England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		20th December 2006

Lord Justice Waller :

Introduction

1. This application raises the question whether a statutory instrument, the Motor Vehicles (Compulsory Insurance) Regulations 2000 (SI 2000.726, "the Regulations") lawfully amended inter alia s.170 of the Road Traffic Act 1988. Powers are granted by s.2(2) of the European Communities Act 1972 ("the ECA") to amend primary legislation by secondary legislation, subject only to the negative resolution procedure in certain defined circumstances. Mr Ley, on behalf of the claimant, submits that the circumstances did not exist in this case and that thus the claimant's conviction for the offence of failing to stop following an accident, contrary to s.170 of the 1988 Act, should be quashed.

Factual Framework

2. Shortly before midnight on 11^th March 2005 in the car park of the Snooty Fox public house, Oakworth, West Yorkshire, Mr Wilkinson, who was loading his car witnessed a silver Rover 75 collide with two stationary vehicles, a van and an unattended Peugeot car – the Peugeot sustained damage. Mr Wilkinson approached the drive of the Rover, the claimant, and spoke with him. He formed the view that the claimant was unfit to drive the vehicle and told him that he was going to call the police.
3. The claimant made off in his vehicle and the police were called. The police went to the applicant's address, where the silver Rover 75 was parked, showing signs of accident damage. The claimant provided specimens of breath and was ultimately charged with driving with excess alcohol. He was ultimately convicted of that offence but the circumstances of that offence form no part of the background to the argument before this court.
4. It is the charge of failing to stop, report an accident and give information as required by s.170 which is material. S.170 of the 1988 Act originally provided as follows:-

"(1) This section applies in a case where, owing to the presence of a mechanically propelled vehicle on a road [my underlining], an accident occurs by which –

(a) personal injury is caused to a person other than the driver of that mechanically propelled vehicle , or

(b)damage is caused –

(i) to a vehicle other than that mechanically propelled vehicle . . .

(2) The driver of a mechanically propelled vehicle must stop and, if required to do so by any person having reasonable grounds for so requiring, give his name and address and also the name and address of the owner and the identification marks of the vehicle.

(3) If for any reason the driver of the mechanically propelled vehicle does not give his name and address under subsection (2) above, he must report the accident.

(4) A person who fails to comply with subsection (2) or (3) above is guilty of an offence.

(5) If, in a case where this section applies by virtue of subsection (1)(a) above, the driver of a motor vehicle does not at the time of the accident produce such a certificate of insurance or security, or other evidence, as is mentioned in section 165(2) of this Act –

(a) to a constable, or

(b) to some person who, having reasonable grounds for so doing, has required him to produce it

The driver must report the accident and produce such a certificate or other evidence. . . .

(6) To comply with a duty under this section to report an accident or to produce such a certificate of insurance or security, or other evidence, as is mentioned in section 165(2)(a) of this Act, the driver –

(a) must do so at a police station or to a constable, and

(b) must do so as soon as is reasonably practicable and, in any case, within twenty-four hours of the occurrence of the accident.

(7) A person who fails to comply with a duty under subsection (5) above is guilty of an offence, but he shall not be convicted by reason only of a failure to produce a certificate or other evidence if, within seven days after the occurrence of the accident, the certificate or other evidence is produced at a police station that was specified by him at the time when the accident was reported."

5. By the Regulations which came into force on 3^rd April 2000, particularly Regulation 2(6), there was inserted into s.170(1) after "on a road" the words "or other public place". It is only if those words were lawfully inserted that the claimant would be guilty, since his car was not on a road but in a car park, i.e. another public place.
6. The preamble to the regulations stated as follows:-

"The Secretary of State for the Environment, Transport and the Regions, being a Minister designated for the purposes of s.2(2) of the European Communities Act 1972 in relation to compulsory insurance in respect of, and other means of providing for, civil liability in relation to motor vehicles and trailers, in exercise of the powers conferred by that section hereby makes the following Regulations:- ."

