England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(CROWN OFFICE LIST)
(Mr Justice Newman)

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 15th March 2001

LORD JUSTICE HENRY:

1. This is the judgment of the Court. This is an appeal by a higher education institution, who presently call themselves Liverpool Hope University College, against the order of Mr Justice Newman dated 15 December 1999 dismissing its application for judicial review. In the judicial review proceedings the appellant sought to challenge the legality of the implementation by the Secretary of State of legislation which prevents the appellant (and other such institutions) from calling itself a "university college" or any name including the word "university", until it obtains Privy Council approval for a change in its formal title. The appellant specifically complains about the timing of the implementation of the legislation, which afforded no possibility to the appellant to seek and obtain Privy Council approval for a change in title before the legislation which outlawed its preferred name was brought into effect. The appellant would have been required to take immediate steps to stop using the name "Liverpool Hope University College" in all its literature from 1 February 1999 until such time as it had succeeded in obtaining (a) taught degree awarding powers, and (b) Privy Council approval to change its legal name to Liverpool Hope University College. Assuming the appellant would ultimately succeed in obtaining approval (and the appellant was confident that it would) this would involve two changes of name in the space of a few years. The appellant considered that the loss of reputation in the meantime would be incalculably high, and the expense involved in two changes of name would be substantial.

The background

2. The appellant is a higher education institution whose origins date to the 1840s. In 1980 the three constituent colleges joined together to form a federal institution, established by a trust deed with the title "Liverpool Institute of Higher Education" ("LIHE").
3. In 1992 higher education was reformed by the Further and Higher Education Act 1992 ("FHEA"). All polytechnics became universities.
4. The 1992 Act caused LIHE's governing council to become concerned to adopt a name which would clearly reflect its position. By a letter to the Department dated 4th November 1992, the Rector stated:

"I am sure that it will come as no surprise to you that in considering a name, the Institute would wish to choose one which clearly reflects its position within the university sector of HE. I am in discussions with the University of Liverpool, which has validated the degrees at LIHE since its inception, and with which we are just concluding an accreditation arrangement about future relationships including the title."

The Department replied:

"As far as a new title is concerned, it will fall to the Privy Council to consider any application for a title which includes the 'university'. They have issued a guidance on this. I also enclose a copy."

The significance of the appellant's relationship with Liverpool University is this. One of the distinguishing features of a university is that they have their own taught degree awarding powers. The appellants did not want nor need the powers because of their close relationship with Liverpool University who provided their degree awarding services for them.

5. For various reasons (of which its model relationship with Liverpool University was one) LIHE did not wish to become a university and accordingly began (as did a number of other institutions) to consider instead a title including the words "university college", to reflect its close relationship with Liverpool University.
6. However following changes introduced by s.77 FHEA, any name for a further educational establishment which included the word "university" would need to be authorised or approved by the Privy Council. Also, s.77(4) provided that

"... any educational institution whose name includes the word 'university' … is to be treated as a university for all purposes."

7. This meant that the LIHE could not take on a formal title including the words "university college" without first taking the necessary steps to become a university – which it did not wish to do.
8. On 31 October 1995, the appellant's governing council agreed "... to move as rapidly as possible ..." to change its title from LIHE to Liverpool Hope University College "... and to adopt such interim measures as were necessary to achieve such recognition." At that time the appellant was well aware that the Department of Education and Employment was concerned about educational establishments calling themselves universities when their formal legal titles did not justify their use of that name. That concern was founded on the perceived need to protect students against the use of names which might confuse or mislead students and others as to the standing and nature of the institutions concerned. Illegitimate claims to the use of the name university were seen to threaten the reputation of the UK higher education sector at home and abroad.
9. From that time on the appellant, both formally and informally, has presented itself to the public as Liverpool Hope University College, although this informal name did not reflect its legal title.
10. In November 1996 the appellant was incorporated as a company limited by guarantee, still with the name Liverpool Institute of Higher Education. Once incorporated, its use of a name other than its formal name arguably brought it within the ambit of the Business Names Act 1985 and the Companies and Business Names (Amendment) Regulations. These provide that a company shall not carry on business under a name including the word "university" without the approval of the Secretary of State. The appellant did not obtain such approval but continued to present itself in public as Liverpool Hope University College.
11. In April 1997 the appellant applied to the Privy Council to change its name from "Liverpool Institute of Higher Education" to "Liverpool Hope". Approval was obtained and the change of name was effected on 24 September 1997. The appellant's legal name is still "Liverpool Hope" although it continues to use the name "Liverpool Hope University College" and has, somewhat provocatively, brought this challenge in that name. To avoid trampling on any sensibilities, we will refer to the institution as the appellant from now on in this judgment.
12. The appellant knew that the use of the words "university college", where they did not match formal titles, had been actively discouraged by the Department for Education since 1992. The appellant is a member of the Standing Conference of Principals ("SCOP") which had been lobbying for recognition of "university colleges" since that time. The Secretary of State had considered, and rejected, proposals put forward by SCOP in its paper, "The Case for University Colleges", in 1993. The Minister of State wrote to the Chairman of SCOP and stated:

"Under your proposals, the general public would be unable to tell from an institution's title whether it was a college or a university, or, in your words, a college with 'full independent constitutional and financial status'… I appreciate that, from SCOP's perspective, such confusion may not be particularly important, but the Government has a wider responsibility to the varying consumers of Higher Education, both here and overseas…

[It would] be quite misleading to use a phrase which implies that non-university institutions were, somehow, universities. Also, for this reason, the Government cannot endorse the use of similar, informal by-lines by colleges themselves."

