England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/12/2013

Peter Smith J:

INTRODUCTION

1. This is an application under Section 42 of the Arbitration Act 1996 ("the Act") in support of an arbitration proceeding in the London Court of International Arbitration ("the LCIA") relating to the partnership carried on between the 3 parties to this application.
2. The Arbitrator (Mr Michael Lee, Barrister of 20 Essex Street London) has ordered a dissolution of the partnership and is trying to supervise its winding up and the drawing up of dissolution accounts. The Defendants who have lost the arbitration so far and are subject to a freezing injunction have refused to comply with a series of orders from the Arbitrator. In particular the Claimant complains that they have refused to provide the partnership books and records to the partnership accountant or to give the requisite authority to the accountant to liaise with the single joint Expert appointed by the Arbitrator pursuant to his Award of 21 June 2013. This, the Claimants contend is preventing any further steps being taken in the arbitration.
3. The reason for the Defendants' stance was twofold. First they contended that the estimate of the hearing of 1 hour was insufficient (that was certainly the case but there was sufficient time on the day for all submissions to be fully deployed). Second (and more significantly) the Defendants whilst accepting that they had not complied with the peremptory order made by the Arbitrator contended that the court must not "rubber stamp" the Arbitrator's order by making the injunction in the same terms and that it must be satisfied that it is appropriate to exercise its discretion in this way relying on the only decision the parties discovered under section 42 in Emmott v Michael Wilson & Partners Ltd [2009] EWHC 1.
4. The Defendants raised a number of objections to the making of the peremptory order. They contend first that Mr Lee had no power to make the directions of 18^th October 2013 when he ordered the Defendants to send the records to the accountants. He followed that up following non compliance with a peremptory order on 12^th November 2013 directing the Defendants to deliver the partnership financial records to Richie Philips together with a written authority to Mr Stuart Richie to give to Saffery Champness (accountants appointed by Mr Lee as part of his Award) such information and documents as Saffery Champness might require.
5. It is that peremptory order which the Claimants seek to enforce in this application.
6. The Defendants say Mr Lee had no jurisdiction to make those orders because they related to accounts and that was not within his power under clause 33 of the Partnership Agreement (see below). They contend that specific provision is made in relation to accounts disputes under clause 9.4 to be determined by an Accountant appointed under those provisions (see below).
7. In addition the Defendants have already put in issue whether Mr Lee acted fairly and impartially between the parties in allowing the Claimant (they contend) to raise new issues and produce expert evidence shortly before the hearing and then going ahead with the hearing in those circumstances in face of protests from the Defendants (then acting in person) that they were not ready to proceed.
8. That is the subject matter of an application by order to be heard in March 2014 with an estimate of 2-3 days (an underestimate in my view from what appears to be listed for the hearing).
9. The stance of the Defendants was basically that I should make no order on the application and should adjourn it to be heard with or immediately after the applications challenging Mr Lee's Award for the reasons I have briefly set out above.
10. For the reasons I set out below I do not accept that that is the correct procedure.

BACKGROUND

11. The parties entered into a Partnership under a written Agreement ("the Partnership Agreement") dated 19^th February 2010. For the purposes of the present application I should make reference to some of the provisions.

ACCOUNTS

12. Accounts are dealt with under paragraph 9 which requires the partners to keep proper books of accounts (9.1) to agree to instruct the accountants to draw up the accounts as soon as reasonably practicable after the end of each Accounting Period (9.3) to determine Profit and Loss accounts in respect of that Accounting Period and a Balance Sheet (taking no account of goodwill) as at the end of each such Accounting Period (9.3). Finally within 7 days of the receipt from the accountants the Managing Partner is obligated to submit the accounts to the Partners for approval. Following such approval the Accounts shall be binding on each of the Partners except in the event of manifest error. If any partner fails or refuses to approve such accounts within one month of being submitted then the Partners shall refer any point in dispute to be determined by an independent accountant (acting as an Arbitrator and not an Expert) agreed by the Partners and in default of such agreement to be appointed by the President for the time being of the Chartered Institute of Accountants whose decision is to be final and binding (9.4).
13. The concept of "manifest error" is well understood see Walton Homes v Staffordshire County Council [2013] EWHC 255 (Ch). There is no issue over that because as I understand it no partnership accounts have been agreed in this partnership.
14. Pursuant to clause 9.4 the Defendants procured the appointment of an accountant arbitrator to deal with disputes regarding the accounts on 12^th June 2013 (a Mr Bunker was appointed).
15. Prior to that the Claimants had requested an arbitration as to whether there could be a dissolution of the partnership on 13^th April 2012. Mr Lee was appointed by the LCIA on 22^nd June 2012.
16. There is a tension between clause 9.4 and clause 33 under which Mr Lee was appointed. Clause 9.4 refers to disputes over the Annual Accounts. The Arbitrator is to be appointed by the Institute of Chartered Accountants. Clause 33 has a general provision as follows:-

