Nabadda & Ors v City Of Westminster & Ors,  EWCA Civ 29 (3 February) (Court of Appeal 2000)
Case No: CCRTF/99/0945/6/7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LONDON COUNTY COURT
His Honour Judge Cowell
Royal Courts of Justice
Strand, London, WC2A 2LL
Thursday, 3rd February 2000
B e f o r e :
LORD JUSTICE PETER GIBSON
LORD JUSTICE WALLER
LORD JUSTICE BUXTON
NABADDA & OTHERS
- and -
CITY OF WESTMINSTER & OTHERS
(Transcript of the Handed Down Judgment of
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Mr. Robin Allen Q.C. and Mr. Tim Eicke (instructed by Messrs. Luqmani Thompson & Partners of Wood Green for the Appellants)
Mr. Nigel Giffin (instructed by the Solicitor of Westminster City Council) and
Miss Jenni Richards (instructed by the Solicitor for the London Borough of Haringey) for the Respondents)
As Approved by the Court
Crown Copyright ©
Thursday, 3rd February 2000
LORD JUSTICE BUXTON:
1. In these proceedings four Swedish nationals, currently students in the UK, sue two local authorities, Westminster and Haringey. The four students have identical interests, as do the two authorities.
2. The students are pursuing a variety of courses which do not need to be described further. Each of the students has for the purposes of their course both a grant and a loan from a Swedish organisation, shortly called SNB. Each of the students applied to the relevant English local authority for what is conveniently called a "fees only" award: that is, an award not in relation to their maintenance, but in order to defray the costs of their education. That award is a "mandatory" award: meaning that, if the student fulfils the qualifications laid down in the subordinate legislation creating the award, the local authority is obliged by that legislation to make the award.
3. The relevant legislation in this case is the Education (Mandatory Awards) Regulations 1997. The crucial regulation for this case is regulation 23, which provides that a qualifying student shall not receive an award if he receives from other sources any scholarship or similar award equalling the amount of his fees. There is not to be taken into account in that process of calculation any award or loan made under various English statutes. The authorities both took the view that that required them to take into account the SNB loans: with the result that the students received less than a full award. In so determining, the authorities acted on the regulations as they stood in 1997. The regulations were significantly amended in 1998 to add to the "exempted" loans or awards any award made under legislation of any other member state of the Community. An explanatory note to the amending regulations said that the change had been made in order to avoid discrimination against students supported by other member states.
4. As a direct result of that change, all of the students were informed in February 1998 that they would receive a full award for that and any subsequent years of their studies. Two of them had commenced judicial review proceedings in relation to the authorities' earlier decision, but those proceedings were necessarily and properly abandoned. With the students having received full grants, and it being provided by the regulations that anyone in their position was entitled to such a grant, that might have been thought to be the end of it so far as the law was concerned. In these proceedings, however, the students seek damages in respect of the initial refusal of a grant, though only in terms of damages for injury to their feelings. For instance, in paragraph 13 of the particulars of claim filed by Miss Nabadda, the particulars of damage are said to "include" injury to feelings, but all the particulars in fact relate to that latter head and no other.
The claims and the proceedings
5. The authorities have brought third party proceedings against the Secretary of State asserting that in originally withholding the awards they were doing no more than acting in obedience to his directions in the regulations. Accordingly, if that act exposes them to liability, the Secretary of State should indemnify them. In the court below the Secretary of State sought to meet this claim by inviting the judge to hold, on a preliminary point of law, that it had been open to the authorities to make the awards despite the terms of the regulations. The judge rejected that argument in a cogent and wholly convincing judgment. The Secretary of State entered a notice of appeal against the judge's ruling, but the appeal was, prudently, withdrawn shortly before the hearing before us. I need therefore say no more directly about this aspect of the matter; though the relationship between the national government and the authorities will re-emerge at a later stage of this judgment.
6. I turn to the students' claim against the authorities. The legal basis of that damages claim is as follows. Although education as such does not come within the competence of the institutions of the EU, vocational training does so, as an adjunct to the EU provisions on freedom of movement of workers: see Case 152/82  ECR 2323 (Forcheri v Belgium). Provisions for access to such training are therefore governed by the prohibition on discrimination on grounds of nationality contained in article 6 of the Treaty of Rome (now article 12 of the Consolidated Treaty). For the purpose of the present applications it is assumed, though very emphatically not conceded, that the students' courses consisted of vocational training. On that basis, the authorities concede that the witholding of the grant because of the SNB loan constituted discrimination contrary to the terms of article 6. Such discrimination was what, in English terms, would be characterised as indirect: that is to say, that the students were not refused the grant because they were Swedish, but because they were subject to a condition that, although not confined to Swedish persons (because it would appear that a person of another nationality living in Sweden would be eligible for an SNB loan), was plainly much more likely to affect Swedish nationals than nationals of other EU countries.