13. In the first half of 1996 the government again reviewed its policy and decided that it would not be appropriate to change the policy at the present time, as this would require changes in legislation. The Secretary of State, Gillian Shephard, decided she would prefer to look at the issue again when the Dearing Committee had made its report.

The Dearing Report

14. The National Committee of Inquiry into Higher Education (the Dearing Committee) was set up in February 1996 and it produced its report in July 1997.
15. So far as concerns this appeal there were two issues. The first issue dealt with the need to achieve clarity and consistency in the use of institutional titles, and to ensure that there was no discrepancy between the legal title of the institution and the name it uses. This was the subject of recommendation 62, and reflected a generally perceived problem.
16. The second issue concerned the status of institutions calling themselves (as the appellant did) university colleges. This reflected a more specialised problem, only affecting "university colleges". But they were caught by Section 77(4) of FHEA which provided:

"Any educational institution whose name includes the word 'university' by virtue of the exercise of any power as extended by subsection 1 above is to be treated as a university for all purposes."

This issue was the subject of recommendation 65.

17. As to the first issue, (Recommendation 62) under the heading "Clarity of institutional status" the Report stated:

"The second discipline which concerns us here is the title and name used by institutions to describe themselves to students and others. In the interests of public understanding there needs to be clarity and consistency in the use of both institutional titles (that is, how the Privy Council or Secretary of State has named the institution) and the use of institutional names (that is, how the institution describes itself to students and the wider public). At present, titles and names do not always match. Nor do they always define sufficiently clearly membership of a particular institutional category. While a number of institutions have adopted names which they feel properly reflect their status, some of these might be described as owing more to aspiration than to the present facts. It has been put to us that a small number of institutions have exploited a perceived difference in the law concerning the name under which they operate and the law concerning the legal title. This applies particularly to the use in public statements of the word 'university' within the names of institutions which do not carry that legal title and to the use of descriptors such as 'university sector' which have no legal basis. This is confusing and misleading for students and others. It also leads to weakened public confidence in the sector.

We consider it an important principle that there should be recognised criteria associated with each institutional title and type of institutional category. It should be made clear to institutions that the requirements of the Business Names Act 1985 and the Further and Higher Education Act 1992 restrict the use of business names and titles. There should no longer be scope for any discrepancy between the legal title of the institution and the name it uses where this would be misleading.

Recommendation 62

We recommend to the Government that it takes action as soon as possible to end the scope for a confusion between the title and the name used by institutions, either through clarifying the legal position or by ensuring that conditions can be placed on the flow of public funds so that these go only to those institutions which agree to restrict their use of a name and title to that to which they are legally entitled." (emphasis added)

18. Under the heading "The 'university college' title", the Report states:

"The previous Government asked us to consider the use of 'university college' titles. We took evidence from a second group of institutional representatives seeking some discipline in the pattern of institutions by the creation of a new and tightly specified category, the 'university college'. We also heard from the chair of the working party set up by the Committee of Vice-Chancellors and Principals to explore this matter.

At present, the 'university college' title applies legally only to those institutions which are constitutionally part of a university, such as University College, London; or where a pre-1992 university has bestowed the title under one of its Charter powers. However, the name is currently being used much more widely by institutions which have taken no legal steps to secure a change in their title. There is concern about the proliferation of the use of the name and variants of it, especially by further education colleges, some of which obtain use of the name under the terms of a university's charter. We agree that the use of the 'university college' designation should be limited by clear criteria to give unambiguous meaning to its use.

Those who advocate a new legal category of institution using the 'university college' title argue that it would recognise that there is a group of colleges of higher education which offer programmes of the same standing and standards as universities. This, we were told, would better reflect their true nature, properly denote the quality of their provision, and accurately depict the rigour of their quality assurance arrangements. They argue that it would thereby serve to correct mis-perceptions amongst students and others, whom they feel tend to believe that colleges of higher education are of lesser standing and quality than universities and therefore discriminate against them in their decisions. These colleges believe that a new title is needed for the new category, to recognise a particular facet of institutional diversity: the extent to which they share defining characteristics of universities and yet remain colleges. They have become particularly concerned that the 'university college' title is being used by some institutions with no legal claim to it and that it has become misleading.

Titles incorporating the word 'university' must be applied consistently and widely understood in the UK and overseas. To that end, there should be a restriction on the use of the 'university college' title. On the basis for authorising the use of the title 'university college', the arguments are balanced between three options: restricting the usage to institutions which are a constituent part of a university; extending the usage to those institutions which have in their own right taught degree awarding powers; and applying it to colleges of higher and possibly also further education which have a particular relationship with one university. We prefer the second of these…."

Only the third option would have assisted the appellant in its current position, having no taught degree awarding powers; the recommendation made did not assist:

"Recommendation 65

We recommend to the Government that it takes action, either by clarifying the legal position or by ensuring that conditions can be placed on the flow of public funds, to restrict the use of the title 'University College' to those institutions which are in every sense a college which is part of a university under the control of the university's governing body; and to those higher education institutions which have been granted taught degree awarding powers."