"33.1 except as otherwise provided, any dispute arising out of or in connection with this agreement, including any question regarding its existence, validity or termination, or the legal relationship established by this agreement shall be referred to and finally resolved by arbitration under the Rules of the [LCIA]

33.2 this clause shall be without prejudice to the rights of any party to seek any injunctive relief or similar relief from the Courts to protect its intellectual property rights, confidentiality obligations, restrictions on the activities of any partner or former partner or other rights of any description. "

17. I should also refer to the provisions of retirement and death and expulsion in clauses 22 and 23.
18. Under clause 22.4 the Defendants are given (on giving 3 months' prior notice) the right to give notice of termination to the Claimant under the clause whereupon it shall cease to be a partner. It is entitled to be paid all sums due from its Current Account. It will be noted that any dispute over that will fall to be determined in accordance with clause 33 and not clause 9.4.
19. The Defendants purported to exercise that power but it came into effect only after the date of the Award of Mr Lee dissolving the partnership. It follows therefore that if the Award of Mr Lee stands that notice is of no effect because the partnership has already been dissolved.

MR LEE'S ARBITRATION

20. I do not propose to go into the details of that arbitration as it clearly involved a large amount of serious allegations against the Defendants and the service of a large amount of documents. During the course of the arbitration the Defendants made a number of complaints about the way in which Mr Lee allowed the Claimant to produce evidence which they categorise as expert evidence and rejected numerous applications to adjourn. The Defendants contend that these amount to serious irregularities that caused them serious injustice. Ultimately on 2^nd May 2013 the Defendants asked the LCIA to remove Mr Lee on the basis that his decision to proceed was unfair. That was rejected by the LCIA on 14^th June 2013 and he delivered a Partial Interim Award on 21^st June 2013.
21. On 8^th July 2013 the Claimant commenced claim HC13B002648 seeking a freezing order and a stay of the Bunker arbitration. Not to be outdone the Defendants on 19^th July 2013 commenced proceedings in Bristol (BS30461) challenging Mr Lee's Award on the ground of serious irregularity (section 68 of the Act) and seeking to have him removed as an arbitrator (ibid section 24). They have also sought permission to appeal on a point of law (ibid section 69) and an injunction restraining the Claimant and Mr Lee from taking any further steps to implement or enforce the Award.
22. HH J McCahill QC refused permission to appeal on paper but gave leave to renew the application to the RCJ and transferred that action to the RCJ for determination of it and other issues on 3^rd September 2013.

HEARING BEFORE BIRSS J IN HC13B002648

23. Mr Justice Birss granted the Claimants a freezing order in favour of the Claimant but rejected its application for a stay of the Bunker arbitration.
24. The Defendants had applied to Mr Lee for a stay of his Award which he rejected. Significantly they did not renew that application when they had a clear opportunity so to do before Mr Justice Birss.
25. The effect of Mr Justice Birss' stance was to permit both arbitrations to continue in the way in which they had been commenced. At first sight that appears to be illogical but in fact it is the perfectly correct result as I shall set out below.
26. After the hearing before Mr Justice Birss, Mr Lee on 18^th October 2013 directed the Defendants to send the accounting documents and made the peremptory order on 12^th November 2013. The outstanding matters in both arbitrations have been consolidated to be heard on a date to be fixed on or after 20^th January 2014 (excluding the present application).
27. The present application was issued on 22^nd November 2013 and on the same day the Defendants' solicitors wrote seeking an adjournment which the Claimant rejected on 25^th November 2013.