7. So far so good. The next and crucial step in the students' case is, however, that they are by reason of such discrimination entitled to damages within the English system under the Race Relations Act 1976 [the 1976 Act]. To the extent that (as is the case) certain provisions of the 1976 Act stand in the way of granting the remedy sought in this case in respect of the breach of article 6, those provisions must be disapplied or ignored, in deference to the primacy of Community law. As it was put in the students' skeleton argument before this court:
Parliament has chosen the Race Relations Act 1976 as the mechanism by which acts of discrimination on grounds of nationality including discrimination contrary to Community Law are to be remedied and...any provision of domestic law which is inconsistent with directly enforceable Community Law rights must be disapplied.
8. The 1976 Act in its relationship to Community law is thus crucial to this case. It is important also at this stage to note that the claim is deliberately not made under what might be called the general mechanisms required of national law for recovery of reparation for breaches of directly effective Community provisions that have been recognised by the Court of Justice, in such cases as Case C6-90  ECR I-5347 (Francovich) and Case C-46/93  ECR I-1631 (Brasserie du Pêcheur). The most convenient summary of that jurisprudence is to be found in the most recent case in the Court of Justice, Case C-127/97  ECR I-1531 (Norbrook), at paragraphs 106-107 of the judgment. I shall refer to the relief envisaged by that jurisprudence as Norbrook damages. To ground recovery for such damages it has to be established, inter alia, that the breach of Community law was "sufficiently serious" to justify a claim for compensation. No such allegation is made in this case.
9. The formulation of the damages claim in terms of the 1976 Act gives rise to a series of issues. The proceedings in the court below took the form of the investigation of a list of preliminary questions agreed by the parties, which were intended to illuminate those issues. Whilst readily acknowledging how very much easier it is to see how a case can be shortened and clarified after rather than before it has been argued, I nonetheless consider that the question paper put before the judge was unnecessarily elaborate, and in some respects did not accurately isolate the matters in dispute. That feeling is reinforced by the fact that in both written and oral argument before this court the questions were largely abandoned, in favour of an investigation of the essential issues to which, it can now be seen, the case gives rise. The judge did conscientiously address and answer each question, but again, significantly, not in the forefront of his judgment, but in the course of a judgment that addressed the issues in general terms. That judgment, if I may say so, was a realistic and careful survey of an unfamiliar subject-matter, which subject-matter was before the judge perhaps made to seem more complicated than it in fact is. In what follows I shall address the issues as they emerged in this court, rather than the preliminary questions as such. I trust that in so doing I shall not be thought to intend any discourtesy to the judge, with whose conclusions on the substance and outcome of the case I largely agree.
The rules of Community law on reparation
10. In some instances provisions of Community law, notably Directives, contain requirements as to the penalties or compensation to be provided by member states in the event of breach of the transposing provisions in the national legal order. Damages provided for by such provisions are sui generis in Community law and are governed by rules different from those applying to Norbrook damages: see the observations of this court in Matra Communications v The Home Office  1 WLR 1646 at p1655B-D. Where such requirements are contained in a Directive, their meaning and effect, and the obligation that they impose on the member state, are a question of interpretation of the Directive: see for instance Case C-271/91  ECR I-4367 (Marshall). However, where, as will be the case with articles of the Treaty, such as article 6 in our case, no specific provisions exist in respect of reparation, then the claimant for damages rather than for a purely public law remedy must rely in the national legal order on the jurisprudence of Norbrook.
The claim made in this case
11. It will be apparent that the claim made in this case falls under neither of those two categories of entitlement to damages. Mr Allen QC however justified recourse to the 1976 Act, and then the removal from the provisions of that Act of anything that would inhibit a claim based on Community law, by arguing that there was a third principle of Community law, that the national legal order was obliged to adopt. Although the argument was not put in quite this way, it amounted to saying that the court should characterise the Community claim in terms that approached as close as possible to a type of liability to be found in domestic law, and then apply to that claim the provisions for relief provided for that domestic claim. Thus, the students' claim was in respect of discrimination on grounds of nationality by a local education authority: such as is prohibited in domestic law by a combination of sections 3(1) and 18 of the 1976 Act.
