QUEEN'S BENCH DIVISION
B e f o r e :
(Lord Justice May)
MR JUSTICE MADDISON
|The Queen on the application of|
|(1) MATTHEW FRANCIS UBEROI|
|(2) NEEL AKASH UBEROI|
|- v -|
|CITY OF WESTMINSTER MAGISTRATES' COURT|
|(1) THE FINANCIAL SERVICES AUTHORITY|
|(2) HM TREASURY|
Wordwave International Ltd (a Merrill Communications Company)
190 Fleet Street, London EC4
Telephone No: 020 7421 4040
(Official Shorthand Writers to the Court)
London WC2R 3JJ) appeared on behalf of the Claimants
Mr John Kelsey-Fry QC and Miss Sarah Clarke
(instructed by the Financial Services Agency)
appeared on behalf of the First Interested Party
Mr Sam Grodzinski (instructed by the Treasury Solicitor)
appeared on behalf of the Second Interested Party
Crown Copyright ©
Tuesday 2 December 2008
THE PRESIDENT OF THE QUEEN'S BENCH DIVISION:
"When instituting proceedings for an 'insider dealing' offence contrary to Part V of the Criminal Justice Act 1993, pursuant to its powers under section 402 of the Financial Services and Markets Act 2000, does the requirement for a consent to be obtained under section 61(2) of the Criminal Justice Act 1993 apply to the FSA?"
It was agreed that, if consent is required, any prosecution without the necessary consent would be a nullity and any conviction would have to be quashed on appeal: see R v Pearce 72 Cr App R 295. It was also agreed that the wording of section 61(2) of the 1993 Act prohibits the institution of proceedings for insider dealing offences without consent. Proceedings are "instituted" upon the laying of an information and the issue of a summons: see Price v Humphries  2 QB 353 and R v Bull 99 Cr App R 193. The present summonses would thus be a nullity if section 61(2) applies.
"Proceedings for offences under this Part shall not be instituted in England and Wales except by or with the consent of --
(a) the Secretary of State; or
(b) the Director of Public Prosecutions."
Section 402 of the 2000 Act, which is headed "Power of the Authority to institute proceedings for certain other offences" provides:
"(1) Except in Scotland, the Authority may institute proceedings for an offence under --
(a) Part V of the Criminal Justice Act 1993 (insider dealing); or
(b) prescribed regulations relating to money laundering.
(2) In exercising its powers to institute proceedings for any such offence, the Authority must comply with any conditions or restrictions imposed in writing by the Treasury.
(3) Conditions or restrictions may be imposed under subsection (2) in relation to --
(a) proceedings generally; or
(b) such proceedings, or categories of proceedings, as the Treasury may direct."
Section 402 has to be read with section 401 which provides for proceedings for offences under the 2000 Act itself or subordinate legislation made under it. Section 401(2) provides:
"Proceedings for an offence may be instituted in England and Wales only --
(a) by the Authority or the Secretary of State; or
(b) by or with the consent of the Director of Public Prosecutions."
The Authority in this statute is the FSA. Thus the FSA is empowered to bring proceedings for offences under the 2000 Act itself without obtaining the consent of the Secretary of State or the DPP.
"Statutory interpretation is an exercise which requires the court to identify the meaning borne by the words in question in the particular context. The task of the court is often said to be to ascertain the intention of Parliament expressed in the language under consideration. This is correct and may be helpful, so long as it is remembered that the 'Intention of Parliament' is an objective concept, not subjective. The phrase is a shorthand reference to the intention which the court reasonably imputes to Parliament in respect of the language used. It is not the subjective intention of the minister or other persons who promoted the legislation. Nor is it the subjective intention of the draftsman, or of individual members or even of a majority of individual members of either House. These individuals will often have widely varying intentions. Their understanding of the legislation and the words used may be impressively complete or woefully inadequate. Thus, when courts say that such-and-such a meaning 'cannot be what Parliament intended', they are saying only that the words under consideration cannot reasonably be taken as used by Parliament with that meaning. As Lord Reid said in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG  AC 591, 613:
'We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used'."
(1) The requirement for consent is a protective safeguard embedded in insider dealing legislation going back to 1980, which should not be removed without express language.
(2) Section 402 of the 2000 Act does not attempt to modify section 61(2) of the 1993 Act. The meaning of section 402 is clear.
(3) When Parliament intends to make such a modification, it does so expressly: see paragraph 4 of Schedule 1 to the 1987 Act.
(4) The juxtaposition of section 401 and 402 of the 2000 Act is striking. Section 401 expressly addresses the question of consent for instituting proceedings for offences under the 2000 Act. The very next section says nothing about consent and yet is said to modify an existing statutory provision by implication only. Section 401 provides for the new regime; section 402 inserts an existing regime which has to be read in the light of its history.
(5) The words of section 402 "proceedings for an offence under Part V of the Criminal Justice Act 1993" may be read as positively affirming the provisions of Part V of the 1993 Act, which include section 61(2).
(6) Dispensing with the need for consent would require very few words, but they are not there.
(7) Parliament plainly regarded it as necessary to give certain people express power to institute proceedings since all other official prosecutors were given such power, that is to say the Secretary of State, the DPP and perhaps the Director of the Serious Fraud Office.
(8) Requiring consent for the SFA to institute insider dealing prosecutions is not inconsistent with a general intention to put the FSA in the forefront of the general regulation of financial markets. There is no absurdity in the need to require consent. The FSA are subject to possible instruction from the Treasury under section 402(2). They are not a specified prosecutor under section 71(4) of the Serious Organised Crime and Police Act 2005.
(9) The decision of another Division of this Court in Securiplan is not parallel because the issue there was whether the SFA had power to prosecute at all under the general powers of section 1(3) of the Private Securities Industry Act 2001. The question of consent did not arise.
"Proceedings for an offence under this Part shall not be instituted in England and Wales except --
(1) by the Secretary of State, or
(2) by the Director of Public Prosecutions, or
(3) by the Director of the Serious Fraud Office, or
(4) by the FSA, or
(5) with the consent of the Secretary of State or that of the Director of Public Prosecutions."
"(1) This subsection applies to a person who --(a) makes a statement, promise or forecast which he knows to be misleading, false or deceptive in a material particular;
(b) dishonestly conceals any material facts whether in connection with a statement, promise or forecast made by him or otherwise; or
(c) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive in a material particular.
(2) A person to whom subsection (1) applies is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made) --(a) to enter or offer to enter into, or to refrain from entering or offering to enter into, a relevant agreement; or
(b) to exercise, or refrain from exercising, any rights conferred by a relevant investment.
(3) Any person who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments is guilty of an offence if he does so for the purpose of creating that impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite those investments or to refrain from doing so or to exercise, or refrain from exercising, any rights conferred by those investments."
Section 398(1) under the heading "Misleading the Authority: residual cases" provides:
"A person who, in purported compliance with any requirement imposed by or under this Act, knowingly or recklessly gives the Authority information which is false or misleading in a material particular is guilty of an offence."