MR LEE'S AWARD

28. The Award is dated 21^st June 2013 and is a comprehensive Award which runs to some 76 pages. I need not go into the basis for the Award because the question whether the Award can stand will depend on the outcome of the Defendants' appeal listed for hearing in March 2014. The only matter before me is whether or not I should continue the enforcement of the Award in favour of the Claimants pending that hearing.
29. Mr Lee's decision was that it was just and equitable that the partnership should be dissolved pursuant to sections 35 (d) and (f) of the Partnership Act 1890 the date of dissolution being the date of this Award. He then made standard directions as to the winding up of the affairs of the partnership.
30. Pursuant to that he included the following provision:-

"(vi) that the parties endeavour to agree jointly within 14 days hereof the identity of a Chartered Accountant who will assist me with the drawing up of dissolution accounts. Failing the parties joint agreement I will select an appropriate Chartered Accountant".

31. The Defendants contend this is outwith his jurisdiction and accountancy matters (Mr Lee of course being a Barrister) fall to be decided under clause 9.4 and not clause 33. The Claimants do not accept that. Neither does Mr Lee. In the absence of an agreement he has appointed Saffrey Champness to be the Accountant to assist him. The Defendants also contend that is outwith his jurisdiction for the same reason.

ENFORCEMENT OF HIS ORDERS

32. As I have said Mr Lee has made a peremptory order in respect of the provision of the accounting material to the partnership accountants and his appointed accountant.
33. The Defendants (as I understand it) did not argue against that in front of Birss J when they had an opportunity so to do.
34. Further when Birss J when he granted the Claimant the freezing injunction on 12^th September 2013, he directed (by paragraph 5) that the Partial Final Award of Mr Lee and the costs of the Defendants challenge to the arbitration dated 22^nd August 2013 maybe enforced in the same manner as the judgment order of the court in the same effect.
35. Thus despite having a number of opportunities so to do the Defendants either failed (before Mr Lee) or have taken no steps (before Birss J) to stop Mr Lee's arbitration proceeding. Equally the Claimant's position under the Bunker arbitration is exactly the same; Birss J refused to stay that.
36. There are of course substantial challenges to the Lee Award but I am only concerned with what should happen to the enforcement of his Award before the matter is considered on the merits in March.

CLAIMANT'S POSITION

37. The Claimant contends of course that it has been excluded from the partnership, has been denied access to the books and the Defendants have committed serious breaches of fiduciary duty.
38. Underlying that of course is the undoubted right of the Claimant as partner to have access to all of the records of the partnership. The latest that this could have ended was the date of the notice given by the Defendants to terminate it as a partner. Even if that notice is correct and it will only be correct if the Lee Award is successfully overturned that postdates all the accounts that the Claimant needs in respect of the Lee Award.
39. The Claimant submits first that the Defendants have a duty to co-operate in the enforcement of the orders of the arbitration: see section 40 of the Act which requires (inter alia) that parties shall:-

"do all things necessary for the proper and expeditious conduct of the arbitral proceedings.

(2) this includes:-

(a) complying without delay with any determination tribunal s to procedural or evidence matters or with any order or directions of the tribunal…….."

40. The Defendants are plainly in breach of that requirement absent any stay of the Award pending the appeal. Further article 26.9 of the LCIA rules provide that:-

"26.9 All Awards shall be final and binding on the parties. By agreeing to arbitration in these rules, the parties undertake to carry out any Award immediately and without any delay (subject only to article 27); and the parties also waive irrevocably their right to any appeal, review or recourse to any state court or other judicial authority, in so far as such waiver may be validly made."

41. Finally the Claimant refers to section 42 of the Act which provides as follows:-

"(1) Unless otherwise agreed by the parties the court may make an order requiring a party to comply with a peremptory order made by the tribunal……

(3) The court shall not act unless it is satisfied that applicant has exhausted any available arbitration process in respect of the failure to comply with the tribunal's order…… "