The Government Response to Dearing

19. Following a consultation exercise, the Government published a detailed response to the Dearing Report on 25 February 1998.
20. The Government's response to recommendation 62 was as follows:

"The Government agrees that the confusion between the official titles of institutions and the names they use to present themselves to the public should be ended. It is misleading to students and damaging to the reputation of the higher education sector. Higher education institutions are urged not to use names to which they are not entitled. If confusion continues, the Government will seek to clarify the law either through the courts or by bringing forward legislative proposals."

21. The Government's response to recommendation 65 was as follows:

"The Government accepts that there is a convincing case for creating a new category of institution to which the title 'university college' can be given. It agrees with the Committee that this title should be available in future not only to those institutions which are in every sense a college which is part of a university under the control of the university's governing body or otherwise full members of a federal university; but also to those higher education institutions which have been granted taught degree awarding powers. Like the Committee, the Government has carefully considered the argument that the university title should also be available to institutions having a particular relationship with one university, but it is not persuaded that such an extension of the title would be in the interest of public understanding."

22. So the government broadly accepted the Dearing recommendation that the title "university college" should be restricted to colleges which are part of a university and institutions which have been awarded taught degree awarding powers. The appellant did not meet either test. The appellant's particular case ("... a particular relationship with one university ...") was considered and rejected.
23. The appellant had in fact decided to apply for taught degree awarding powers as early as November 1996 (anticipating that Dearing might use the possession of degree awarding powers as the criterion for approving the use of the "university college" title) and a draft application had been prepared. However in May 1997 it had decided to put its application on hold pending publication of the Dearing Report. It is not clear from the appellant's evidence why it did not proceed with its application after the Dearing Report was published in July 1997; but no application had been lodged when the government published its response to the Dearing Report in February 1998.
24. Once the government response was published, the taught degree awarding powers avenue was, for all practical purposes, closed to the appellant, at least for the time being, because the government had also accepted a separate recommendation in the Dearing Report that there should be a review of the arrangements for granting degree-awarding powers. As a result the government asked the Quality Assurance Agency for Higher Education (the "QAA"), the body charged with considering applications for taught degree awarding powers, to carry out such a review and report back by the end of the year. All applications for taught degree awarding powers received after 25 February 1998 were put on hold. It would not even be possible for the appellant to make an application until the new criteria were agreed and published. We are informed by the appellant that the QAA did not issue criteria until 29th September 1999, with the linked Guidance not available until 13 December 1999. The appellant then applied for taught degree awarding powers and, the QAA took an interlocutory decision in the appellant's favour (that the appellant had made out a prima facie case warranting a full scrutiny) in December 2000. However, no final decision is likely until the Summer of 2002. That is to say, because of the QAA review recommended by Dearing, the time span from the availability of appropriate criteria to final decision would be some 2½ years in this case.

Implementation of the Dearing recommendations

25. Within a matter of months, Recommendation 62 of the Dearing Report was given effect by s.39 of the Teaching and Higher Education Act 1998 ("THEA"). The relevant part of that section reads:

"(1) A relevant institution in England & Wales shall not, when making available (or offering to make available) educational services, do so under a name which includes the word 'university' unless the inclusion of that word in that name is-

(a) authorised by or by virtue of any Act or royal charter, or

(b) approved by the Privy Council for the purposes of this section.

(2) A person carrying on such an institution shall not, when making available (or offering to make available) educational services through the institution, use with reference either to himself or the institution a name which includes the word 'university' unless the inclusion of that word in that name is authorised or approved as mentioned in subsection (1).

...

(5) In approving the inclusion of the word 'university' in any name for the purposes of this section the Privy Council shall have regard to the need to avoid names which are or may be confusing."

26. The effect of s.39, once it came into force, would be to prohibit educational institutions from using a name including the word "university" without prior approval. That of course would include the appellant. In the appellant's case approval would need to be obtained from the Privy Council, who under sub-section (5) were statutorily obliged to take into account the need to avoid names which are or may be confusing.
27. Recommendation 65 of the Dearing Report was given partial effect by s.40 of THEA. This amended s.77(4) FHEA so that it now reads as follows (with the added words underlined):

"(4) Any educational institution whose name includes the word 'university' by virtue of the exercise of any power as extended by subsection (1) above is to be treated as a university for all purposes, unless in that name that word is immediately followed by the word 'college' or 'collegiate'."

28. The significance of that amendment was this. The appellant did not wish to qualify as "... a university for all purposes ...". It wished to continue its relationship with Liverpool University and to describe itself as "Liverpool Hope University College", without having to be "... treated as a university for all purposes ...".
29. So it will be seen that s40 did not directly implement Recommendation 65. The recommendation was that the government take action to restrict the use of the "university college" title to institutions which were part of a university, or held taught degree awarding powers. S.40 simply made it possible for non-university institutions to hold the "university college" title, subject to approval. S.40 did not enact the restriction – that was dealt with by s.39; and it did not set out the conditions that would be necessary for approval – these were not enshrined in statute.
30. In its response to the Dearing Report in February 1998 the Department had suggested that one route to the "university college" title might be "full membership of a federal university". This looked a more painless route to approval of the "university college" title than applying for taught degree awarding powers, and the appellant was encouraged by Baroness Blackstone agreeing to Professor Lee's assertion at a conference in March 1998 that there was no advantage in insisting on taught degree awarding powers for the appellant, given its model partnership with Liverpool University. And by this time the QAA had stopped processing applications for taught degree awarding powers (see paragraph 24). But this possibility came to an end when the government did not mention the federal university concept in the Department's letter of 3 June 1998 as to the nature of amendments to Bill to be moved on 9th June. Consequently, it was only in June 1998 that the appellant realised that the only route to use of the title open to it would be to apply for and acquire taught degree awarding powers. That letter was headed "Institutional Titles", and dated 3rd June 1998.
31. It set out the purpose of the amendments, namely to ensure that the title "university college" could be authorised for those institutions which met the appropriate criteria, and to ensure that names including the word "university" are not used by institutions in the higher and further education sectors without proper authorisation. The letter concluded:

"We intend that the provisions which facilitate the approval of the 'university college' title would be brought into operation quickly. The statutory duty not to use unauthorised titles will be brought into operation after a reasonable interval."

