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Case No: CCRTF/99/0945/6/7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LONDON COUNTY COURT
His Honour Judge Cowell
Royal Courts of Justice
Strand, London, WC2A 2LL
Thursday, 3rd February 2000
B e f o r e :
LORD JUSTICE PETER GIBSON
LORD JUSTICE WALLER
and
LORD JUSTICE BUXTON
|
NABADDA
& OTHERS
|
Appellant
|
|
-
and -
|
|
|
CITY
OF WESTMINSTER & OTHERS
|
Respondent
|
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
Mr. Robin Allen Q.C. and Mr. Tim Eicke (instructed by Messrs. Luqmani
Thompson & Partners of Wood Green for the Appellants)
Mr. Nigel Giffin (instructed by the Solicitor of Westminster City
Council) and
Miss Jenni Richards (instructed by the Solicitor for the London Borough
of Haringey) for the Respondents)
Judgment
As Approved by the Court
Crown Copyright ©
Thursday, 3rd February 2000
JUDGMENT
LORD JUSTICE BUXTON:
Background
1. In these proceedings four Swedish nationals, currently students in the UK,
sue two local authorities, Westminster and Haringey. The four students have
identical interests, as do the two authorities.
2. The students are pursuing a variety of courses which do not need to be
described further. Each of the students has for the purposes of their course
both a grant and a loan from a Swedish organisation, shortly called SNB. Each
of the students applied to the relevant English local authority for what is
conveniently called a "fees only" award: that is, an award not in relation to
their maintenance, but in order to defray the costs of their education. That
award is a "mandatory" award: meaning that, if the student fulfils the
qualifications laid down in the subordinate legislation creating the award, the
local authority is obliged by that legislation to make the award.
3. The relevant legislation in this case is the Education (Mandatory Awards)
Regulations 1997. The crucial regulation for this case is regulation 23, which
provides that a qualifying student shall not receive an award if he receives
from other sources any scholarship or similar award equalling the amount of his
fees. There is not to be taken into account in that process of calculation any
award or loan made under various English statutes. The authorities both took
the view that that required them to take into account the SNB loans: with the
result that the students received less than a full award. In so determining,
the authorities acted on the regulations as they stood in 1997. The
regulations were significantly amended in 1998 to add to the "exempted" loans
or awards any award made under legislation of any other member state of the
Community. An explanatory note to the amending regulations said that the
change had been made in order to avoid discrimination against students
supported by other member states.
4. As a direct result of that change, all of the students were informed in
February 1998 that they would receive a full award for that and any subsequent
years of their studies. Two of them had commenced judicial review proceedings
in relation to the authorities' earlier decision, but those proceedings were
necessarily and properly abandoned. With the students having received full
grants, and it being provided by the regulations that anyone in their position
was entitled to such a grant, that might have been thought to be the end of it
so far as the law was concerned. In these proceedings, however, the students
seek damages in respect of the initial refusal of a grant, though only in terms
of damages for injury to their feelings. For instance, in paragraph 13 of the
particulars of claim filed by Miss Nabadda, the particulars of damage are said
to "include" injury to feelings, but all the particulars in fact relate to that
latter head and no other.
The claims and the proceedings
5. The authorities have brought third party proceedings against the Secretary
of State asserting that in originally withholding the awards they were doing no
more than acting in obedience to his directions in the regulations.
Accordingly, if that act exposes them to liability, the Secretary of State
should indemnify them. In the court below the Secretary of State sought to meet
this claim by inviting the judge to hold, on a preliminary point of law, that
it had been open to the authorities to make the awards despite the terms of the
regulations. The judge rejected that argument in a cogent and wholly
convincing judgment. The Secretary of State entered a notice of appeal against
the judge's ruling, but the appeal was, prudently, withdrawn shortly before the
hearing before us. I need therefore say no more directly about this aspect of
the matter; though the relationship between the national government and the
authorities will re-emerge at a later stage of this judgment.
6. I turn to the students' claim against the authorities. The legal basis of
that damages claim is as follows. Although education as such does not come
within the competence of the institutions of the EU, vocational training does
so, as an adjunct to the EU provisions on freedom of movement of workers: see
Case 152/82 [1983] ECR 2323 (Forcheri v Belgium). Provisions for access
to such training are therefore governed by the prohibition on discrimination on
grounds of nationality contained in article 6 of the Treaty of Rome (now
article 12 of the Consolidated Treaty). For the purpose of the present
applications it is assumed, though very emphatically not conceded, that the
students' courses consisted of vocational training. On that basis, the
authorities concede that the witholding of the grant because of the SNB loan
constituted discrimination contrary to the terms of article 6. Such
discrimination was what, in English terms, would be characterised as indirect:
that is to say, that the students were not refused the grant because they were
Swedish, but because they were subject to a condition that, although not
confined to Swedish persons (because it would appear that a person of another
nationality living in Sweden would be eligible for an SNB loan), was plainly
much more likely to affect Swedish nationals than nationals of other EU
countries.