7. S.2(2) of the ECA provides as follows:-

"Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, and any designated Minister or department may by regulations, make provision –

(a) for the purpose of implementing any Community obligation of the United Kingdom, or enabling any such obligation to be implemented, or of enabling any rights enjoyed or to be enjoyed by the United Kingdom under or by virtue of the Treaties to be exercised; or

(b) for the purpose of dealing with matters arising out of or related to any such obligation or rights or the coming into force, or the operation from time to time, of subsection (1) above;

And in the exercise of any statutory power or duty, including any power to give directions or to legislate by means of orders, rules, regulations or other subordinate instrument, the person entrusted with the power or duty may have regard to the objects of the Communities and to any such obligation or rights as aforesaid.

In this subsection "designated Minister or department" means such Minister of the Crown or government department as may from time to time be designated by Order in Council in relation to any matter or for any purpose, but subject to such restrictions or conditions (if any) as may be specified by the Order in Council."

8. It is also relevant to emphasise that by subsection (4) of section 2 it is provided that:-

"The provision that may be made under subsection (2) above includes, subject to Schedule 2 to this Act, any such provision (of any such extent) as might be made by Act of Parliament, and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section; . . ."

9. Schedule 2 provides, so far as material, as follows:-

"1.- (1) The powers conferred by section 2(2) of this Act to make provision for the purposes mentioned in section 2(2)(a) and (b) shall not include power –

(a) to make any provision imposing or increasing taxation; or

(b) to make any provision taking effect from a date earlier than that of the making of the instrument containing the provision; or

(c) to confer any power to legislate by means of orders, rules of procedure for any court or tribunal; or

(d) to create any new criminal offence punishable with imprisonment for more than two years or punishable on summary conviction with imprisonment for more than three months or with a fine or more than £400 (if not calculated on a daily basis) or with a fine of more than £5 a day. . . . .

2.- (1) Subject to paragraph 3 below, where a provision contained in any section of this Act confers power to make regulations (otherwise than by modification or extension of an existing power), the power shall be exercisable by statutory instrument.

(2) Any statutory instrument containing an Order in Council or regulations made in the exercise of a power so conferred, if made without a draft having been approved by resolution of each House of Parliament, shall be subject to annulment in pursuance of a resolution of either House."

10. Mr Ley, for the claimant, argued that the regulations were not passed for the purpose of implementing any Community obligation of the United Kingdom or for the purpose of enabling any such obligation to be implemented and thus there was no power to pass the same under s.2(2)(a). He argued that the Regulations were not passed for the purpose of dealing with matters arising out of or related to any such obligation and thus that there was no power to pass the same under s.2(2)(b). At the very last moment in his reply Mr Ley sought to raise a point that the effect of the Regulations was to create "a new criminal offence". He informed us that Schedule 2(1)(d) had been amended to expand the level of fine to level 5 but not to extend the period of imprisonment. He showed us that the maximum term of imprisonment imposable on summary conviction for an offence under s.170 was a period of six months. So, he submitted, the creation, as he put it, of a new criminal offence was not authorised by s.2.

The context in which the Regulations must be placed

11. It is material in considering whether s.2(2) provided the power to pass the Regulations, to understand how the Regulations came to be made. There was produced before us a reasoned opinion of the EU Commission, dated 18^th February 2000. That opinion was addressed to the United Kingdom, pursuant to Article 226 of the EC Treaty. Article 226 of the Treaty provides as follows:-

"If the Commission considers that a Member State has failed to fulfil an obligation under this Treaty, it shall deliver a reasoned opinion on the matter, after giving the State concerned the opportunity to submit its observations.

If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice."

12. The opinion indicates that when the 1988 Act was first passed the Commission took the view that the United Kingdom was failing to fulfil its obligations under Article 3(1) of the First Motor Directive, Council Directive 72/166/EEC of 24^th April 1972. Article 3(1) of that Directive stated:-

"Each Member State shall, subject to Article 4, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territories is covered by insurance. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures."