32. The appellant submits that it was still not unduly concerned, because statements made in June 1998 when the legislation was put forward led it to believe that the government would delay implementation of the s.39 prohibition until institutions like the appellant had been given a chance to comply with the conditions for use of the title, namely the acquisition of taught degree awarding powers. Particular importance is attached to what the Minister said in Parliament.
33. The amendments were introduced in Parliament on 9 June 1998 by the Minister, Dr Kim Howells. He was dealing with the Government's proposal to implement both Recommendations 62 and 65. He separately identified each problem: first that too many institutions were using unofficial titles that had not been authorised and which could be confusing to students and others. Second, he said that there was a place for a new category of "university college" for higher education institutions that fall short of full university status, but have the power to award their own degrees. Each recommendation was dealt with by a separate amendment, but both were put forward at the same time. He said that the Government had decided to tackle both problems, the first by forbidding higher educational institutions to use unauthorised names, breach to be punished by injunction. He indicated the Government's acceptance of the new category of "university college". He then concluded:

"We intend that the provisions which facilitate the approval of 'university college' titles would be brought into operation quickly. The statutory prohibition on using unauthorised titles will be brought into operation after a reasonable interval to allow institutions to take it into account."

34. It is clear that "it" in the last line can only refer to the section 39 statutory prohibition against any institution using the word "university" in its name when the use of that words was neither authorised nor approved. The mischief aimed at is clearly that identified by Recommendation 62; those who use misleading names should be the object of legal action to end the source of confusion as soon as possible. As to the first sentence quoted above, Section 40 was brought into operation on 1st October 1998, which was quickly.
35. On 15th September 1998 there was a Departmental memorandum dealing principally with the lead-in period for section 39, the statutory prohibition on the use of unauthorised titles. But the one paragraph dealing with section 40 is instructive. The recommendation was that section 39 be brought into effect in February "... before the next batch of prospectuses are published. In this way institutions would have fair warning ..." of its coming into force. And then:

"It is likely that some institutions will argue for a longer lead-in period, especially as some of them may hope to obtain taught degree awarding powers and legitimate 'university college' titles during next year. However, it would be difficult to delay implementation beyond the time-table proposed without losing another whole year. Once new prospectuses are published, institutions would no doubt plead that they could not comply before 2000. We do not think we should wait that long."

36. This memorandum was submitted to Baroness Blackstone and copied to the Secretary of State. That last quotation shows clearly what Dr Howells intended when in Parliament he said:

"The statutory prohibition on using unauthorised titles will be brought into operation after a reasonable interval to allow institutions to take it into account."

The "reasonable interval" therefore reflected the fact that

"... it would take institutions some time to revise their prospectuses and other publicity material to comply with the prohibition."

The Department clearly recognised and accepted the difficulties that aspirant university colleges would face.

37. On 23 September 1998 the Department wrote to SCOP concerning the timing of the implementation of the provisions.

"You will be aware that the Teaching and Education Act 1998 includes provisions about institutional titles in the further and higher education sectors. I am writing to say how the Department intends to proceed with the implementation of these provisions.

Section 40 of the Act enables formal 'university college' titles to be approved, in appropriate cases, without having the anomalous effect that the institution concerned would legally then obtain full university status. A Commencement Order was made on 3 September covering this provision, and it will come into force on 1 October.

Section 39 of the Act contains provisions on the unauthorised use of titles including the word 'university'. The Department proposes to make a Commencement Order in due course to bring these provisions into effect from 1 February 1999. We believe that this should enable institutions to take account of the provisions in finalising their prospectuses for the academic year 2000-2001. The Department would expect all such prospectuses and other material produced after 1 February 1999 to comply with the legislation.

We are aware that existing prospectuses may need to be used for some purposes after that date. To avoid misleading students about the title and status of the institution, it would be highly desirable to include a letter or correction slip explaining the position wherever possible.

If you wish to comment on these proposals, I should be grateful to receive your comments by 19 October 1998."

The use of the term "highly desirable" in relation to compliance with section 39 in the fourth paragraph of that letter seemed too permissive for the Vice-Chancellors, CVCP replying that all should be required to comply with section 39 immediately after section 39 took effect (1st February 1999).

38. To summarise the effect of the proposals, the effect of the section 40 amendment coming into force on 1st October 1998 was to give the green light to any institution to seek authorisation or approval for the use of the title "university college". But if they had not obtained that authorisation or approval by 1st February 1999, section 39(1) would then come into force, forbidding the use of the word "university" in the name unless the use was authorised or approved under section 40. From what we know, it would not have been possible for the appellants to comply with that time-table, given that the QAA did not issue their criteria for taught degree awards until 29 September 1999, and the linked Guidance only on 13 December 1999. We are now told that the decision will not be taken until the Summer of 2002.
39. The letter invited comments on this proposal. SCOP responded very briefly on 15 October 1998 as follows:

"There are serious concerns about the February 1999 deadline particularly given that the revised criteria for taught degree awards powers have not yet been published.

