Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2013] CSOH 85

P338/12

OPINION OF LORD UIST in the Petition of CHRISTINA S FR 224, a partnership at will; and FREEDOM FISH LTD, SHANNON FISHING LTD and PETER & J JOHNSTONE LTD, the whole partners thereof as such partners and as individuals Petitioners for Judicial Review of a decision by the Scottish Ministers to amend the landing details of the Christina S FR 224 and to reduce the quota attributable to the said vessel in respect of the years 2007 to 2012 ________________

Petitioner: R W Dunlop QC, Pugh; The Alistair Dean Law Practice

Respondents: Cameron; Scottish Government Legal Directorate

30 May 2013

Introduction

[1] The petitioners are a partnership and the individual partners thereof. They operate, and have operated since before 2004, the fishing vessel the Christina S FR 224 (the vessel), which is authorised to fish by, and subject to the conditions of, a licence issued under section 4 of the Sea Fish (Conservation) Act 1967 (the Act) and the Sea Fish Licensing Order 1992 (SI 1992/2633) (the Order). The licence imposed on the vessel certain conditions which limited the amount of fish which it was permitted to land. The vessel is ordinarily crewed by Ernest Simpson, who owns 100% of the shares in Freedom Fish Ltd, and his son Allan, who owns 100% of the shares in Shannon Fishing Ltd. They use the vessel to fish for pelagic fish, namely, western mackerel, North Sea herring and west coast herring. The respondents are the Scottish Ministers, who have responsibility for the former Scottish Executive Environment and Rural Affairs Department (SEERAD), since replaced, so far as is material for present purposes, by Marine Scotland.

[2] The petitioners seek judicial review of a decision by SEERAD to amend the landing details of the vessel by reducing the quota attributable to it for the years 2007 to 2012. In particular, they seek reduction of a decision by SEERAD dated 10 April 2007 to vary the landing details of the vessel between 2001 and 2004 and to reduce the vessel's fishing quota for the years 2007 to 2012. There are two grounds of challenge of the decision. The first is that the decision was taken in a manner contrary to natural justice, in that the respondents refused to disclose the evidence on which they relied, and the petitioners were accordingly unable to answer the case against them or to comment on the evidence. The second is that the decision was ultra vires of the respondents under section 57(2) of the Scotland Act 1998 in respect that (i) by refusing to disclose the evidence against the petitioners they acted contrary to the fundamental principles of natural justice, to which they were obliged to have regard when taking decisions in an area within the ambit of European Union (EU) law; and (ii) by interfering with a possession of the petitioners in a manner not authorised by law, they acted contrary to article 1 of Protocol 1 (A1P1) to the European Convention on Human Rights (ECHR).

The factual background

[3] The European Union, by virtue of the EU Common Fisheries Policy, allocates a fishing quota to each member state for each year. The allocation of that national quota to individual vessels is left to the discretion of individual member states. The United Kingdom has adopted a system of fixed quota allocation (FQA) units which attach to each individual fishing vessel. Most fishing vessels are members of producers' organisations which are permitted to pool their members' FQA units. In each year the national fishing quota is apportioned among the producers' organisations and individual vessels outside them. Producers' organisations may then allocate their quota among their members in accordance with their own rules, but in practice each vessel is allocated its quota in accordance with its own FQA units. The system is given effect through the licence conditions imposed on individual fishing vessels, the internal rules of the producers' organisations and the Rules for the Management of the UK's Fisheries Quotas published each year by the respondents and the equivalent authorities in other parts of the UK. The producers' organisation of which the petitioners are members is the Scottish Fishermen's Organisation Ltd (SFO).

[4] In 2006, as a result of investigations carried out by it, the Scottish Fisheries Protection Agency (SFPA) concluded that in the years 2001 to 2005 many British and Irish fishing vessels had made undeclared landings in excess of their permitted quotas at Scottish ports. The UK had therefore exceeded the national quota allocated to it under the CFP during those years. The UK government accordingly reported to the European Commission that that overfishing had occurred. The European Commission in response enacted Commission Regulation (EC) 147/2007 of 15 February 2007 adapting certain fish quotas from 2007 to 2012 pursuant to article 23.4 of Council Regulation (EC) 2371/2002 on the conservation and sustainable exploitation of fisheries resources under the CFP, the effect of which was to reduce the national quotas for mackerel and herring which had previously been allocated to the UK and Republic of Ireland for the years 2007 to 2012. The UK authorities consequently required to allocate the reduction in the national quota among the vessels in the British fishing fleet. SEERAD was responsible for such allocation in Scotland and considered that the burden of the quota reductions should be imposed as far as possible on those vessels which had been responsible for the overfishing. The policy which they adopted was that, insofar as the vessels responsible were identifiable and still active, their quota should be reduced for the years 2007 to 2012 to reflect their overfishing. Insofar as the responsible vessels were unidentifiable or had ceased to trade, the remaining reduction was to be borne across the industry as a whole in the form of a general reduction in the quota available to the UK fishing fleet.

[5] On 10 April 2007 SEERAD wrote to Peter & J Johnstone Ltd alleging that the petitioners had made undeclared landings during the years 2001 to 2004 amounting to 8,120.616 tonnes of western mackerel, 2,300.184 tonnes of North Sea herring and 447.881 tonnes of west coast herring. The letter stated, inter alia, as follows:

"As you will be aware, the Scottish Fisheries Protection Agency (SFPA) investigations into three pelagic processors uncovered quantities of undeclared landings of herring and mackerel in 2005 and prior years ...

As a result of the ongoing investigation evidence of further undeclared landings between 2001 and 2004 has been uncovered in respect of the [vessel]. Based on the (sic) that evidence we intend to adjust the 2001-2004 landings data to record what the Department believes to be the true catch against the above vessel in respect of the relevant landings/quota stocks. The table(s) below provide(s) the necessary details ...

It is proposed to make the above adjustments 4 weeks from the date of this letter. If you wish to make any representations in relation to this matter they should be made (in writing) to me at the above address within that timescale. Any representations you make will be considered and the Department's final decision conveyed to you thereafter ...