13. In its opinion, the Commission expressed the view that the sections of the 1988 Act which applied to a motor vehicle "on the road" did not implement the United Kingdom's obligations under the Directive. The Commission took the view that the 1988 Act was suggesting that insurance was not required for use of motor vehicles on private property. The opinion sets out communications passing between the Commission and the United Kingdom over a considerable period of time, in which the United Kingdom debated the extent to which the United Kingdom had a discretion as to what law to implement. In particular the debate related to the question as to whether there was an obligation to introduce legislation requiring insurance where a motor vehicle was on private property, or whether there should be a distinction between road, property of a public nature, and property which was used privately. It seems that the United Kingdom authorities persuaded the Commission that, provided the meaning of the word "road" extended beyond "public highways" to "ways over which the public at large have access, whether by right or as a result of permission given expressly or implied by the owner of the way concerned" the Commission would be content. This was the position by mid-1997 and was a position that the United Kingdom government supported, having regard to the way in which "road" was being construed by various courts in the UK.
14. On 22^nd October 1998, however, the House of Lords handed down their decision in Clarke v General Accident Fire and Life Insurance Corporation [1998] 1 WLR 1647. The issue before the House of Lords was whether the Motor Insurers' Bureau was liable to satisfy a judgment against a defendant who was uninsured. The issue on which the decision depended was whether "the use of a vehicle on a road" included use in a public car park. In the speech of Lord Clyde, with which all of their Lordships agreed, the decision was that "road" did not include a public car park.
15. The Secretary of State had intervened in the House of Lords and Mr Sales put forward on his behalf arguments as to why a broad construction should be placed on the word "road". One argument put forward by Mr Sales related to the three European Directives on the approximation of laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles. These were the First Council Directive (to which I have referred), the Second Council Directive (84/5/EEC of 30^th December 1983) and the Third Council Directive (90/232/EEC of 14^th May 1990). Each of those Directives was successively implemented into British domestic law in so far as the existing law did not already meet their requirements. The argument of Mr Sales was that the obligation under the Directives went further than requiring insurance when vehicles were driven on a "road" as that might be strictly understood. He submitted the obligation, as exemplified by Article 3(1) of the First Directive, which I have already quoted, was to require civil liability in respect of the use of motor vehicles to be covered by insurance in all public places and so that was how "roads" should be construed.
16. Lord Clyde was of the view that the Directives did not compel the United Kingdom to introduce compulsory insurance beyond "roads" strictly so-called and that it was a question of policy as to whether the United Kingdom wished to make that obligation more extensive. In the result, the decision of the House of Lords was that "roads" meant "roads" strictly so-called and did not include car parks.
17. From the opinion of the Commission it appears that the Department of Transport sent a letter to the Commission dated 14^th May 1999 advising that, though at least up to now, British courts had interpreted "on a road" quite widely, the new judgment restricted the meaning of "road" to a "public highway or other places which would be considered by an ordinary man to be a road", thus excluding car parks and other off-road places where a motorist should be required to be insured. The opinion records that the UK authorities declared themselves willing to modify the British legislation on that issue and then recorded that:-

"From what has been stated above, it follows that it is clear that the United Kingdom is obliged to transpose Article 3(1) of the First Motor Directive into national law. Furthermore, the United Kingdom has not contested this obligation.

Also, the Court of Justice has consistently held that the Member State cannot rely on provisions, practices or situations arising in its own legal order to justify its failure to respect the obligations and time limits laid down by a Directive . . .

For the above reason the Commission "having by letter of 14^th 1996 given the United Kingdom government the opportunity to submit its observations and having examined the reply from the United Kingdom government, hereby declares as its reasoned opinion . . . that the United Kingdom has failed to fulfil its obligations under this Directive . . . The Commission requests the United Kingdom to take the measures necessary to comply with this reasoned opinion within two months following notification thereof."

18. It was in those circumstances that a decision was taken to expand the 1988 Act by the use of Regulations. The Regulations were examined by the Joint Committee on Statutory Instruments and the Committee asked for a memorandum on the following points:-

"(1) Explain the basis on which the department reaches the conclusion (expressed in explanatory note) that the United Kingdom is under a Community obligation to extend the compulsory insurance regime to other public places when the House of Lords, in its judicial capacity, has clearly held that it is not.

(2) If, on the other hand, the department justifies the making of these Regulations as a matter arising out of or related to (but not required by) the obligation to establish a compulsory insurance regime, the use of a vehicle on the road, explain the basis for its conclusion that the extent of the regime is such a matter."