We would therefore urge a more realistic and reasonable alignment of the 1999 Commencement Order and criteria publication dates to enable compliance with the Act."

40. The Council for Church and Associated Colleges ("CCAC") also took the fairness point made in paragraphs 37 and 38, pointing out that

"... a February 1 deadline would disadvantage a number of institutions which are likely already to be able to meet any reasonable criteria."

41. The Department reviewed its decision in the light of the consultation and wrote to interested parties on 13 November 1998 stating that Ministers had considered the various views expressed and had decided to implement the provisions as proposed with effect from 1 February 1999. There was a second Departmental memorandum dealing with the results of that consultation process, dated 22nd October 1998. This shows that the difficulties caused by the revised process for taught degree awarding powers had been appreciated, and that it was considered to be likely that there could be an 18 month to two year delay before successful institutions were awarded the title. The 1st February date for the Commencement Order for section 39 was confirmed after argument in which it was said:

"Ministers have previously indicated that they do not want to make any concessions beyond the February deadline. Dr Howells said during the passage of the Bill that there would be a reasonable interval to allow institutions to take the change into account. Nine months seems to be a reasonable interval. To allow any concession for institutions 'in the pipeline' would involve at least another year of delay, and probably longer, before the prohibition could be enforced."

42. The Commencement Order was duly made, and was promptly greeted with the letter before action from the appellants, followed up on 11th February 1999 by the commencement of proceedings for judicial review. The challenge is to the commencement date of 1st February 1999 for section 39 of the Act. The application is to strike down article 2(4) of the Teaching and Higher Education Act, 1998 (Commencement No 4 and Transitional Provisions) Order 1998.
43. The consequences of this decision for the appellant were described by the appellant as "disastrous". As detailed in paragraph 1 of this judgment, the effect of this is that if they complied with the law, it would mean two name changes, rather than one.
44. In the event, the "disaster" was averted or postponed, because we are told that the Secretary of State has not enforced section 39 against the appellant pending the outcome of this appeal. As Dr Howells informed Parliament: "The amendments create a statutory prohibition but not a criminal offence", the contemplated manner of enforcement being injunction proceedings.
45. The application to the judge was made on three grounds: (1) that the manner of implementation was an abuse of power because it frustrated the intention of Parliament; (2) that it was substantively unfair; and (3) that it was disproportionate interference with the appellant's rights under the EC Treaty. The judge rejected all three arguments and this appeal is brought on similar grounds.

Frustration of the intention of Parliament

46. Since the hearing of this appeal, we have had "updating notes" from both the appellants and respondents. By his note, the Secretary of State accepts that it is appropriate, in the particular circumstances of this case, for the Court to have recourse to the statement of Dr Howells published in Hansard as an aid to statutory construction. By way of explanation he adds:

"Following the hearing of this matter on 12 December, the Appellant has (quite properly) drawn the Court's attention to the speeches in the House of Lords in R -v- Secretary of State for the Environment, Transport and the Regions, ex parte Spath Holme Limited, which were delivered on 7 December 2000.

At the time of the hearing, although counsel for the Respondent was aware that the House had recently overturned the Court of Appeal's judgment in that case, he was not aware that the speeches had a direct bearing on this case, nor had he seen a transcript of the speeches.

Having now had an opportunity to consider the transcript, the Respondent accepts that it is appropriate, in the particular circumstances of his case, for the Court to have recourse to the statement of Dr Howells published in Hansard as an aid to interpretation when seeking to discern the intention of Parliament.

As is clear from the report of the case published in The Times on 13.12.00 (a copy of which has been provided to the Court by the Appellant), both Lord Nichols and Lord Cooke expressly approved reference to Hansard as an aid to the interpretation of statutory purpose. In addition, both Lord Bingham and Lord Hope approved such an approach in cases where a minister had given a categorical assurance to Parliament that a power would never be used in a given situation. In the present case, the Appellant contends that Dr Howells gave a categorical assurance to Parliament that the power of implementation in relation to ss 39 and 40 of the Teaching and Higher Education Act would be used in a certain way. The Respondent accepts that the Court should be entitled to have regard to the statement of Dr Howells in order to determine whether or not he made a clear and unambiguous representation to Parliament in the terms alleged by the Appellant.

Finally, the Appellant has drawn the Court's attention to the prima facie decision taken by QAA on 13.12.00. As is made clear in the letter from the QAA dated 14.12.00, a copy of which is attached to the Appellant's Updating Note, this 'should in no way be taken as an indication of an ultimately successful outcome of the institution's application'. Further, no final decision is likely before the summer of 2002." (Emphasis added)

The appellant adds his analysis of the effect of that limited concession.

"This appeal was argued on 12.12.00. It is proper to draw two things to the Court's attention. The first relates to the main point: the meaning of the June statements.

