3376OF2013
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Richards
Lord Justice Ryder
and
Lord Justice Briggs
Case No: A2/2013/3300
Simon Popplewell and Adam Deacock (instructed by LEATHES PRIOR) for the APPELLANT
Jessica Simor QC and David Mohyuddin (instructed by HOWES PERCIVAL LLP) for the RESPONDENT
Hearing date: Tuesday 13th January 2015
Introduction
This is an appeal from the Order of HHJ Hodge QC sitting as a judge of the Chancery Division in the Manchester District Registry, made on 29 th October 2013, whereby he dismissed the interim application of the appellant company PLT Anti-Marketing Limited ("PLT") for a variation of undertakings previously given by PLT pending the final hearing of a petition by the respondent Secretary of State for Business, Innovation and Skills for the winding up of PLT in the public interest.
Prior to the presentation of the petition, PLT's business consisted of the provision to members of the public of a service, the ostensible purpose of which was to eliminate or (more likely) reduce the exposure of its customers to unwanted marketing, both by unsolicited telephone calls, generally known as 'cold-calling' and by post, generally known as 'junk mail'. Perhaps ironically, the main method whereby PLT recruited its customers was by cold-calling, whereby its telephone sales team invited customers there and then to commit contractually to paying a £4 monthly subscription for the service, pursuant to prepared texts or scripts. A main element in the service offered was that PLT would procure the registration of its customer with two services, the Telephone Preference Service ("TPS") and the Mail Preference Service ("MPS"). I shall have to say more about those services in due course but, in outline, the effect of registration is to notify traders that the registered person does not wish to receive cold calls (in respect of the TPS) or junk mail (in respect of the MPS), and to impose consequences upon traders which ignore that preference. The key feature of both of those services, for present purposes, is that they are provided to the general public free of charge, and a main reason for the presentation of the petition was that, in the Secretary of State's view, a business which seeks to charge customers for obtaining for the customer that which the customer could obtain free of charge is a form of scam which ought, if possible, to be prevented in the public interest.
The grounds for winding up in the public interest were set out in paragraphs 31 to 42 of the Petition under five headings, the second of which was:
"Breach of Consumer Protection Regulations and Breach of Undertakings Provided to NTS ( Norwich Trading Standards)."
Under the first part of that heading the Petition alleges breaches (by commission) of Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 ("the Regulations") and breach (by omission) of Regulation 6 of the Regulations. The breach of Regulation 6 is spelt out in a single, concise paragraph of the Petition in the following terms:
" (35) PLT trades in breach of Regulation 6 of the [ Regulations] by failing to inform members of the public prior to entering into a contract with those individuals and requiring payment that those individuals can obtain a service similar to the service offered by the Company free of charge through registration with the TPS and MPS."
The Secretary of State applied at the outset of the proceedings for the appointment of a provisional liquidator. This was refused by Judge Hodge on the Secretary of State's without notice application and successfully opposed, but on terms, by PLT when the matter came back before the judge after an adjournment for evidence, on 13 th May 2013. The most important term which the judge required, in lieu of appointing a provisional liquidator, was that PLT would not sell its services to new customers before the final hearing of the Petition, without informing customers that the services of TPS and MPS were available free of charge. In an extempore judgment given on that day, he concluded, without deciding anything finally, that the Secretary of State had a well-arguable case for a winding-up order in the public interest, including a case based on the alleged breach of Regulation 6. PLT duly gave that undertaking (and others) by counsel.
Faced with a potentially significant period (pending the final hearing of the Petition) when it would be unable to recruit new customers in the manner which it wished to do, PLT decided to change its marketing policy in various ways designed to address the allegations in the Petition. In evidence deployed on a renewed application to the judge, PLT produced a proposed new marketing script, a new form of confirmation of customer order, and an amended website. Its proposed new marketing policy (reflected in its script) included making it clear that part of its service consisted of registering customer details with the TPS and the MPS, but it declined to commit its marketing team to explain to prospective customers that the TPS and MPS services were provided by those entities free of charge to customers. This refusal became the main sticking point between the parties on PLT's application to vary its undertakings, and counsel for PLT invited the judge to treat the question whether continued trading (including recruiting new customers) without disclosing that the TPS and MPS services were available to the public free of charge would be a breach of Regulation 6 as a preliminary issue. This was opposed by counsel for the Secretary of State on the grounds that the issue was hypothetical rather than preliminary but, in view of its obvious importance to the parties (and their evident readiness to argue it in full), the judge acceded to PLT's invitation, and did determine that question as a preliminary, rather than merely interim, issue so that his decision on it would be binding at trial.
The judge took this course without identifying the precise factual basis upon which he was proceeding, whether it depended upon taking the facts alleged in the Petition as true or as assumed facts, or explaining the consequences for the binding nature of his determination if the facts alleged in the Petition turned out to be different in any material respect from the facts found at trial. He took this course, as far as I can ascertain, because both parties appeared to take it for granted that the issue could be finally decided, one way or the other, as a matter of principle, regardless of the detailed context of the trading in which the proposed new script was to be deployed.
For reasons which I shall explain in due course, the judge determined that for PLT to continue to trade and seek new customers without disclosing that the TPS and MPS services were provided to the public free of charge would involve a breach of Regulation 6. The result was that the application to vary the undertakings failed in limine, and the judge did not have to decide whether, had he reached the opposite conclusion on the preliminary issue, he would have permitted any, and if so what, variation in the undertakings.
The main (and in one sense quite short) issue on this appeal is whether the judge's determination of the preliminary issue was right or wrong. But PLT submits that, if it was wrong, this court should, without further ado, permit the variation in undertakings sought unsuccessfully on the application before the judge. After hearing Mr. Popplewell and Mr. Deacock for PLT, we made it clear that we would not, if PLT was otherwise successful, be minded to take that course. Since (as explained above) it had been unnecessary for the judge to embark upon that task, we considered that even if PLT succeeded in relation to the preliminary issue, it would be necessary for the question whether that success justified variation in the undertakings pending the final hearing of the Petition to be determined at first instance, there being no prior determination of issues relevant to that question suitable for an appellate review.
For similar reasons we made it clear that we would not be minded, even if PLT succeeded in relation to the preliminary issue, to address, for the first time, a new case under Regulation 5 advanced for the first time by the Secretary of State in a Respondent's Notice. Again, there has thus far been no consideration of that case (let alone an opportunity for PLT to respond to it with evidence) at first instance. Accordingly, the only issue which we considered it appropriate to decide on this appeal is whether the judge was right in his determination of the preliminary issue which I have described.
The TPS and the MPS
The TPS is a service provided by Ofcom, pursuant to Regulation 26 of the Electronic Communications (EC Directive) Regulations 2003 ("the Electronic Communications Regulations") which were made by way of implementation within the UK of Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communication sector ("the Electronic Communications Directive"). Both in its original and amended form, the Electronic Communications Directive required member states to provide, in summary, an opt-in or opt-out service to the public, free of charge, designed to ensure that unsolicited direct marketing...
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