On the basis of the figures in the above table, table 2 below sets out the tonnage (by year and total amount) of the relevant quota stocks which require to be repaid over the 6 year repayment period (starting in 2007) in respect of the undeclared landings associated with the above vessel .."

Table 2 then set out that the petitioners' quotas for the years 2007 to 2012 would be reduced by a total of 5,633.672 tonnes of western mackerel, 2,300.2 tonnes of North Sea herring and 427.879 tonnes of west coast herring, to be spread over the six year period. The letter did not indicate the nature of the evidence on which SEERAD had relied in order to reach its conclusion, whether as to the fact that undeclared landings had taken place or as to their amount.

[6] Peter & J Johnstone Ltd then requested details of the evidence relied upon by SEERAD in arriving at the decision of 10 April 2007 and the petitioners appointed Mr Ian MacSween to represent their interests. Mr MacSween sought clarification from SEERAD of the basis for arriving at the quota deductions. On 4 May 2007 Peter & J Johnstone wrote requesting a meeting with the then Scottish Fisheries Minister, Richard Lochhead. On 20 August 2007 he replied stating that the petitioners should, at least in the first instance, meet SEERAD officials. In an undated letter sent in early September 2007 to the Marine Directorate of the Sea Fisheries (Management) Division, which had by then replaced SEERAD on this issue, Mr Simpson requested details of "the gramme sizes of the alleged over quota fish landed by [the vessel] in 2001 through 2004", together with "evidence you have of this alleged overcatch". A response dated 24 September 2007 referred back to the letter of 10 April 2007 without providing any further details or supporting evidence. On 29 September 2007 Mr Simpson emailed Mr Robb of the Marine Directorate with details of what he alleged were errors in the quota reductions imposed on the vessel and requested details of how the quota deductions had been arrived at. On 8 November 2007 the Marine Directorate replied stating that the request was being considered. Mr Simpson sent a reminder on 6 December 2007 stating that he awaited a reply. Peter & J Johnstone Ltd emailed Mr Robb on 7 January 2008 stating that Mr Simpson had still not received replies to his various letters requesting details of how the landing figures used in the decision of 10 April 2007 had been arrived at. As that request was not complied with, on 8 June 2009 Mr Simpson emailed the Marine Directorate renewing his request and also made a request for disclosure of the information under the Freedom of Information (Scotland) Act 2002, which was refused by letter dated 3 July 2009. He then sought a review of that refusal, which was itself refused by letter of 9 September 2009. By letter dated 22 December 2009 Mr Simpson challenged the basis for that refusal. By letter dated 30 December 2009 Marine Scotland (which by then had become the successor to the Marine Directorate) suggested that the request for information be rephrased. By letter dated 29 January 2010 Mr Simpson submitted a rephrased request for information relating to the quota deductions imposed on the vessel. That request was refused by letter dated 1 March 2010. On 28 April 2010 Mr Simpson responded stating that, while he would not challenge the refusal of his request for information, he wished to make it clear that he did not accept the accuracy of the factual premise upon which Marine Scotland had proceeded. He also stated that, as one of the stated grounds for refusing to disclose the information was potential prejudice to ongoing criminal proceedings, he reserved his right to renew his request for information once the criminal proceedings had concluded. Marine Scotland replied on 19 May 2010 stating that, while his existing request for information was closed, a renewed request could be made at any time. Shortly thereafter solemn criminal proceedings referable to alleged overfishing were commenced against, among others, Mr Simpson and his son Allan, who first appeared on petition in January 2011. In the course of these criminal proceedings the Crown, in mid-2011, disclosed the evidence upon which it intended to rely.

[7] The petitioners aver that this was the first occasion on which they (via Mr Simpson and his son) became aware of the evidence upon which it was contended that the vessel had been involved in overfishing, and the first occasion on which they had the opportunity to consider the accuracy of that evidence: before that they had had no meaningful opportunity to comment on the quota reductions imposed by the decision of 10 April 2007 or to make submissions on the credibility, reliability or accuracy of the records on the basis of which the reductions were imposed, on any inferences that SEERAD had drawn from them or on the accuracy of any calculations made by SEERAD or the respondents. They accept that an opportunity to make submissions was afforded but maintain that it was effectively meaningless in the absence of information as to the basis for the reductions. They also aver that after the information was received Mr Simpson and his son tendered certain guilty pleas which related to overfishing to a materially lesser extent than was advanced in the decision of 10 April 2007.

[8] Against that background the petitioners contend that it is quite clear that the letter of 10 April 2007 contained the operative decision, which bit a few weeks later when the quota reductions were applied. While the petitioners were allowed four weeks to respond to that letter, neither before the decision was made nor at any point thereafter which would have been of utility to the petitioners was there any disclosure to them of the evidence which was said to provide the foundation for the quota reductions imposed. While a letter in July 2008 disclosed some of the evidence, full disclosure was not made until July 2011 and, in any event, disclosure in July 2008 can hardly be said to justify a decision made in April 2007 which became effective within a few weeks of that decision.

Natural Justice
Submission for the petitioners

[9] The first ground of challenge is that the decision of 10 April 2007 was contrary to natural justice. The petitioners referred to the following authorities in support of that ground of challenge.

[10] In Kanda v Government of Malaya [1962] AC 322 a police inspector in Malaya was dismissed from office on the ground that at an inquiry before an adjudicating officer he had been found guilty on a charge of failing to disclose evidence at a criminal trial. The Privy Council held that the failure to supply him with a copy of the report of the Board of Inquiry, which contained matter highly prejudicial to him and which had been sent to and read by the adjudicating officer before he sat to inquire into the charge, amounted to a failure to afford the inspector a reasonable opportunity of being heard within the meaning of the Constitution and a denial of natural justice. At pps 337-338 Lord Denning stated as follows:

"The rule against bias is one thing. The right to be heard is another. These two rules are the essential characteristics of what is often called natural justice. They are the twin pillars supporting it. The Romans put them in the two maxims nemo judex in causa sua and audi alteram partem. They have recently been put in the two words, impartiality and fairness. But they are separate concepts and governed by separate considerations. In the present case inspector Kanda complained of a breach of the second. He said that his constitutional right had been infringed. He had been dismissed without being given a reasonable opportunity of being heard.