42. The Claimant contends that it has exhausted the procedure by obtaining the Award and the order of the Arbitrator and the decision of Birss J giving it permission to enforce the Award as if it were a judgment of the High Court followed by the peremptory order.
43. Thus procedurally the Defendants have either failed to stay the Award or alternatively have taken no steps to seek to stay the Award.
44. The general approach in respect of orders in the High Court is that an appeal does not operate as a stay unless the Appeal Court or the Lower Court orders otherwise (CPR 52.7). As the Award is enforceable as if it is a Judgment of the High Court that must be the prima facie guiding principle. As Potter LJ said in Leicester City Circuits Ltd v Coates Brothers PLC [2002] EWCA Civ 474 the normal rule (which was the rule under RSC order 59) still applies. A stay is an exception rather than the rule.
45. There has to be a balancing exercise but the only matter put forward by the Defendants was that it would be wasteful because Mr Lee has no accounting jurisdiction they contend. Thus if he embarks on the accounts and his Award is set aside as regards jurisdiction it will be wasted.
46. This is based on the Defendants' contention that accounting matters are the exclusive domain of Mr Bunker under 9.4 and other matters are the domain of Mr Lee but not accounting matters.
47. In my view this approach is wrong.
48. Clause 9.4 plainly covers the preparation of the Annual Accounts only. This is an ongoing clause dealing with a situation where a partnership exists and there is a dispute between the partners over an item in the Annual Accounts. That is plainly the domain of Mr Bunker.
49. However the fact that Mr Bunker has that jurisdiction as regards the Annual Accounts has nothing to do with the accounts on a dissolution. He plainly has no jurisdiction to adjudicate on those. His jurisdiction is limited to questions arising on the Annual Accounts.
50. It follows that where there is a dissolution the Dissolution Accounts fall to be considered by Mr Lee as Arbitrator in respect of that dissolution.
51. There is nothing novel about this. The position is that the Annual Accounts prepared for the purposes of calculating the firm's divisable profits and balance sheet on a year basis maybe of no relevance when (for example) calculating the financial entitlement of an outgoing partner or the accounting exercise required on the death, retirement or expulsion of a partner; a fortiori in the case of a general dissolution (Lindley Partnerships paragraphs 1-74).
52. Mr Bunker's jurisdiction is to prepare the Annual Accounts. Those accounts are not binding on the dissolution as the above extract from Lindley shows. On a dissolution the normal order is for a general account of partnership dealings and transactions as from the date on which the partnership commenced unless some account has been settled between the partners in the meantime. Settled accounts are not normally reopened and the general account will in such case be taken as from the date of the last settled account see Lindley paragraphs 23-109 and 23-127. Even that normal rule can be displaced in certain circumstances. The account of course will also extend beyond the date of dissolution for dealing with the transactions and events that arise in winding up the affairs of the partnership.
53. As I understand the position no accounts have been prepared for the partnership. It follows therefore that on normal principles the dissolution accounts (i.e. those to be done by Mr Lee under clause 33) will cover the commencement of the partnership and go through to its dissolution.
54. Separately each annual account falls within Mr Bunker's jurisdiction. Mr Lee for the reasons I have set out is not bound by those accounts. They might have a different context: one set are being expected to show the yearly profits and the other to deal with for example assets on dissolution. It is unfortunate to put it at its lowest that these parties have two separate arbitration clauses with different jurisdictions and as this case shows a dispute as to the jurisdiction of the respective Arbitrators. Nevertheless it does seem to me that the strict position is that Mr Bunker prepares the Annual Accounts and Mr Lee prepares the dissolution accounts. It would make economic sense (assuming the present parties are interested in such an approach) for them to agree (with the concurrence of the Arbitrators) that the two processes are merged so that Mr Bunker prepares accounts and advises Mr Lee in the light of the preparation of the Annual Accounts on the dissolution accounts. Mr Lee can determine issues as to law which might arise on the dissolution accounts. That in my view would be the sensible approach but it requires a consensual approach by the parties to the arbitrations. Absent such a solution then each set of accounts will be prepared as I have set out above. This is in accordance with normal partnership principles arising out of a dissolution of a partnership where it has no settled accounts.
55. This is fundamental to the present application. As a matter of background I cannot overlook the fact that the Claimant for all the period in dispute is a partner. Further on its case of course it remained a partner of a partnership which has been dissolved until the dissolution is finalised. It is clear that as such partner it is entitled to full unrestricted access to the partnership books. It is also clear that whichever is the position about the accounts an account will have to be drawn. On the Claimant's case that will be 2 sets of accounts 1 by Mr Bunker and 1 by Mr Lee. On the Defendants' case there will be 1 set of accounts as prepared by Mr Bunker. In either case the Claimant is entitled to see the books for the purpose of progressing those accounts. There will be an account and that is an important factor in considering whether or not I should accede to the Claimant's application.