7. So far so good. The next and crucial step in the students' case is,
however, that they are by reason of such discrimination entitled to damages
within the English system under the Race Relations Act 1976 [the 1976 Act].
To the extent that (as is the case) certain provisions of the 1976 Act stand
in the way of granting the remedy sought in this case in respect of the breach
of article 6, those provisions must be disapplied or ignored, in deference to
the primacy of Community law. As it was put in the students' skeleton
argument before this court:
Parliament has chosen the Race Relations Act 1976 as the mechanism by which
acts of discrimination on grounds of nationality including discrimination
contrary to Community Law are to be remedied and...any provision of domestic
law which is inconsistent with directly enforceable Community Law rights must
be disapplied.
8. The 1976 Act in its relationship to Community law is thus crucial to this
case. It is important also at this stage to note that the claim is
deliberately not made under what might be called the general mechanisms
required of national law for recovery of reparation for breaches of directly
effective Community provisions that have been recognised by the Court of
Justice, in such cases as Case C6-90 [1991] ECR I-5347 (Francovich) and
Case C-46/93 [1996] ECR I-1631 (Brasserie du Pêcheur). The most
convenient summary of that jurisprudence is to be found in the most recent case
in the Court of Justice, Case C-127/97 [1998] ECR I-1531 (Norbrook), at
paragraphs 106-107 of the judgment. I shall refer to the relief envisaged by
that jurisprudence as Norbrook damages. To ground recovery for such
damages it has to be established, inter alia, that the breach of Community law
was "sufficiently serious" to justify a claim for compensation. No such
allegation is made in this case.
9. The formulation of the damages claim in terms of the 1976 Act gives rise to
a series of issues. The proceedings in the court below took the form of the
investigation of a list of preliminary questions agreed by the parties, which
were intended to illuminate those issues. Whilst readily acknowledging how
very much easier it is to see how a case can be shortened and clarified after
rather than before it has been argued, I nonetheless consider that the question
paper put before the judge was unnecessarily elaborate, and in some respects
did not accurately isolate the matters in dispute. That feeling is reinforced
by the fact that in both written and oral argument before this court the
questions were largely abandoned, in favour of an investigation of the
essential issues to which, it can now be seen, the case gives rise. The judge
did conscientiously address and answer each question, but again, significantly,
not in the forefront of his judgment, but in the course of a judgment that
addressed the issues in general terms. That judgment, if I may say so, was a
realistic and careful survey of an unfamiliar subject-matter, which
subject-matter was before the judge perhaps made to seem more complicated than
it in fact is. In what follows I shall address the issues as they emerged in
this court, rather than the preliminary questions as such. I trust that in so
doing I shall not be thought to intend any discourtesy to the judge, with whose
conclusions on the substance and outcome of the case I largely agree.
The rules of Community law on reparation
10. In some instances provisions of Community law, notably Directives, contain
requirements as to the penalties or compensation to be provided by member
states in the event of breach of the transposing provisions in the national
legal order. Damages provided for by such provisions are sui generis in
Community law and are governed by rules different from those applying to
Norbrook damages: see the observations of this court in Matra
Communications v The Home Office [1999] 1 WLR 1646 at p1655B-D. Where such
requirements are contained in a Directive, their meaning and effect, and the
obligation that they impose on the member state, are a question of
interpretation of the Directive: see for instance Case C-271/91 [1993] ECR I-4367 (Marshall). However, where, as will be the case with articles of
the Treaty, such as article 6 in our case, no specific provisions exist in
respect of reparation, then the claimant for damages rather than for a purely
public law remedy must rely in the national legal order on the jurisprudence of
Norbrook.
The claim made in this case
11. It will be apparent that the claim made in this case falls under neither
of those two categories of entitlement to damages. Mr Allen QC however
justified recourse to the 1976 Act, and then the removal from the provisions of
that Act of anything that would inhibit a claim based on Community law, by
arguing that there was a third principle of Community law, that the national
legal order was obliged to adopt. Although the argument was not put in quite
this way, it amounted to saying that the court should characterise the
Community claim in terms that approached as close as possible to a type of
liability to be found in domestic law, and then apply to that claim the
provisions for relief provided for that domestic claim. Thus, the students'
claim was in respect of discrimination on grounds of nationality by a local
education authority: such as is prohibited in domestic law by a combination of
sections 3(1) and 18 of the 1976 Act.