If the right to be heard is a real right which is worth anything it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them. This appears in all the cases from the celebrated judgment of Lord Loreburn LC in Board of Education v Rice [1911] AC 179, 182 down to the decision of their Lordships' Board in Ceylon University v Fernando [1960] 1 All ER 631. It follows, of course, that the judge or whoever has to adjudicate must not hear evidence or receive representations from one side behind the back of the other. The court will not inquire whether the evidence or representations did work to his prejudice. Sufficient that they might do so. The court will not go into the likelihood of prejudice. The risk of it is enough. No one who has lost a case will believe he has been fairly treated if the other side has had access to the judge without his knowing. ...

Applying these principles, their Lordships are of opinion that Inspector Kanda was not in this case given a reasonable opportunity of being heard."

It was submitted that the above observations were entirely apposite in the circumstances of the present case. Someone who is the subject of a decision must see the evidence against him: the decision-maker cannot act on the basis of secret evidence.

[11] In Crompton v General Medical Council [1981] 1 WLR 1435 the GMC directed that a doctor's name be erased from the register on the basis of two psychiatric reports which it refused to disclose to him. The Privy Council held that by refusing to allow the doctor to see the psychiatrists' reports or to inform him of their contents the GMC had failed to observe the rules of natural justice and the direction for erasure was therefore invalid.

[12] In In re D (Adoption Reports: Confidentiality) [1996] AC 593 it was held by the House of Lords that a mother opposing an application by her former husband and his new wife for adoption of her two sons was entitled to see two sections of the report of the guardian ad litem that expressed in detail the children's wishes and feelings towards their parents. Lord Mustill stated at p 615D:

"It is a fundamental principle of fairness that a party is entitled to the disclosure of all materials which may be taken into account by the court when reaching a decision adverse to that party."

[13] A challenge similar to the present one had been brought in Ireland in Atlantean Ltd v Minister for Communications and Natural Resources [2007] IEHC 233. The facts are conveniently set out by Clarke J at para 1.3 as follows:

"In October 2006 the Minister came to the view that the MFV Atlantean was responsible for a significant amount of the alleged undeclared landings in Scotland. The Minister further came to the view that the burden of the reduced quotas available to Ireland (resulting from such undeclared landings) should be borne by those boats, including the Atlantean, who had, in the Minister's view, been guilty of making the undeclared landings concerned. In those circumstances two separate decisions appear to have been taken. On 24 October 2006 the Minister wrote to Atlantean informing its managing director that a decision had been taken not to grant any authorisation to the MFV Atlantean to fish for mackerel in the autumn fishery of 2006 ("the October decision"). On 24 January 2007 the Minister granted the MFV Atlantean what would appear to be a reduced mackerel authorisation for the spring fishery 2007 which was stated to have been the subject of deductions to compensate for alleged over-fishing in the years 2001-2004. That letter also indicated that further deductions would be made in the years 2008-2012 for the purpose of 'compensating' for the same over-fishing ('the January decision')."

[14] In dealing with the issue of fair procedures in section 4 of his judgment (which I quote at length because of its importance) Clarke J stated:

"4.1 ... There is no doubt that the Minister's decision that Atlantean was responsible for undeclared landings was a decision which has had, and will have, a very significant effect on Atlantean's business and was, therefore, the type of decision where the Minister was obliged to comply with the rules of constitutional justice. The real issue concerns the manner in which the rules of constitutional justice should be met in a case such as this.

4.2 There is no dispute as to the information supplied, in advance of any decision, to Atlantean. The relevant schedules were supplied which set out the reported undeclared landings supplied to the Minister and his officials by the Scottish authorities. Those schedules would have made clear to Atlantean the dates and amounts, in considerable detail, of the alleged undeclared landings. It seems that those allegations should be seen in the context of the fact that all properly declared landings are recorded in a manner which would enable the Minister, and, indeed, Atlantean, to have access to the official records of such landings. It is by no means clear on the evidence before me as to the extent to which there may have been declared landings made by Atlantean on the days in question. It is, quite frankly, surprising that this information has not been put before the court by either side in that it would seem to have been available to both parties. It is not, therefore, clear as to whether the substance of the allegations being made were that Atlantean, on the one hand, had made landings on an occasion when no landings had been declared or, on the other hand, made landings in excess of the amounts declared on the relevant occasion. On the evidence it seems clear that both the Minister and Atlantean would have been aware, in respect of each incidence, as to which form of allegation was being made.

4.3 Be that as it may, it is also clear that no additional information was furnished to Atlantean to substantiate the allegations or, indeed, to put forward any other basis for the allegations save that the schedules represented the particulars reported to the Irish authorities by their Scottish counterparts. It is also clear that Atlantean complained about not having been told the case which it had to answer although it did not, specifically, seek any particular details. Against that background the precise nature of the Minister's obligation, in order that he might be said to have complied with the principles of constitutional justice, needs to be addressed.

4.4 That any party who is entitled to the benefit of procedures complying with the rules of constitutional justice is entitled to know the case against him cannot be doubted. However, it is also well settled that the precise application of the rules of constitutional justice depends on all the circumstances of the case under consideration. In that context the Minister places particular reliance on Mooney v An Post [1998] 4 IR 288. While Mooney was concerned with a purported dismissal from employment, the general principles are, in my view, equally applicable to a case such as that with which I am concerned.

4.5 Barrington J (speaking for the court) indicated the following general approach:

'The terms natural and constitutional justice are broad terms and what the justice of a particular case will require will vary with all the circumstances of the case. Indeed, two of the best known concepts of natural and constitutional justice may not be applicable at all in certain cases. As the learned trial judge has pointed out, the principle of nemo judex in sua causa seldom applies in relation to a contract of employment where the employer judges the issue and is an interested party. Likewise, it is difficult to apply to a contract of employment the principle of audi alteram partem which implies the existence of an independent judge who listens to one side and then to the other.'