12. This argument at one stage was advanced, as in the extract from the students' skeleton cited above, as if it depended on, or could be elicited from, a specific decision on the part of Parliament to provide a remedy for discrimination on grounds of nationality that comprehended discrimination in Community as well as in domestic law. Such a characterisation of the 1976 Act is however unsustainable, and was not persisted in. Whilst it is correct that Section 3(1) of the 1976 Act repeated the definition of "racial grounds" in section 1(1) of the Race Relations Act 1968, but with the addition of the word "nationality", that was not done with article 6 in mind. Rather, it was generally understood at the time of the 1976 Act that that addition was made to offset the effect of the decision of the House of Lords in Ealing LBC v Race Relations Board  AC 342, that "national" in the expression "national origins" meant national in the sense of race and not of citizenship: with the inconveniences for the effective control of discrimination that were pointed out by Lord Kilbrandon in his dissenting speech in that case. I understood Mr Allen to agree, in broad terms, that that was so. And had Parliament decided, in this case, to make specific provision for one Community liability, under article 6, despite having made full and necessary provision for the discharge of Community obligations in the European Communities Act 1972, it is very unlikely that it would have done so through the medium of an Act that covers a very wide range of acts and offences that have nothing to do with Community law.
13. Rather than rely on anything specific in the nature of the 1976 Act, or in the intentions of the legislature in passing it, therefore, the proposition was advanced in much broader terms: that where there happened to be, in the national legal order, provisions addressing a case that could be characterised in the same terms as the Community claim, those provisions must be applied to the Community claim in preference to the Norbrook jurisprudence. The latter was merely a fall-back or reserve provision, to be resorted to only where there was no specific remedy of the type just described provided by national law.
14. I do not find it easy to address this argument, because it has no basis whatsoever in authority or in general jurisprudence. As Mr Giffin for Westminster pertinently remarked, it is difficult to see what the agonised debate about the availability of damages for breaches of provisions of the EU treaty, which started in this court in Bourgoin SA v Ministry of Agriculture  QB 716 and continued both in this country and in the Court of Justice in the Factortame litigation, was all about if the simple solution now proposed was all the time available. Nor is it possible to reconcile the argument with recognised principles of Community law.
15. It has long been trite law that in the absence of any specific Community rules it is for the national legal order of each member state to formulate rules for the assertion of directly effective Community rights, provided that those rules are not less favourable than those governing the same right of action on an internal matter. The foregoing is effectively a quotation from the judgment of the Court of Justice in Case 45/76  ECR 2043 (Comet). Mr Allen said that his case was consistent with, indeed relied on, the jurisprudence in Comet. That jurisprudence is emphatic in not requiring the national legal order to provide a remedy for breach of a Community provision that is more favourable than the remedy available for an equivalent breach of domestic law. But the students' case requires this court to do exactly that. They argue that the 1976 Act has to be applied to the Community claim shorn of terms that make that Community claim inadmissible: inadmissible not because it is a Community claim, but because it does not fulfil requirements imposed in the case of domestic claims. That is quite inconsistent with the jurisprudence established in Comet and other cases.
16. In my judgement, therefore, the claim made under the 1976 Act fails in limine. No such third principle as contended for by Mr Allen exists, and there is therefore no basis for bringing the claim under the 1976 Act, and much less for requiring the 1976 Act to be applied in an amended form in order to accommodate the claim. That conclusion can be supported, or further expounded, by reference to other aspects of the case. Of these, the most prominent is the impact of section 41 of the 1976 Act.
Section 41 of the 1976 Act
17. Section 41 exempts from liability for discrimination under the 1976 Act anything done, inter alia, in pursuance of any enactment, Order in Council or instrument made under any enactment by a Minister of the Crown. Regulation 23 was such an instrument, and is relied on as such by the authorities.
18. It is easy to see why section 41 was enacted. Acts done in pursuit of policies approved, either at first or at second hand, by Parliament are not to be proceeded against as discriminatory, even if they are in fact such. It will be immediately seen that this is another clear reason why the 1976 Act is inept as an instrument to enforce Community law. Breaches of Community law are not excused or exempted simply on the ground that they are committed by the national government of a member state, or simply because they have legislative approval. That, amongst other things, was decided by the Factortame litigation. But if the 1976 Act were indeed the chosen instrument for the enforcement of breaches of article 6, it could nonetheless not be deployed against breaches committed by the national government, as I understood Mr Allen to accept. As Miss Richards pointed out in an intervention that was as effective as it was economical, it is therefore the singular result of the students' argument that a legislative act could only be the subject of a damages claim if it met the Norbrook criterion of sufficiently serious breach: whereas the authorities, by acting in obedience to that legislation, make themselves subject to liability free of any such limitation.