12. This argument at one stage was advanced, as in the extract from the
students' skeleton cited above, as if it depended on, or could be elicited
from, a specific decision on the part of Parliament to provide a remedy for
discrimination on grounds of nationality that comprehended discrimination in
Community as well as in domestic law. Such a characterisation of the 1976 Act
is however unsustainable, and was not persisted in. Whilst it is correct that
Section 3(1) of the 1976 Act repeated the definition of "racial grounds" in
section 1(1) of the Race Relations Act 1968, but with the addition of the word
"nationality", that was not done with article 6 in mind. Rather, it was
generally understood at the time of the 1976 Act that that addition was made to
offset the effect of the decision of the House of Lords in Ealing LBC v Race
Relations Board [1972] AC 342, that "national" in the expression "national
origins" meant national in the sense of race and not of citizenship: with the
inconveniences for the effective control of discrimination that were pointed
out by Lord Kilbrandon in his dissenting speech in that case. I understood Mr
Allen to agree, in broad terms, that that was so. And had Parliament decided,
in this case, to make specific provision for one Community liability, under
article 6, despite having made full and necessary provision for the discharge
of Community obligations in the European Communities Act 1972, it is very
unlikely that it would have done so through the medium of an Act that covers a
very wide range of acts and offences that have nothing to do with Community
law.
13. Rather than rely on anything specific in the nature of the 1976 Act, or in
the intentions of the legislature in passing it, therefore, the proposition was
advanced in much broader terms: that where there happened to be, in the
national legal order, provisions addressing a case that could be characterised
in the same terms as the Community claim, those provisions must be applied to
the Community claim in preference to the Norbrook jurisprudence. The
latter was merely a fall-back or reserve provision, to be resorted to only
where there was no specific remedy of the type just described provided by
national law.
14. I do not find it easy to address this argument, because it has no basis
whatsoever in authority or in general jurisprudence. As Mr Giffin for
Westminster pertinently remarked, it is difficult to see what the agonised
debate about the availability of damages for breaches of provisions of the EU
treaty, which started in this court in Bourgoin SA v Ministry of
Agriculture [1986] QB 716 and continued both in this country and in the
Court of Justice in the Factortame litigation, was all about if the
simple solution now proposed was all the time available. Nor is it possible to
reconcile the argument with recognised principles of Community law.
15. It has long been trite law that in the absence of any specific Community
rules it is for the national legal order of each member state to formulate
rules for the assertion of directly effective Community rights, provided that
those rules are not less favourable than those governing the same right of
action on an internal matter. The foregoing is effectively a quotation from
the judgment of the Court of Justice in Case 45/76 [1976] ECR 2043[13]
(Comet). Mr Allen said that his case was consistent with, indeed relied
on, the jurisprudence in Comet. That jurisprudence is emphatic in not
requiring the national legal order to provide a remedy for breach of a
Community provision that is more favourable than the remedy available for an
equivalent breach of domestic law. But the students' case requires this court
to do exactly that. They argue that the 1976 Act has to be applied to the
Community claim shorn of terms that make that Community claim inadmissible:
inadmissible not because it is a Community claim, but because it does not
fulfil requirements imposed in the case of domestic claims. That is quite
inconsistent with the jurisprudence established in Comet and other
cases.
16. In my judgement, therefore, the claim made under the 1976 Act fails in
limine. No such third principle as contended for by Mr Allen exists, and
there is therefore no basis for bringing the claim under the 1976 Act, and much
less for requiring the 1976 Act to be applied in an amended form in order to
accommodate the claim. That conclusion can be supported, or further expounded,
by reference to other aspects of the case. Of these, the most prominent is the
impact of section 41 of the 1976 Act.
Section 41 of the 1976 Act
17. Section 41 exempts from liability for discrimination under the 1976 Act
anything done, inter alia, in pursuance of any enactment, Order in Council or
instrument made under any enactment by a Minister of the Crown. Regulation 23
was such an instrument, and is relied on as such by the authorities.
18. It is easy to see why section 41 was enacted. Acts done in pursuit of
policies approved, either at first or at second hand, by Parliament are not to
be proceeded against as discriminatory, even if they are in fact such. It will
be immediately seen that this is another clear reason why the 1976 Act is inept
as an instrument to enforce Community law. Breaches of Community law are not
excused or exempted simply on the ground that they are committed by the
national government of a member state, or simply because they have legislative
approval. That, amongst other things, was decided by the Factortame
litigation. But if the 1976 Act were indeed the chosen instrument for the
enforcement of breaches of article 6, it could nonetheless not be deployed
against breaches committed by the national government, as I understood Mr Allen
to accept. As Miss Richards pointed out in an intervention that was as
effective as it was economical, it is therefore the singular result of the
students' argument that a legislative act could only be the subject of a
damages claim if it met the Norbrook criterion of sufficiently serious
breach: whereas the authorities, by acting in obedience to that legislation,
make themselves subject to liability free of any such limitation.