4.6 Barrington J went on to note that it was certain that 'the employee is entitled to the benefit of fair procedures but what these demand will depend upon the terms of his employment and circumstances surrounding his proposed dismissal. The minimum he is entitled to is to be informed of the charge against him and to be given an opportunity to answer it and to make submissions.'

4.7 The court went on to consider the specific circumstances of the case before it. The plaintiff was a postman which the court found involved a position of trust. It is also clear that An Post had received complaints which caused it to have misgivings about the integrity of the postal service arising from alleged conduct on the part of the plaintiff. In those circumstances Barrington J went on to hold that :

'It appears to me that the defendant was entitled to expect a candid response from the plaintiff when they put these misgivings to him and that it was not sufficient for the plaintiff simply to deny responsibility and to say that he could not remember back to yesterday week.'

4.8 This latter paragraph has to be seen against the background of the fact that An Post had available to it statements from a number of witnesses describing suspicious behaviour on the part of the plaintiff. The quoted response of the plaintiff related to circumstances where he had been given details of the suspicions aroused and the statements which gave rise to those suspicions. Barrington J went on to note that the plaintiff, by his action, had raised no issue of fact which needed to be referred to a civil tribunal. In substance the court held that the plaintiff was not entitled to say 'I am not guilty. You prove it.'

4.9 The first issue of principle which arises is as to whether that jurisprudence, which of course stems from the employment law field, is applicable to a regime such as fishing authorisations with which I am concerned. I am satisfied that it is. The whole purpose behind the EU quota system is to preserve fish stocks generally and ensure an equitable distribution of the entitlement to fish. Within the Irish quota, ministerial authorisations are, clearly, designed to the same end. Any fishing boat which receives an authorisation has, therefore, a degree of trust imposed on it, that it will comply with its obligations under the regime as a whole and will not, in particular, engage in undeclared landings. I am satisfied, therefore, that, as a matter of principle, a party, as the Atlantean, is in a similar position to an employee in an office of trust and is not entitled to simply sit back and, in the words of Barrington J, say 'I am not guilty. You prove it.'

4.10 However, counsel for Atlantean did not seriously contest the general application of that principle to cases such as that with which I am concerned. He did, however, seek to draw a significant distinction between the factual circumstances which existed in Mooney, on the one hand, and in this case, on the other hand. Reliance was placed on the fact that the plaintiff in Mooney had been furnished with the basis of his employer's misgivings. He was told about the statements made by various interested observers which, on the face of it, could readily have given rise to an inference of wrongdoing. It was on that basis that the Supreme Court was satisfied that it was not open to the plaintiff to adopt a position which might have been entirely acceptable in a criminal process of requiring the case against him to be proven.

4.11 However, the situation in this case is, in my view, different. Despite being asked what the case against Atlantean was, the Minister did no more than specify the reports which he received from the Scottish authorities. Despite being asked for the various reports, same were not furnished save for the schedules which I have noted. No basis was given for the conclusions which the Scottish authorities had reached. Indeed, what is more surprising, is that there is no evidence that any attempt was made to obtain from the Scottish authorities any further information as to the basis upon which those authorities had reached the conclusions which were incorporated into the reports sent to the Minister's officials. I am prepared, for the sake of the argument in this case, to accept that it may well be necessary to give some latitude to the competent authorities in Ireland when faced with a situation similar to that with which the Minister was faced in this case. ... The Minister was faced with the fact of a reduction in quota. The only matter within the discretion of the Minister was how to deal with that reduction. The Minister was more than entitled to seek to protect those boats who had not, apparently, been responsible for the circumstances giving rise to the reduction from having to bear any of the burden of that reduction. In those circumstances I am more than satisfied that the Minister was entitled to seek to impose the burden of the reductions on the offenders. In such circumstances a person, in the position of the Minister, charged with implementing an EU regime, may in substance be required to act on reports received from other competent authorities within the Union. It may well, in those circumstances, be necessary for the courts to pay due regard to the Minister's general obligations in considering the extent to which the Minister may have to comply with all the requirements of constitutional justice on the facts of any individual case.

4.12 However, it seems to me that any latitude that might require to be given to a competent authority in Ireland, faced with such a situation, is dependent on that authority being able to establish that it had made reasonable efforts to provide as much information and evidence as could be provided, so as to enable the potentially affected party to have a reasonable opportunity to answer the case against him. In those circumstances, it seems to me that it was, at a minimum, incumbent on the Minister to at least seek from the Scottish authorities the basis upon which they had reached the conclusions reported to Irish officials. It is not apparent to me that there should have been any difficulty in the Minister seeking and obtaining such information. The fact that the Scottish authorities were able to produce such detailed accounts of the specific amounts of alleged landings suggests there must have been some form of records discovered by the Scottish authorities to enable them to carry out hose calculations. It is difficult to see why copies of the relevant records, or at least a description of the nature of those records, could not have been obtained and supplied to Atlantean.

4.13 Without any information as to the basis upon which the Scottish authorities had formed the view that Atlantean was guilty of unlawful landings, then it seems to me that it was virtually impossible for Atlantean to answer the allegations. It would, in my view, be more apposite to describe what happened in this case as involving the Minister saying 'the Scots tell me that you're guilty. Prove that you are innocent' rather than Atlantean saying 'I'm not guilty. You prove it.'

4.14 It may well be that if the Minister had provided Atlantean with an appropriate statement as to the basis upon which the Scottish authorities came to their conclusion the ball would, in the same manner as it did in Mooney, have passed into Atlantean's court and Atlantean would have been obliged, if it wished to contest the matter, to put forward its case in some detail. If, for example, it was apparent that in one of the raids described to Irish officials, the Scottish authorities had obtained apparently valid records, suggesting that Atlantean had been guilty of undeclared landings (and preferably if copies of such records could have been made available) then it would have been more than reasonable to expect Atlantean to put forward whatever explanation it wished as to why those records should not be accepted as being accurate. The Minister could then have adjudicated on whatever issues had been raised.