(1) Counsel referred to the Spath Holme case as illustrating the use of Hansard to discern legislative purpose. But he indicated, prompted by Counsel for the Secretary of State, that the result in that case had recently been overturned by the House of Lords. That is correct (The Times 13.12.00, attached). In Spath Holme the House of Lords held that resort to Hansard there: (a) was impermissible (3-2) because in that statutory context the issue of legislative intent gave rise to no problem of ambiguity or obscurity; and (b) did not assist (5-0) there being varying and inconclusive policy statements.

(2) The Secretary of State accepts in the present case that, if the June statements were clear and unambiguous, the Appellant is entitled to succeed in its appeal (on the Padfield point). Counsel for the Secretary of State has confirmed that this test remains his position and that he will be lodging a short note of explanation. On this basis the argument was cut short and the Appellant did not need to develop (a) the justification in the present context for resort to Hansard or (b) the alternative arguments.

Secondly, the skeletons (App para 11; Resp. para 53) refer to the QAA's imminent "prima facie" decision (13.12.00) on the Appellant's application for taught degree awarding powers. That decision has been made and is favourable to the Appellant (please see attached letter of 14.12.00, together with the earlier explanatory letter of 21.09.00)."

Accordingly, we proceed on that basis, and look to see whether Dr Howells gave a clear and unambiguous representation to Parliament in the terms alleged by the appellant.

47. Before proceeding to the detail of the argument, we sound a note of caution as to paragraph 7(1) of the appellant's skeleton argument dated 6th November. This does not, in the short passage quoted, accurately record what Dr Howells said in Parliament on 9th June 1998 (paragraph 33 above), but mistakenly reproduces the passage from the letter of 3rd June 1998 (paragraph 31 above).
48. In examining the intention of Parliament it is accepted that we may look at the Dearing Report (particularly those of its recommendations which were accepted), departmental minutes and other documents, from which policy can be drawn, and what the Minister said to Parliament.
49. The appellant contends that the stated intention of Parliament, when deduced from the recommendations in the Dearing Report and Dr Howells' statement to Parliament of 9th June 1998 was to bring in Section 40 first, and then to university colleges sufficient time "... to ensure a period for Qualitative Name Approval". Only when those institutions had had sufficient time to qualify (which, if by the route of approving taught degree awarding powers, seems to be at best a period of a year to 18 months) was it Parliament's intention to bring in the prohibitions in section 39.
50. Plainly that construction cannot be derived from the words of the statute alone. Not only is there nothing linking sections 39 and 40, but section 46(4) gives the Secretary of State an unlimited discretion as to whether and when any section of the Act is implemented, ie he was not required to follow the alleged sequence.
51. In support of its contention, the appellant relies on the whole history of the matter as summarised above.
52. First, on 3 June 1998, the Department wrote to advise SCOP that it proposed tabling certain amendments to the Teaching and Higher Education Bill the following week. The letter stated that:

"The purpose of the amendments is twofold: to ensure that the title 'university college' can be authorised for those institutions which meet the appropriate criteria for that title; and that names including the word 'university' are not used by institutions in the higher and further education sectors without proper authorisation …

We intend that the provisions which facilitate the approval of 'university college' titles would be brought into operation quickly. The statutory duty not to use unauthorised titles would be brought into operation after a reasonable interval."

53. To set that letter in context, as set out in paragraph 30 of this judgment, the appellant's case is that it was only about the time of receipt of this letter that the appellant realised that with there being no current mention of the "... full members of a federal university ..." route to entitlement to call yourself a university college, the only route open to the appellant was by way of application for taught degree awarding powers, though it was not then possible to put in such an application, and indeed it did not become possible for some time.
54. It is common ground that "... the provisions that facilitate the approval of university college titles ..." refers to what became s.40 THEA (which was indeed brought into operation quickly, on 1 October 1998).
55. It is also common ground that "... the statutory prohibition on using unauthorised titles ..." refers to what became s.39 THEA.
56. What is in dispute is what was meant by "... a reasonable interval ...". Reasonable by what criteria is the question which will be answered after considering what Parliament was told. We refer back to paragraphs 33 and 34.
57. The appellant took the juxtaposition of the two sentences to mean that there would be a reasonable interval between implementing "... the provisions which facilitate the approval of 'university college' titles ..." (s.40) and implementing "... the statutory prohibition on using unauthorised titles ..." (s.39).
58. The appellant further considered that a "reasonable interval" would take into account the needs of institutions like the appellant which not only needed to obtain Privy Council approval, but first needed to apply for taught degree awarding powers.
59. Mr Fordham for the appellant suggests that there were two possible views as to what would constitute a "reasonable interval". Firstly to allow a "... period for name-change ...": enough time for institutions to "... prepare to desist ..." from using unauthorised names. Secondly to mean a "... period for qualitative approval ...": enough time for those using unapproved university college titles to satisfy qualitative criteria in relation to taught degree awarding powers and obtain Privy Council approval for use of the title.
60. In the latter case the time required would depend to some extent on the time it would take for the QAA to re-open applications for taught degree awarding powers and then to process any applications received. Clearly this would take time. The Respondent estimates that it could have delayed implementation of s.39 by more than three years.
61. Mr Fordham submits that the June statements make it clear that the "stated purpose" of the legislation was to have a two stage approach with s.40 (facilitating approval) first, and s.39 (the ban) second, and a reasonable interval between the two. This, he submits, must have been to ensure a period for qualitative approval. Therefore when the Minister pressed ahead with implementing the s.39 ban on the basis of a period for name change only, he frustrated the intention of Parliament.
62. Mr Justice Newman did not accept this interpretation and neither do we.
63. For convenience, we repeat what Dr Howells said to Parliament on 9 June:

"We intend that the provisions that facilitate the approval of university college titles will be brought into operation quickly. The statutory prohibition on using unauthorised titles will be brought into operation after a reasonable interval to allow institutions to take it into account."