19. The significance of section 41 is however not only for the further light
that it sheds on the appellants' basic position, but also more directly because
the authorities contend that section 41 provides them with a complete defence
to the claims. Mr Allen sought to meet that contention by two arguments.
20. The first was that by normal principles of Community law any provision in
national legislation that was inconsistent with Community law must be ignored
or disapplied. Section 41 fell into that category precisely because it had the
effect of depriving the students of the remedy that they sought for a breach of
article 6. This argument is difficult to grapple with, because it depends on
the assumption that Community law does have a legitimate interest in the terms
and operation of the 1976 Act: an assumption that, as I have already
demonstrated, is unfounded. One may, however, add that the rules of Community
law relied on for this purpose (e.g. in Case 106/77 [1978] ECR 629 [15]-[21]
(Simmenthal)) have been concerned with national provisions affecting the
substantive application of Community law, rather than with reparation for
breaches of that substantive law. The reason for that is not far to seek. The
relationship between Community and national law in respect of damages is
governed by the specific jurisprudence set out earlier in this judgment. That
jurisprudence applies to the national legal order directly, and not through the
medium of national provisions drawn for different purposes.
21. This aspect of Mr Allen's argument was put to the judge, and rightly
rejected by him. Mr Allen's second riposte to the authorities' reliance on
section 41 was not advanced below, and was not to be found in his skeleton
argument. It was that section 41 must be read as only protecting a person who
acts lawfully in pursuance of an enactment, etc. The regulations being,
as was admitted, unlawful in the sense of being in breach of article 6, the
authorities when acting in pursuit of them could not be acting under section
41, and therefore were not protected by it.
22. Mr Giffin did not seek any indulgence in order to meet this new point, but
resourcefully adduced six reasons why the argument was wrong. It is only
necessary to mention the essential elements in this submission. First, the
construction, depriving the authorities of protection if the legislation under
which they acted was in fact unlawful, breached both the literal wording of the
provision and the general expectation of English law. Second, there was
nothing in Community law that rendered section 41 invalid. Community law only
required the national legal order to provide adequate remedies for a breach of
a Community provision. The English system, including section 41, still
provided the remedies of judicial review, and of Norbrook damages,
albeit in the latter case against the national government. It was of no
concern to Community law which organ of the state was held liable, provided
that reparation in Norbrook terms was available somewhere within the
national legal order: see Case C-302/97, Konle, at paragraph 63 of the
judgment of the Court of Justice. And it was for the national legal order to
decide which heads of damage (including, in this case, damages for injury to
feelings) were recoverable: Case C-46/93 [1996] ECR I-1631 (Brasserie du
Pêcheur), at paragraph 88 of the judgment of the Court of Justice.
23. Those submissions are, in my view, entirely well-founded. They reinforce
the conclusion already reached that the appellants' contentions are
misconceived.
Disposal of the appeal
24. In dismissing the appeal for the reasons set out above it is necessary to
do no more than declare that the acts of discrimination alleged in the various
Particulars of Claim were by reason of the provisions of section 41(1)(b) of
the Race Relations Act 1976 not unlawful. If my Lords are of the same opinion,
that finding also has the effect of disposing of the various actions, which
make claims only under the 1976 Act and not in Norbrook terms:
understandably in the latter instance in view of the need to establish that the
breach was sufficiently serious; the substantial doubt as to whether such
damages can be sought in the English courts for injury to feelings; and serious
difficulty as to whether university courses such as those pursued by the
students qualify as vocational training for the purposes of Community law: as
to which see Case 293/83 [1985] ECR 606[30] (Gravier); Case 293/85
[1988] ECR 305, in the observations of Advocate-General Sir Gordon Slynn at
pages 335-336 of the report; and R v ILEA ex p Hinde [1985] 1 CMLR 716
(university law degree not vocational training). In the event, however, we do
not interfere with the judge's order that the actions be dismissed.
LORD JUSTICE WALLER:
25. I agree
LORD JUSTICE PETER GIBSON:
26. I also agree.
Order: Appeal dismissed. Costs of the first and second respondent to
be paid by the Legal Aid Board under section 18, the appellant's contributions
to be assessed as nil unless informed otherwise by Monday 7 February 2000
(according to counsel's understanding). Costs incurred by reason of the third
party's respondent's notice to be paid by the third part. Permission to appeal
to the House of Lords refused.
(Order does not form part of approved judgment.)
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