4.15 However, the question of there being such records is purely speculation on my part deriving from the fact that there seemed to have been very detailed knowledge as to the amounts of the undeclared landings. It could well be that the basis for the conclusions reached by the Scottish officials were entirely different, and, for example, dependent on accounts given by witnesses or persons involved in the undeclared landings themselves. I simply do not know. More importantly, Atlantean did not, at the time of the decision, know. Atlantean did not , in my view, have a reasonable opportunity, in all the circumstances, to know the case against it. While Atlantean would have been under an obligation, analogous to that identified by the Supreme Court in Mooney, to make a candid statement, it is difficult to see what statement could have been made unless Atlantean was told of the basis of the obligation against it. While it is fair to describe the position adopted by Atlantean as a bare denial, it is equally fair to describe the position adopted by the Minister as a bare accusation. It is hard to expect a bare accusation to be met by anything more than a bare denial.

4.16 There is one aspect of this matter which has, I must say, caused me some misgivings. It its initial response to the Minister's letter of 4 October 2006 Atlantean sought various details of the accusation made against it. On p 2 of its letter of 17 October 2006 it said the following:

'In your letter you state that the UK authorities reported to the EU Commission undeclared landings of mackerel into Scotland by Irish registered fishing boats. You go on to say that the UK has also advised the Minister of a number of undeclared landings by certain Irish fishing vessels in 2005. Are we therefore to take it that there have been two separate complaints made to the Irish Government with two separate sets of information being supplied? May we see and have a copy of the UK authorities' report to the EU Commission? And the opportunity to respond to that report? May we see and have a copy of the UK's advice to the Minister on the alleged undeclared mackerel landings by Irish fishing vessels in 2005? And have the opportunity to respond to such advice?'

4.17 The Minister's letter of reply (24 October 2006) did not respond to that request at all, but confined itself to complaining that the Atlantean had not responded to the allegations. I find it difficult to see why at least some of the requests made by Atlantean were not, at least, responded to.

4.18 On the other side it does have to be said that the contents of Atlantean's solicitors' follow-up letter of 20 December are also less than helpful insofar as this issue is concerned. ... Insofar as the argument concerning the procedures followed by the Minister is concerned, the letter could be described as more closely resembling a polemic rather than a legal argument even though, on a careful reading, it does raise some of the points now relied on. It does have to be said that a more focused engagement by both sides, on the issues concerning the appropriate process, might have avoided the necessity for these proceedings.

4.19 In all the circumstances I am satisfied that the Minister was in breach of the principles of constitutional justice by failing to afford Atlantean some reasonable opportunity to know the basis of the allegations against it, so as to pass the burden on to Atlantean to make a more detailed response."

Clark J went on to conclude that the Minister's decisions had to be quashed.

[15] It was submitted that the above cases were all to the same effect and that Atlantean was on all fours with the present case. Constitutional justice in Irish law was the same as, or similar to, natural justice. The need for the Irish authorities in Atlantean to obtain information from the Scottish authorities would have made it more difficult for them than for the respondents to comply with the duty of disclosure. The present case was therefore a fortiori of Atlantean. The petitioners ought to have been given sight of the evidence against them before the decision of 10 April 2007 was made, or at least before it came into effect. On any view that did not happen. Disclosure made after the decision was irrelevant. It was no answer to say that the petitioners knew their side of the story if they were kept in the dark about the basis for the respondents' decision. The right to reply had to be an informed right (R v Home Secretary ex parte Doody [1993] 1 AC 531 per Lord Mustill at p 563G-H). The respondents' letter of 30 July 2008 came more than 15 months after the operative decision. It was self-evidently incomplete and acknowledged only part of the evidence held by the Lord Advocate. Some of the information which was provided appeared to have been redacted. The respondents conceded that it did not cover all the landings or give all the evidence of the landings. It fell to be contrasted with what was produced by the prosecution in the criminal proceedings, namely, four PEN drives containing tens of thousands of pages. The fact that there was an ongoing criminal investigation made no difference: if it did, it would be a licence for arbitrariness and caprice. Any arm of the Executive would be able to take a decision without revealing the basis for it as long as it could point to an ongoing criminal investigation (not even a prosecution). There was no authority to justify such a proposition and the point had not even been argued in any other case. Terrorism cases were an exception as considerations of natural security could justify withholding evidence and there were special advocates appointed. There were in this case no valid countervailing considerations which would justify refusal of disclosure of the evidence. One could ask why the disclosure made in July 2008 was not made in April 2007. A decision arrived at wholly or partly on secret evidence was subject to successful challenge.

Submission for the respondents

[16] It was accepted on behalf of the respondents that an administrative decision-maker had to act in a way that was procedurally fair. On the other hand, there was no hard and fast rule laying down a certain procedure of disclosure in every situation: how much information fell to be disclosed was dependent on the circumstances of the particular case. In Doody Lord Mustill stated as follows at p 560D-G:

"What does fairness require in the present case? My Lords, I think it unnecessary to refer by name or to quote from any of the often-cited authorities in which the courts have explained what is essentially an intuitive judgment. They are far too well known. From them I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative decision within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result, or after it is taken, with a view to procuring its modification, or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer."

[17] The petitioners had been provided with the opportunity to make representations to modify the decision. How much information was disclosed was dependent on the circumstances of the particular case. What was required, in the words of Lord Mustill, was that "the gist of the case" should be disclosed. The cases of Kanda, Crompton and In re G established that in the particular circumstances of those cases there was an obligation to act fairly. Each decision was fact-specific. Little could be taken from Kanda in view of its different circumstances. Crompton involved the suspension of a doctor from practice by a disciplinary committee whose rules allowed it to receive information in confidence, and little could be garnered from it. The same went for In re D.