19. The memorandum in answer to those questions stated as follows:-

"2. Article 3(1) of Council Directive 72/166/EEC requires each Member State to take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in their territory is covered by insurance. Member States are expressly allowed a discretion as to the extent of the liability covered and the terms and conditions of cover. Although Article 3(1) has been clarified to some extent by subsequent directives, the extent of a Member State's discretion (if any) as to the area within its territory to which it may apply the compulsory insurance regime has never been established.

3. Given the House of Lords' interpretation of the directives the Department acknowledges that it cannot be currently argued in the English courts that there is a Community obligation to expand the obligation in Part VI of the Road Traffic Act 1988 beyond "roads" in the narrow sense of that expression. However, the European Commission in February this year issued a Reasoned Opinion to the effect that, by excluding car parks and other off-road places from the area where a motorist is required to be insured, the United Kingdom had failed to fulfil its obligations under Article 3(1). It expressed the view that a Member State's discretion did not extent to places where a vehicle must be insured, merely to the financial limits of the cover and the formalities to which a claimant may be made subject. This Opinion followed extensive correspondence with the Commission on the matter during the period 1994 to 1996 at a time when the department believed that the expression "road" covered car parks and other off-road places to which the public had access.

4. If the grounds on which the Reasoned Opinion was issued are wrong, it is nevertheless clear that the object of the directives is to ensure that EC nationals are covered by motor insurance when travelling in other Member States and that Member States have a discretion as to the extent of the liability covered. Therefore, irrespective of which interpretation (the Commission's or the House of Lords') is right, the Department takes the view that it is open to the Secretary of State to rely on the vires of section 2(2)(b) of the European Communities Act 1972 to extend the compulsory insurance requirement as being a matter arising out of or related to the subject matter of the directives."

Submissions

20. Mr Ley argued for the claimant argued that s.2(2)(a) did not provide any power to enact the Regulations because there was no obligation under any of the Directives to extend the offence which previously was confined to "road" to car parks or other public places. He made that submission firstly on the basis that this court, and indeed the United Kingdom government, was bound by what Lord Clyde had said in the House of Lords, and secondly by taking us to the language of the Directives and seeking to uphold the reasoning of Lord Clyde. He submitted that the Regulations were not of the same character as those considered in Oakley Inc v Animal Ltd [2006] Ch 337. In Oakley a choice was left to Member States by a Directive and the United Kingdom made a choice (in that case to retain the old law for a period). He submitted that in approving the concept of the United Kingdom having a "choice" the Court of Appeal had not intended to give a wide discretion as to the breadth of what was introduced as law. Indeed, he suggested that the correct approach was that expressed in the words of Lord Justice Jacob in paragraph 65, where Jacob LJ said:-

"One test as to whether or not a Directive is properly implemented by a statutory instrument is to compare the Directive with the purportedly implementing statutory instrument. If there is nothing in the latter which is not explicitly contemplated in the Directive (whether as an option or not) then it is a case falling within s.2(2)(a). In such a case the statutory instrument is made solely for the purpose and solely for enabling implementation. This is such a case."

Applying that test, he submitted there could be no question of the regulations implementing an obligation under the Directives.