64. What does the word "it" in the second sentence refer to? In our view the word "it", being singular, must refer to "... the statutory prohibition ...". The minister was proposing a reasonable interval to enable institutions with "university" in their name to take that prohibition into account: to comply with it. That this is factually right is made clear by a memo from Mr David Burbridge to Baroness Blackstone of 15th September 1998, that the "reasonable time" in question was to give the offenders time to print new prospectuses and the like. Neither the words used in Parliament nor the sense suggests a promise to give an establishment using the word "university" when it should not as much time as it might take to obtain a name change. As the judge said:.

"As a matter of statutory interpretation I am unable to conclude that Parliament intended to legislate for one section to give way to the other, namely that no effect should be given to the prohibition until time had been given to permit approvals to be obtained. I accept the submission of Mr Hoskins for the Respondent that in this regard the Applicant's case amounts to a submission that Parliament intended that until all persons affected by the prohibition had been given an opportunity to obtain approval, the prohibition would not apply or would not be enforced. In my judgment, had this been the intention of Parliament it could have been achieved not by the conferment of an open discretion in Section 46(4), but by stipulating for a timetable for commencement of the sections to reflect its intention.

In my judgment a further obstacle to the interpretation is that there is no challenge to the existence of the mischief, namely public confusion, to which the legislation is directed, nor to the need for legislation to eliminate the confusion. Given that the qualifying status for approval is within the Act and certain aspects of status have been excluded as a basis for approval (S.39(4)), the proposition that Parliament intended a general stay, while confusion reigned, to give candidates an opportunity to prove worthiness is illogical and untenable."

65. The earlier statement of 3 June 1998 was not made to Parliament, but nevertheless let us look at it again. The letter from the Department said this:

"We intend that the provisions which facilitate the approval of 'university college' titles would be brought into operation quickly. The statutory duty not to use unauthorised titles would be brought into operation after a reasonable interval."

66. This statement does not include the words "to allow institutions to take it into account." It is admittedly more ambiguous. However earlier in the same letter it was stated that

"The purpose of the amendments is twofold: to ensure that the title 'university college' can be authorised for those institutions which meet the appropriate criteria for that title; and that names including the word 'university' are not used by institutions in the higher and further education sectors without proper authorisation."

67. The first purpose stated here refers to authorisation for "... those institutions which meet the appropriate criteria ..." – those institutions, for example, that have already obtained taught degree awarding powers, and those who do so later, when they do so. In our view it is stretching a point to suggest that between the two purposes expressly stated here there must be a third purpose, namely to allow adequate time for those institutions which do not (yet) meet the appropriate criteria to take action to rectify the situation.
68. I accept that the letter of 3 June 1998 was ambiguous, but a careful reading of the statement made in Parliament only a week later shows that what was intended was a "period for compliance", rather than a "period for qualitative approval" as the appellant suggests. The statement of Dr Howells is not more specific than that, and we would not categorise it as suggesting either a "period for name change" or a "period for qualitative approval". We would take it to mean that institutions should comply one way or the other, even if this meant that institutions such as the appellant would have no choice but to comply by changing their names in the first instance. The alternative to changing names would have been (as has been shown above) to suspend the operation of section 39 until all aspirant university colleges had had a ruling on their claims to taught degree awarding powers. That would have meant the postponement of the urgently needed powers of section 39 for a period quite inconsistent with taking action against the mischief aimed at "... as soon as possible ..." (as Recommendation 62 stated).
69. The government accepted this recommendation and implemented it by enacting s.39 THEA. In view of the recommendation that it take action as soon as possible, it is hardly surprising that the government was then anxious to proceed with implementation as soon as reasonably possible. The mischief aimed at merited urgent action in the Government's judgment, and that was a conclusion they were amply entitled to reach.
70. As Mr Hoskins points out for the respondent, the Dearing Report did not make any recommendation that action to end the scope for confusion between the formal title and the informal name used by institutions should be implemented only after a reasonable interval had been allowed to enable institutions to seek taught degree awarding powers and thereafter formal approval to use formal titles which matched the informal names they were already using. On the contrary, it recommended that action be taken as soon as possible to end the confusion.
71. I accept the Respondent's argument that since s.39 was adopted in order to give effect to the Dearing Report's recommendation, there must be a heavy presumption that the intention of Parliament was to give full effect to that recommendation, namely that action should be taken as soon as possible to prevent institutions using unauthorised names. We found no evidence to displace that presumption. As Mr Justice Newman observed below, if Parliament had intended there to be a two stage process, it could have expressly stipulated for a timetable.
72. We agree with Mr Justice Newman's conclusion below that the purpose of the legislative ban was to enforce the prohibition so as to avoid the continuing mischief of confusion; the date for commencement furthered that aim; and the interval ameliorated the practical consequences of the prohibition.
73. It follows that we cannot accept the appellant's argument that the eventual timing of the implementation can be impugned for frustrating the intention of Parliament.