19. The significance of section 41 is however not only for the further light that it sheds on the appellants' basic position, but also more directly because the authorities contend that section 41 provides them with a complete defence to the claims. Mr Allen sought to meet that contention by two arguments.
20. The first was that by normal principles of Community law any provision in national legislation that was inconsistent with Community law must be ignored or disapplied. Section 41 fell into that category precisely because it had the effect of depriving the students of the remedy that they sought for a breach of article 6. This argument is difficult to grapple with, because it depends on the assumption that Community law does have a legitimate interest in the terms and operation of the 1976 Act: an assumption that, as I have already demonstrated, is unfounded. One may, however, add that the rules of Community law relied on for this purpose (e.g. in Case 106/77  ECR 629 - (Simmenthal)) have been concerned with national provisions affecting the substantive application of Community law, rather than with reparation for breaches of that substantive law. The reason for that is not far to seek. The relationship between Community and national law in respect of damages is governed by the specific jurisprudence set out earlier in this judgment. That jurisprudence applies to the national legal order directly, and not through the medium of national provisions drawn for different purposes.
21. This aspect of Mr Allen's argument was put to the judge, and rightly rejected by him. Mr Allen's second riposte to the authorities' reliance on section 41 was not advanced below, and was not to be found in his skeleton argument. It was that section 41 must be read as only protecting a person who acts lawfully in pursuance of an enactment, etc. The regulations being, as was admitted, unlawful in the sense of being in breach of article 6, the authorities when acting in pursuit of them could not be acting under section 41, and therefore were not protected by it.
22. Mr Giffin did not seek any indulgence in order to meet this new point, but resourcefully adduced six reasons why the argument was wrong. It is only necessary to mention the essential elements in this submission. First, the construction, depriving the authorities of protection if the legislation under which they acted was in fact unlawful, breached both the literal wording of the provision and the general expectation of English law. Second, there was nothing in Community law that rendered section 41 invalid. Community law only required the national legal order to provide adequate remedies for a breach of a Community provision. The English system, including section 41, still provided the remedies of judicial review, and of Norbrook damages, albeit in the latter case against the national government. It was of no concern to Community law which organ of the state was held liable, provided that reparation in Norbrook terms was available somewhere within the national legal order: see Case C-302/97, Konle, at paragraph 63 of the judgment of the Court of Justice. And it was for the national legal order to decide which heads of damage (including, in this case, damages for injury to feelings) were recoverable: Case C-46/93  ECR I-1631 (Brasserie du Pêcheur), at paragraph 88 of the judgment of the Court of Justice.
23. Those submissions are, in my view, entirely well-founded. They reinforce the conclusion already reached that the appellants' contentions are misconceived.
Disposal of the appeal
24. In dismissing the appeal for the reasons set out above it is necessary to do no more than declare that the acts of discrimination alleged in the various Particulars of Claim were by reason of the provisions of section 41(1)(b) of the Race Relations Act 1976 not unlawful. If my Lords are of the same opinion, that finding also has the effect of disposing of the various actions, which make claims only under the 1976 Act and not in Norbrook terms: understandably in the latter instance in view of the need to establish that the breach was sufficiently serious; the substantial doubt as to whether such damages can be sought in the English courts for injury to feelings; and serious difficulty as to whether university courses such as those pursued by the students qualify as vocational training for the purposes of Community law: as to which see Case 293/83  ECR 606 (Gravier); Case 293/85  ECR 305, in the observations of Advocate-General Sir Gordon Slynn at pages 335-336 of the report; and R v ILEA ex p Hinde  1 CMLR 716 (university law degree not vocational training). In the event, however, we do not interfere with the judge's order that the actions be dismissed.
LORD JUSTICE WALLER:
25. I agree
LORD JUSTICE PETER GIBSON:
26. I also agree.
Order: Appeal dismissed. Costs of the first and second respondent to be paid by the Legal Aid Board under section 18, the appellant's contributions to be assessed as nil unless informed otherwise by Monday 7 February 2000 (according to counsel's understanding). Costs incurred by reason of the third party's respondent's notice to be paid by the third part. Permission to appeal to the House of Lords refused.
(Order does not form part of approved judgment.)