PRINCIPLES UNDER SECTION 42

56. The section provides:-

"42 Enforcement of peremptory orders of tribunal

(1)Unless otherwise agreed by the parties, the court may make an order requiring a party to comply with a peremptory order made by the tribunal.

(2)An application for an order under this section may be made—

(a)by the tribunal (upon notice to the parties),

(b)by a party to the arbitral proceedings with the permission of the tribunal (and upon notice to the other parties), or

(c)where the parties have agreed that the powers of the court under this section shall be available.

(3)The court shall not act unless it is satisfied that the applicant has exhausted any available arbitral process in respect of failure to comply with the tribunal's order.

(4)No order shall be made under this section unless the court is satisfied that the person to whom the tribunal's order was directed has failed to comply with it within the time prescribed in the order or, if no time was prescribed, within a reasonable time.

(5)The leave of the court is required for any appeal from a decision of the court under this section."

57. The position of the Claimant is that the section is made out. It has tried to obtain compliance with the Award but the Defendants have refused to comply with it and maintain that stance. Their only objection is based on the proximity of their appeals. As I have said above they applied to stay the order before Mr Lee and he dismissed their application. They have not (despite opportunities) sought to renew an application for a stay especially in the hearing before Birss J. The normal principles in respect of judgments under appeal in the courts is as set out above.
58. The Claimant is entitled to seek to enforce the order of Mr Lee. It is not a wasted exercise as accounts will be required and at the end of the day it is a partner and entitled to the books. The researches of Counsel have only found the Emmott case that deals with this section. In that decision Mr Justice Teare was faced with an application to enforce directions made in an arbitration under section 42. Unlike the case before me, the application was listed with the challenge brought by the Defendants under section 67 of the Act challenging the Award of the tribunal as to its substantive jurisdiction. He heard both applications. He granted the section 42 order and dismissed the cross application under section 67 of the Act (paragraph 45). In reaching that latter conclusion however in paragraph 33 he said this:-

"I shall deal with MWP's challenge to the jurisdiction but I am not persuaded that, even if succeeded, it would undermine the peremptory order. Mr Emmott counterclaims a 33% interest in MWP shares. The Steppe shares must be a major part of the value of those shares and so the peremptory order can be supported as an order in support of that counterclaim. This is reflected in the reasons given by the tribunal for its order made on 26 September:

"This is so whether or not the Respondent's new proprietary claim to 27% of the Claimant's Steppe shareholding is successful."

59. Thus Teare J was willing to make the section 42 order even if the section 67 application survived. The same appertains here in my view. At the present time the application under section 42 is being made against the backcloth of the Defendants' challenge to the Award which is comprehensive. I am not in a position to adjudicate on the merits of those applications brought by the Defendants. It would be quite wrong of me to do so as they are fixed to be heard in a full hearing before a different Judge in March 2014. It follows that I am prepared to consider the situation now as if the Defendants had an arguable case that their challenges to the Award will be successful.
60. I found Teare J's judgment helpful but two things must be born in mind. First it is a decision of a Judge at first instance and is therefore a persuasive authority. Second it is a decision where he sets out how he exercised his discretion under the circumstances before him. A decision on the facts of a particular case is always of limited relevance when a Judge is considering the exercise of a different discretion in a different case. There can in reality be no precedent established by the exercise of a discretion in those circumstances.
61. Nevertheless it is useful to consider his careful judgment.
62. First I adopt his general review of the inter-relation between the arbitrations and the courts under the Act in paragraphs 46-58.
63. I also take note of what he said in paragraphs 59 and 62 as follows as these were relied upon by Ms Tozer who appears for the Defendants:-

"59 I also accept, as submitted on behalf of MWP, that section 42 confers a discretion upon the court and that it would be inconsistent with the existence of a discretion that the court should act as a rubber stamp on orders made by the tribunal. However, I do not accept that the court must in every case satisfy itself that the case is a proper one for the order which is sought if by that is meant that the court must review the decision made by the tribunal and consider whether the tribunal ought to have made the order in question. The reasons that I do not accept that submission are as follows:

i) It is inconsistent with general principle (c) in the context of sections 33 and 40 of the Act.