Substantive unfairness

74. The appellant has not advanced an argument based on legitimate expectation and in our view it is right not to do so. Legitimate expectation requires a "... clear, unambiguous and unqualified representation ...": R -v- Inland Revenue Commissioners ex parte MFK Underwriting Agents Ltd [1990] 1 WLR 1545, per Bingham LJ at 1569-1570. In our view the statement extracted from the letter of 3 June 1998 was at best ambiguous in that it was capable of the interpretation contended for by the appellant. It was not an unambiguous statement as contended for by the appellant; and the statement of Dr Howells on 9 June 1998 was certainly not an unambiguous statement as contended for by the appellant.
75. However the appellant also advances an argument based on substantive unfairness. It is common ground that an absence of legitimate expectation is not fatal to a claim for substantive unfairness: R -v- Inland Revenue Commissioners ex parte Unilever [1996] STC 681. However it is also clear from that case that a finding of substantive unfairness requires "conspicuous unfairness", "exceptional circumstances" and that such cases will be "rare indeed": judgment of Simon Brown LJ at 695 a-i.
76. The appellant contends that it was unfair in all the circumstances to the appellant, which was a quality institution, to be denied any opportunity to demonstrate its worthiness before the s.39 prohibition was imposed. We do not accept this. We accept that the decision to implement s.39 sooner than the appellant had hoped was a grave disappointment, but we agree with Mr Justice Newman's conclusion that the appellant's present position is founded on its own conduct; the writing was on the wall many years ago; the case for change was overwhelming; and the process of inquiry and consultation was painstaking. S.39 and s.40 do no more than reflect the policy, urged by the Dearing Committee upon the government, to legislate in this area "as soon as possible".

Proportionality

77. There is common ground as to the legal framework. The case law of the European Court of Justice establishes that restrictions may be imposed on the free movement of workers and the freedom to provide services provided that those restrictions are:

i) justified by overriding interests relating to the public interest; and

ii) proportionate, i.e.

a) they are capable of achieving the intended aim, and

b) it is not possible to obtain the same result by less restrictive rules.

78. The appellant does not dispute that the legislative purpose in implementing a ban constitutes a legitimate aim. But Mr Fordham contends that s.39 and s.40 had a dual legislative purpose: "prohibiting use by the unworthy, allowing it by the worthy". It follows, he says, that implementing a ban without first discriminating between the worthy and the unworthy is neither suitable to achieve the purpose, nor the least intrusive means of doing so. The more so, he says, where there is no evidence of the Secretary of State considering less intrusive alternatives, such as transitional provisions.
79. For reasons already set out above, we do not accept Mr Fordham's interpretation of the legislative purpose. Implementing the s.39 ban was in fact a priority given the recommendation of the Dearing Report that the government take urgent action to end the confusion caused by institutions using names they were not formally entitled to.
80. Equally, we do not accept that there is no evidence of the Secretary of State considering less intrusive alternatives, such as transitional provisions. In fact, as the Department memorandum of the meeting of 22nd October 1998 (to consider the consultation process) shows, the suggestion of a transitional period was raised by AOC, was considered, and rejected. Indeed, we fail to see what transitional provisions could have been adopted short of allowing the mischief to continue, because while we have no doubt the appellant may be "worthy", the Department would have no ready but fair means of distinguishing between "worthy" and "unworthy". SCOP themselves put forward no alternative other than delaying the date for implementation of s.39. Internal Department memoranda dated 15 September 1998 and 22 October 1998 show that the respondent was well aware of the concerns of institutions like the appellant, and balanced the need to put an end to the use of informal names as soon as possible with the need to minimise the disruption to those institutions affected.
81. Mr Fordham also argues on appeal that in order to satisfy the proportionality principle, the respondent was obliged to consider expressly whether the interference with the appellant's rights was justified under EC law. He bases this on R -v- Human Fertilisation and Embryology Authority, ex parte Blood [1999] Fam 151 in which Lord Woolf MR said (at 184G) in relation to a decision requiring justification, that:

"In coming to its decision the authority was required to take into account that to refuse permission to export would impede the treatment of Mrs Blood in Belgium and to ask whether in the circumstances this was justified."

82. He further argues that Newman J was wrong to hold that it was "mechanistic" to suggest that since there had been no consideration of the appellant's Treaty rights, the decision must be quashed; and wrong to assume that the Respondent would have reached the same decision had EC rights and justification been expressly addressed. Mr Hoskins argues in reply that although the Respondent did not expressly consider the Community law principle of proportionality, it is clear that the decision-making process did involve careful consideration of the various options available and that a decision was taken to adopt the least restrictive measure which was capable of fulfilling the objective pursued. Therefore, he argues, the decision-making process complied with the substantive requirements of the principle of proportionality.
83. We accept and uphold the reasoning of Newman J that

"... where, as here, there is no reference to relevant Treaty rights in the decision-making process, one must look at the decision and determine whether the requirements of community law have nevertheless been met."

We also accept Newman J's conclusion that even if one were to take a restrictive view of the appropriate margin of appreciation, the conclusion would be the same: that the action taken to commence the prohibition from 1 February 1999 did not constitute a violation of the appellant's Treaty rights and the principle of proportionality.

84. We are much indebted to the trial judge for his careful and well-constructed judgment. We endorse his findings of fact, and are not conscious of any point where we differ from him.
85. Accordingly, this appeal must be dismissed.
ORDER: Appeal dismissed with costs; application for permission to appeal to the House of Lords refused. (Order does not form part of approved Judgment)