21. So far as s.2(2)(b) was concerned, he submitted that in my judgment in Oakley I could be criticised for placing a gloss on the words. He submitted further that May LJ was also guilty of placing a gloss on the words. In particular he submitted that words such as "closely" and "naturally" were not the words of s.2(2)(b). He again supported the view of Jacob LJ, who simply stated that the language had to be followed in any particular case.
22. He submitted that s.2(2)(b) simply allowed regulations to be used to "oil the wheels" in relation to the introduction of a law which the United Kingdom was obliged to implement.
23. Mr Pannick QC commenced his submissions with s.2(2)(b). He submitted that the Court of Appeal in Oakley had given guidance as to the proper approach to s.2(2)(b) and he submitted that, if there was any distinction between the three judgments, it was difficult to discern. Each member of the court was using his own language to describe the limitation which must be placed on the power of the executive to amend primary legislation by secondary legislation, however wide the language of s.2(2)(b) might at first sight appear. He accepted that the courts, and indeed the United Kingdom government, were bound by the view of Lord Clyde. He put his submissions simply in this way. What the Regulations were concerned to do was to extend the requirement of the legislation in a way closely related to and naturally flowing from the original obligation which, on Lord Clyde's view, did not go beyond roads. Since the United Kingdom had a duty to make provision in relation to motor vehicles on roads, the making of the provision in relation to public places generally, - which was aimed at the same mischief and aimed at achieving the same objectives, (i.e. to ensure that insurance cover was available and to ensure that persons did not leave the scene of the accident) - could not, he submitted, be more closely related to the obligation in relation to roads.
24. Perhaps more compellingly still he submitted that, even loyally accepting Lord Clyde's view, the position that the United Kingdom government was faced with was an assertion by the Commission that Lord Clyde was not correct. It could not be said that, if the matter went to the European Court at Luxembourg, there could be no doubt as to the way in which that court would construe the Directives. Faced with the opinion of the Commission, which involved going only the short distance of expanding the word "roads" to include other public places, was on any view sensible and could not provide a better example of dealing with matters "arising out of or related to" an obligation placed on the United Kingdom to ensure that civil liability in respect of the use of motor vehicles in its territories was covered by insurance.
25. He also dealt with a further point made by Mr Ley in reliance on paragraph 23 of my judgment in Oakley. That paragraph suggested that s.2(2)(b) would not allow the Secretary of State to amend by secondary legislation primary legislation, when he or she was not at the same time bringing into force a Directive. Mr Pannick suggested that I had not intended to place some temporal limitation on the use of s.2(2)(b) as the paragraph might at first sight be read.
26. I confess that I may have had in mind a temporal limitation but the view I expressed in paragraph 23 was certainly no part of the ratio decidendi in Oakley and I did not have in mind circumstances such as the present case exemplifies. In this case there is the strongest link between the implementation of the law pursuant to the United Kingdom's obligation under the Directive and what is sought to be done by secondary legislation. That link is provided by the opinion of the Commission seeking to compel the United Kingdom to implement legislation to extend the meaning of the word "road" to include that which, up until that date, the United Kingdom was holding, by its courts' decisions, was included.
27. Mr Pannick then turned to s.2(2)(a). He went to passages in the judgments in Oakley; in my judgment he referred to paragraph 28, where I said:-

"I am clear that the Attorney General's argument on this aspect, supported by Miss Clark for Animal, is to be preferred. Section 2(2)(a) is concerned primarily with the bringing into force of Community obligations arising from the Treaty. Those obligations are primarily the Directives themselves and do not suggest a line by line approach to the Directive. It makes little sense to divide things which the Member State must do from those where it may not have to do, if it chooses to do something else. To hold that transitional provisions where the United Kingdom has a choice to take advantage of retaining the old law for a period needs primary legislation, whereas the rest of the Directive did not, would be illogical as this case demonstrates. Transitional provisions keep in play the legislation which has been scrutinised – why, one asks rhetorically, should Parliament have thought that further primary legislation should be introduced to keep primary legislation in place at the same time as allowing the same primary legislation to be repealed by regulations?"

28. In the judgment of May LJ he went to paragraph 47, where he said:-

"I do not consider that to hold that the making of these transitional provisions came within section 2(2)(a) has the effect of making section 2(2)(b) devoid of content. There is a distinction between providing something which, although it is a choice, is a choice which the implementation of the Directive requires you to make, and one which is not so required, but which has the effect of tidying things up or making closely related original choices which the Directive does not necessarily require. Section 2(2)(b) is confined by its words and context. Redefinition in the abstract is to be avoided. I would refrain, therefore, from deciding whether the passage in the judgment of Otton LJ in R v Secretary of State for Trade and Industry ex part Unison [1996] ICR 1003 at 1014 F-H, quoted by Waller LJ in paragraph 34 of this judgment, correctly interprets and applies section 2(2)(b). But I respectfully agree with Waller LJ that the opinion of Lord Johnson in Addison v Denholm Ship Management (UK) [1997] ICR 770 at 785 C-F, quoted by Waller LJ in paragraph 35 of his judgment, is not correct."