ii) The Act confers on the court limited powers to rehear or review decisions of the tribunal. It would be surprising if a power to rehear or review was hidden within section 42.

iii) It is true that the making of an order under section 42 exposes the party against whom the order is made to being in contempt of court if he breaches the order. But that is the purpose of section 42. It may only be exercised when the arbitral process is exhausted and the party in question has failed to comply with a peremptory order. I am not persuaded that the exposure of that party to being in contempt of court requires the court to rehear or review the arbitrator's decision to grant the peremptory order.

iv) Counsel relied on a passage in Merkin On Arbitration at paragraph 16-25: "……the court has a discretion under s.42 of the 1996 Act whether or not to make an order. Relevant factors will doubtless be the reasonableness of the requirements imposed by the arbitrators' peremptory order, and whether the court takes the view that the problem could be resolved by the arbitrators themselves in their approach to the arbitration" (emphasis added). If this passage is intended to mean that the court will routinely consider whether it would have made the order I do not consider that it is correct.

60 Counsel for MWP referred to the rights of KHI under charging and pledging agreements with MWP and to HSBC's general lien over KHI's property. It was submitted that having regard to those rights the basis upon which the tribunal had concluded that it is within MWP's power to do that which it had been ordered to do by the peremptory order is not apparent. That may be so in the sense that the tribunal has not set out in detail the reasoning which led to the conclusion it reached. But the tribunal clearly stated when making the peremptory order that

"we have taken the view that it has been perfectly within Mr. Wilson's influence or control to bring about a situation in which the Steppe shares are secured as we have directed."

61 Counsel for MWP has submitted that the court should satisfy itself that it is within MWP's control to do that which it has been ordered to do. For the reasons I have given I do not consider that that is appropriate when the tribunal has reached a clear and firm view on that very matter. That is particularly so in circumstances where the tribunal has heard oral evidence from Mr. Wilson  and the court has not.

62 In what circumstances then might a court decide not to make an order that a party comply with a peremptory order of the tribunal? In general terms the answer to that question will be where such an order is not required in the interests of justice to assist the proper functioning of the arbitral process; see para.212 of the DAC report. This is not the occasion for a comprehensive list of such circumstances, even assuming it were possible to compile such a list. One example might be where there has been a material change of circumstances after the peremptory order was made. Another might be where the tribunal has not fulfilled its duty to act fairly and impartially between the parties in breach of its general duty to do so. Another might be where the tribunal has made an order which it had no power to make."

64. It would be quite wrong for a court to consider the exercise of a discretion under section 42 as being a rubber stamping exercise. Even without section 42 the court retains a discretion as to the enforcement of orders which are under appeal. Nevertheless I accept and agree with his observation that the exercise of a discretion under section 42 does not require a court to revisit the Award of the Arbitrator that is sought to be enforced. That would create a great difficulty as the section 42 hearing would be a lengthy and detailed affair. Equally I agree with him that the fact that the order is under appeal is of itself a factor to be born in mind but is not conclusive. The other facts that are relevant in my view are that the Defendants have not sought to comply with the order despite their obligations so to do as set out above and are simply attempting to act as if the Award has been stayed when it has not. No reason of any credibility in my view has been put forward to justify this stance. The presence of the appeal is also a factor but it is not a decisive factor.
65. Although the Award has been directed by Birss J to be enforced as if it was an order of the court that does not mean in my view that the requirements of section 42 are replaced with the general approach which I have set out above concerning the enforcement of judgments under appeal. There are further requirements to section 42 see subsection (2). However all of those criteria are made out.

CONCLUSION

66. I should consider all the relevant facts and I have set them out above. It seems to me that the proper consideration of the power under section 42 is to accede to the Claimant's application. It is entitled to enforce the Award for the reasons I have set out above; the Defendants are in breach of their contractual duties and their duties in the Arbitration and in the Award itself. The fact that they are appealing the Award of the Arbitrator is one factor but the rights of the Claimant to have access to the records and the undoubted inevitability of accounts in one form or another justifies the making of the order. When balanced against those factors the appeal is not of great significance. This of course reflects what Birss J did when he declined to stop either arbitration. I am of the same view and that is why this arbitration should, given the Defendants' stance, be continued by the court exercising its power under section 42 which I will do.