[18] It was accepted that the facts in Atlantean were similar to the facts in the present case, although there was no criminal process in that case. The court there was applying the Irish concept of constitutional justice (para 4.1 of the judgment). The party who was the subject of a decision was under an obligation to take some action: he could not just sit back and do nothing. In this case the respondents did not simply fail to engage with the petitioners, but entered into correspondence with them and provided them with relevant information in July 2008. The respondents made reasonable efforts to provide as much information as they could, given the background of the criminal investigation: on 30 July 2008 they disclosed detailed evidence and explanations. Atlantean showed that neither side could sit back. It differed from the present case because of the international perspective involved and the fact that there was no background of a criminal investigation. Moreover, all that the complainants in Atlantean saw was the schedule.

[19] The following four propositions could be taken from the cases:

(1) There is a duty to act in a way that is procedurally fair, but the ambit of the duty was dependent on the circumstances.

(2) There is some obligation on the parties in an administrative process to engage with each other.

(3) The duty to act fairly can include a right to make representations post-decision.

(4) It may be sufficient to tell the party who is the subject of the decision the gist or essence of the information on which it is based.

[20] Looked at in the round, and over the relevant period of time, the respondents acted according to natural justice both in terms of their correspondence with the petitioners after the original decision in (a) offering an opportunity to meet, and, more importantly, (b) having disclosed the evidence in July 2008, which related to all the landings, but did not include all the evidence on all the landings, offering to consider the matter afresh. If the original decision had been modified in light of later representations by the petitioners, there would have been no breach of natural justice. In the event there had been no modification as there had been no request for modification from the petitioners. It was not accepted that the respondents would never have changed their decision had they been asked to do so.

Discussion and conclusion

[20] I think that, in considering the question whether the decision of 10 April 2007 (which I regard as the operative decision) was reached in breach of natural justice, it is first of all necessary to classify that decision. In my view it was plainly an administrative decision: it was not a judicial decision. That being so, the maxim nemo judex in causa sua does not apply. Nevertheless, the maxim audi alteram partem does apply, with the consequence that the respondents were under a duty to reach their decision fairly, and in the context of this case that meant following a fair procedure. It is not in dispute that the petitioners were not provided with the full evidence on which the decision was based, and so were not given an opportunity to comment on or contradict it, before the decision was made. In my view it follows inevitably from that that the decision was not reached in a fair manner. The failure of the respondents to give the petitioners the opportunity to see and challenge the evidence against them was to the material prejudice of the petitioners and in my view vitiates the decision reached. I see no relevant distinction between this case and Atlantean which would save the decision in this case. Indeed, I think it is correct to describe this case as being a fortiori of Atlantean as the respondents were in possession of all the relevant evidence, which the Irish Minister in Atlantean was not. Nor do I think that it was Irish constitutional justice, as opposed to natural justice, which was considered in that case amounts to a relevant distinction: Irish constitutional justice has been described as "the Irish reincarnation of natural justice" ((Human Rights in Ireland, www.humanrights.ie, January 2011). Moreover, I consider that the fact that there was a criminal investigation ongoing in the background in this case is wholly irrelevant. If the fact of an ongoing criminal investigation were a reason for a public authority being entitled to take a decision against a party without allowing the party to see and comment on the evidence against him it would be tantamount to permitting the decision-maker to reach a decision which was procedurally unfair. That cannot be right. The respondents were obliged to act fairly whether or not there were ongoing criminal proceedings. Further, I think it is no answer to the petitioners' complaint to say that the relevant evidence, or at least some of it, was disclosed to them after the decision was taken. Lord Mustill in Doody at p 560 said that fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result, or after it is taken, with a view to procuring its modification, or both. I very much doubt that allowing a person who may be adversely affected by a decision only the opportunity to make representations after it has been taken, with a view to procuring its modification satisfies the requirement of procedural fairness in modern administrative law. Once the decision has been taken the decision-maker has reached a conclusion and any attempt to make him change his mind is addressed to a person with a closed mind. Adapting the words of Clark J in Atlantean at para 4.13, this would involve the respondents saying to the petitioners: "We have decided that you are guilty. Prove that you are innocent." I am content to adopt his reasoning, which I have set out in full above at para [14] and to conclude that the decision of the respondents dated 10 April 2007 is vitiated by reason of procedural unfairness. Indeed, I regard the circumstances of this case as constituting a blatant breach of natural justice.

Ultra vires decision
Submission for the petitioners
[21] Section 57(2) of the Scotland Act 1998 provides that a member of the Scottish Executive (now Government) has no power to make any subordinate legislation, or to do any other act, so far as the legislation or act is incompatible with any of the Convention rights or with Community law. In this case the quota deductions were imposed on the petitioners in order to give effect to the UK's obligations under the regulations. Natural justice is a recognised principle of EU law. In Transocean Marine Paint Association v EC Commission [1974] CMLR 459, a competition case, the European Court of Justice stated at p 477, para [15} as follows:

"It is clear ... both from the nature and objective of the procedure for hearings ... that this regulation ... applies the general rule that a person whose interests are perceptibly affected by a decision taken by a public authority must be given the opportunity to make his point of view known. This rule requires that an undertaking be informed, in good time, of the essence of the conditions to which the Commission intends to subject an exemption and it must have the opportunity to submit its observations to the Commission. This is especially so in the case of conditions which, as in this case, impose considerable obligations having far-reaching effects. "

[22] Kustom Musical Amplification Inc v OHIM [2007] ETMR 1211 dealt with the attempt by the applicants to register as a three-dimensional Community trade mark a representation of the shape of the body of a guitar, known as a 'pointy guitar' in respect of the class of goods classified as 'stringed instruments, namely guitars'. The application was rejected by the examiner on the ground that the shape of the guitar was devoid of distinctive character. The appeal to the second Board of Appeal was dismissed on the basis that guitar players would be aware of a large number of models of guitar featuring similar-looking bodies and that, therefore, the shape of the guitar would not be regarded as indicative of origin, the mark applied for being not significantly different form other electric guitars. The shape of the guitar would, it was said, be perceived by guitarists as mere ornamentation. The relevant regulation provided that decisions of OHIM were to be based only on reasons or evidence on which the parties concerned had had an opportunity to present their comments. The Court of First Instance of the European Communities (Third Chamber) annulled the decision of the Board of Appeal because it took into account facts which had not been communicated to the applicants prior to the adoption of its decision. It stated as follows at p 1216, paras [26] and [27] and p 1220, para [55]:

"The general principle of protection of the right to defend oneself is enshrined in the law of Community trade marks by that provision ... According to that general principle of Community law, a person whose interests are appreciably affected by a decision taken by a public authority must be given the opportunity to make his point of view known ...