29. He suggested that paragraph 65 of Jacob LJ's judgment was providing an example and had to be read with paragraph 66, where he said:-

"The Deputy Judge took the view that s.2(2)(a) is limited to implementation of an essential, non-optional, part of a Directive – only an irreducible core (if one can be found) is covered. Anything which requires a policy decision, including the choice of how to exercise an option specifically conferred by the Directive, requires a full Act of Parliament. This would apply however trivial the choice might be. The Deputy Judge's view would require a close examination of each part of a Directive to decide which bits are "core" and which only optional. I do not think s.2(2)(a) is limited in that way at all. Nor in many cases would the test even be workable – suppose for instance an "essential" portion which required for its working a choice of two alternatives set out in the Directive. Are neither or both "core"? If neither then the Directive could not be implemented by a regulation at all."

30. He submitted that there was some element of discretion granted to the United Kingdom in implementing laws required to be implemented by Directives. He referred to Article 249 of the Treaty, which I relied on in my judgment in Oakley. He suggested that there was an element of choice so far as the United Kingdom was concerned.
31. He further submitted that if one examined the speech of Lord Clyde he recognised the choice that a Member State had in the way that it implemented EU Directives.
32. My view is that in Oakley the court was dealing with clear choices left to the Member States by the Directive. The United Kingdom chose one option and did not expand on that option or amend it in any way. There is a distinction between that sort of choice and the choice to introduce legislation which on any view goes further than a Directive may require, but which, at the same time, fulfils the obligation to bring in a particular law.
33. I am not persuaded that Lord Clyde was doing more than recognising the wide discretion of the latter sort. S.2(2)(a) does not empower the executive by secondary legislation to pass laws in relation to which it is clear no obligation exists under EU law. The position may not however be straightforward when it is not precisely clear what the obligation is under EU law.
34. The position in the instant case is complicated because of the decision of the House of Lords. If there were no decision of the House of Lords, the position would seem to me to be that there were Directives which were not precisely clear in their definitions. In that situation, if the Commission is arguing for one construction, which is clearly a tenable construction, it would not seem to me to be an infringement of Article 2(2)(a) for the United Kingdom to rely upon it to bring in legislation which complies with the opinion of the Commission. Mr Pannick would, however, rightly not accept a proposition which involved a non-acceptance of Lord Clyde's view on the basis that that view might turn out to be wrong when the matter came before the European Court. But he submitted that the lack of clarity still allowed for the United Kingdom to go as far as implementing the Commission's opinion, under s2(2)(a).

Conclusion on these arguments

35. In my view, having regard to the House of Lords' decision and the opinion of Lord Clyde, the Secretary of State was not entitled to exercise the powers under s.2(2)(a) and indeed he did not purport to do so. This is, however, a clear case where s.2(2)(b) provides the necessary power. The United Kingdom government was faced with legislation that had been passed, seeking to implement EC Directives. The House of Lords construed it narrowly and in a way which the Commission would suggest had led the United Kingdom to be in breach of their obligation. What was required was only a minor amendment, aimed at the same mischief, bringing the legislation into line with what the Commission viewed as fulfilling that obligation. The decision to pass the Regulations clearly arose out of or related to the obligation which they had sought to implement. In my view therefore, so far as the main arguments of Mr Ley are concerned, the claimant should not succeed.

Fresh argument

36. At the beginning of his reply Mr Ley raised a new point to which I have referred in paragraph 10 – the new criminal offence point. Mr Pannick had no time to think about the point. He, in the circumstances, simply submitted (1) that the Regulations did not "create any new criminal offence". Thus, he submitted that Schedule 2.1(1)(d) was not in play. In the alternative he submitted that as the point had been raised so late Mr Ley should not be allowed to argue it, having regard to the inability of anyone to investigate the matter.
37. This is clearly a point which, if it was going to be taken, should have been taken much earlier than it was. My view is, however, that the Regulations did not create any "new" offence. The Regulations simply sought to expand the definition of "road" in an already existing offence, having regard to the way in which the House of Lords had construed the same.
38. Thus, I would not allow the claimant to succeed on this point either.

Mr Justice Lloyd Jones: I agree.