The right to be heard extends to all the factual and legal material which forms the basis of the decision, but not to the final position which the authority intends to adopt ...

Consequently, the court finds that the conclusion in the contested decision that the mark applied for should be rejected is based on facts which were not communicated to the applicant prior to the adoption of that decision. Therefore, the infringement of the applicant's right to be heard vitiates the very conclusion reached in the contested decision."

The decision in the present case breached the right to be heard, a fundamental principle of EU law, and was therefore ultra vires by reason of section 57(2) of the Scotland Act 1998.

Submission for the respondents

[23] The respondents did not dispute that there was a principle of procedural fairness in EU law, as set out in para [15] of the Transocean case. The use of the word "essence" in that case was reminiscent of the use of the word "gist" in the Doody case. How much information fell to be disclosed depended on the circumstances of each case. In Kustom the complaint made by the applicants was that the Board of Appeal had made extensive reference to internet sites without disclosing to the applicants the precise content of the pages relied upon. The provision of internet links in that case was different from what was disclosed in this case.

Discussion and conclusion

[24] The point raised under this head is in substance the same as that raised under the previous head of breach of natural justice. As I have already concluded that the decision was taken in a procedurally unfair manner and in breach of natural justice, it consequentially follows that it was taken in breach of EU law and section 57(2) of the Scotland Act 1988.

A1P1
Submission for the petitioner
[25] A1P1 of the ECHR provides:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

[26] The decision of 10 April 2007 amounted to an unlawful interference with the petitioners' possessions. The licence was a possession, a valuable asset and a means of earning a living. It attached to the vessel and was transferable. It increased the goodwill and market value of the vessel: a vessel with no licence was not allowed to fish. A vessel whose licence was for quota x had more goodwill and value than a vessel whose licence was for quota x-y. That being so, A1P1 was clearly engaged.

[27] In Tre TraktorerAktiebolag v Sweden [1989] 13 EHRR 309 the applicant company, which had had its licence to sell alcoholic beverages revoked by an administrative authority, complained to the European Court of Human Rights of a violation of A1P1. Although the court held on the facts that there had been no breach of A1P1, it did hold that A1P1 was engaged. It stated at para [53] of its judgement:

"The Government argued that a licence to serve alcoholic beverages could not be considered to be a 'possession' within the meaning of article 1 of the Protocol. This provision was therefore, in their opinion, not applicable to the case.

Like the Commission, however, the Court takes the view that the economic interests connected with the running of Le Cardinal were 'possessions' for the purposes of article 1 of the Protocol. Indeed, the Court has already found that the maintenance of the licence was one of the principal conditions for the carrying on of the applicant company's business, and that its withdrawal had adverse effects on the goodwill and value of the restaurant.

Such withdrawal thus constitutes, in the circumstances of the case, an interference with TTA's right to the 'peaceful enjoyment of [its] possessions' ".

The same applied to the circumstances of the present case.

[28] In R (Quark Fishing Ltd) v Foreign Secretary [2005] QB 93 the claimant company, which was registered in the Falkland Islands, was refused a licence to fish for the 2001 season, although it had been granted licences for the four previous seasons. An application for judicial review failed on the ground that the ambit of A1P1 did not extend to the Falkland Islands. Pill LJ stated at p 115, paras 62-64:

"62 The claimant's claim is based on refusal of the licence and reliance is placed on Tre Traktorer AB v Sweden (1989) 13 EHRR 309 where a licence to run a restaurant was withdrawn. On behalf of the Secretary of State it was submitted that there was no possession of a licence or entitlement to a licence in this case and Article 1 of the First Protocol does not extend to a hope or expectation of receiving a licence.

63 The judge held that it was arguable that 'to refuse a licence in circumstances where it has been awarded in past years and no relevant change of circumstances has occurred is to deprive the applicant of a possession'. The claimant relied on its strong expectation that, but for the unlawful instruction, it would have received a licence.

64 I agree with the judge that it would be inappropriate to strike out on this ground."

The present case was a far stronger one than that.

[29] In Crompton v Department of Transport [2003] RTR 34 the Court of Appeal held that a goods vehicle operator's licence was a possession for the purposes of A1P1.

[30] In R (New London College Ltd) v Home Secretary [2012] EWCA Civ 51 the Court of Appeal held that a student sponsor licence issued to the applicant college by the UK Border Agency was not a possession for the purposes of A1P1. At paras 94-96 Richards LJ stated:

"94 In my judgement Wyn Williams J was plainly correct to find that a sponsor licence is not itself a possession within the meaning of A1P1. ... A sponsor licence is not marketable or even transferrable, nor is it obtained at a market price. I reject Mr Gill's contention that on the sale of a business having the benefit of a licence there would in substance be transfer of the licence. The new owner would have to satisfy UKBA that the conditions for the grant of a licence were met under the new ownership.

95 The principal factor leading Wyn Williams J to find that the suspension and withdrawal of sponsor licence nevertheless engaged A1P1 was the apparent parallel with the withdrawal of the liquor licence in Tre Traktorer. There is obvious attraction in that line of reasoning, given the undoubted effect on the business in each case. The judge did not grapple, however, with the question whether the adverse effect in the present case amounts to an effect on goodwill, in the sense used in the authorities, or only to a loss of future income (albeit a loss with serious economic consequences to the business. I agree with Mr Palmer that he needed to do so. The distinction is far from clear, but one has to decide which side of the line the case falls, since the relevant possession is the goodwill of the business, and the suspension or withdrawal of a licence will not amount to an interference with the right to peaceful enjoyment of possessions within A1P1 unless it has an adverse effect on that goodwill.

96 Kenneth Parker J in R (Nichols) v Security Industry Authority [2007] 1 WLR 2067 was of the view that 'goodwill' in this context means the capitalised value of the business as a going concern. Mr Gill did not seek to challenge the correctness of that view.. Whilst there is evidence in this case of the economic disruption caused by the suspension of the college's licence, the evidence does not deal with the goodwill of the business in the sense identified in Nichols. Thus there is no concrete evidential basis on which to found a conclusion that the goodwill of the business has been or would be adversely affected by suspension or withdrawal of the licence. Nor, as it seems to me, can such an effect be inferred from the information available to us."

He went on to hold (at para 98), Rimer LJ and Mummery LJ concurring, that the college had failed to establish that the suspension or withdrawal of its sponsor licence amounted to an interference with its right to peaceful enjoyment of its possessions within A1P1 so as to require justification under that article. On 17 October 2012 the Supreme Court ordered that permission to appeal against the decision of the Court of Appeal be granted in part. The petitioners' primary position was that the New London College decision was wrong on the issue of a licence not being a possession, but, on the assumption that what the Court of Appeal held about goodwill in that case was correct, the decision was distinguishable from the facts of the present case as the licence in that case was non-transferable. In the present case the quota granted under the licence was capitalisable and therefore satisfied the New London College test for a possession.

[31] As A1P1 was engaged, the requirements set out by Lord Hope in Axa v Lord Advocate 2012 SC 122 at p 134, para [22] applied. His lordship there said:

"According to the jurisprudence of the Strasbourg court, A1P1 is in substance a guarantee of the right to property. It comprises three distinct rules ... The first is expressed in the first sentence of the first paragraph, and it is of a general nature. It lays down the general principle of the peaceful enjoyment of property. The second is expressed in the second sentence of the same paragraph. It deals with deprivation of property, which it subjects to the conditions to which that sentence refers. 'Law' in that sentence is to be understood in the autonomous sense that it has throughout the Convention. To be 'law' for this purpose, the provision must be accessible, clearly expressed and not arbitrary. The third is set out in the second paragraph. It recognises that the Contracting States are entitled, among other things, to control the use of the property in the general interest and to secure the payment of taxes or other contributions or penalties"

In the present case the decision had been arrived at in breach of natural justice and therefore ex hypothesi did not comply with the requirement of lawfulness (Lord Reed in Axa at p 159, para [108] and p 162, para [116]). If A1P1 applied to the present case questions of legitimate aim or proportionality did not arise for consideration as any attempt to justify interference stalled on the blocks for want of the requirement of lawfulness.

Submission for the respondents

[32] It was submitted for the respondents that A1P1 was not engaged as the decision complained of did not interfere with the property rights of the petitioners. What was imposed by the decision was a payback of quotas as derived from the tonnages. In no sense was a revocation of the petitioners' licence being proposed. The quotas themselves should not be regarded as possessions for the purposes of A1P1. Neither the quota allocations nor the licence allowing the allocations could be said to give the petitioners enforceable claims to quotas of a certain amount. The reduction of quotas did not constitute an interference with possessions. A1P1 did not protect an expected stream of future income, as explained in the New London College case. The licence in this case was not a possession: it might generate future cash flows and have a value to the petitioners, allowing them to carry on licensable activity, but it did not represent an asset with monetary value: it affected only future income stream. It was for the member states to determine the method of allocation of quotas at a national level. The legislative scheme at EU level conferred no quota entitlement on any vessel. No rule of EU or domestic law recognised any independent right to enjoyment of a certain quota. Quotas were decided annually. The petitioners had no independent right to any retention of quota or any fixed proportion of the UK's allocation and no guarantee that a precise quota would be allocated. A fixed quota allocation (FQA) was given to member states. While there may be an expectation that the same quota would continue to be allocated, there was no right to any quota.

[33] The following four points could be made on the subject of allocations:

(1) Allocation of quotas was at the discretion of the member state and no person had an entitlement to any particular quota. A quota should therefore not be seen as a pre-existing possession.

(2) The future allocation of quotas was quintessentially a future income stream.

(3) Even if there was an expectation of a future allocation of certain quota, that expectation was not legally enforceable.

(4) Any expectation of future quota or income therefrom was not a possession protected by A1P1.

If A1P1 was not engaged the principle of lawfulness did not require to be dealt with. If it did apply to the circumstances of the present case any interference was justified and proportionate in the context of the general aims of the CFP and the UK's specific responsibilities under the relevant regulations.

Discussion and conclusion

[34] The first pre-requisite for the application of A1P1 is that a possession is involved. Had this case related to the suspension or revocation of a licence during its currency, I would have been satisfied that a possession was involved: Tre Traktorer Aktiebolag. The present case is not of that sort: it involves the terms of the licence set by the licensing authority. In my view the averment by the petitioners in statement 13 of the petition that "the effect of the respondents' decision was to reduce the fishing quota available to the petitioners for the years 2007 to 2012 and thereby to interfere with the petitioners' enjoyment of their licence" is misconceived and wrong. The petitioners had no legal right to any particular future quota in a licence granted to them by the respondents. I am satisfied that on this point the submission for the respondents is well-founded. I therefore conclude that A1P1 was not engaged. (Had it been engaged, I would have concluded that the requirement of lawfulness had not been satisfied and that there had been a breach of A1P1.)

Decision

[35] As I am satisfied, for the reasons set out above, that the decision of 10 April 2007 was taken in a manner contrary to natural justice and in breach of section 57(2) of the Scotland Act 1998 I shall reduce it. As the petitioners also seek damages from the respondents for breach of section 57(2) of the Scotland Act 1998 I shall appoint the proceedings to call by order, on a date to be fixed, for determination of further procedure.