Smith International Inc v Specialised Petroleum Services Group Ltd.

This is the ruling of the court on a preliminary point relating to “second appeals” to the Court of Appeal.

Smith International Inc (Smith) wish to appeal from the order made by Lewison J on 21 April 2005. He allowed an appeal by Specialised Petroleum Services Group Limited against the decision by the Hearing Officer (Mr MP Hayward) on behalf of the Patent Office Comptroller on 1 December 2004. The judge set aside the Hearing Officer’s order that the proposed claim 1 in UK Patent 2,335,687 (apparatus for catching debris in a well bore) was invalid for lack of novelty.

Smith did not make an application to Lewison J for permission to appeal. They applied to this court for permission to appeal.

The procedural point, which was argued at an inter partes hearing before the full court, is whether the “second appeals” provisions introduced by section 55 of the Access to Justice Act 1999 (the 1999 Act) and CPR Part 52.13 now apply to the proposed appeal in this case; or whether the particular appeal provisions enacted in section 97(3) of the Patents Act 1977 (the 1977 Act) still apply.

If the second appeals provisions apply, Smith must show that the proposed appeal raises an important point of principle or practice or that there is a compelling reason for granting permission. If they do not apply, the Court of Appeal may grant permission to appeal under section 97(3) of the 1977 Act and in accordance CPR 52.3, if it considers that the appeal has a real prospect of success or that there is some other compelling reason why the appeal should be heard.

After hearing full argument on this point our conclusions are that (1) the second appeals provisions in section 55 and CPR Part 52.13 do not apply appeals under section 97(3) of the 1977 Act; (2) Smith’s proposed appeal has a real prospect of success on the basis of the submissions in Smith’s skeleton argument dated 18 April 2005; and (3) we should grant permission to appeal.

The reasons for our ruling on the procedural point are set out below.

Appeals from the Comptroller of Patents received specific legislative treatment in section 97 of the 1977 Act-

“(3)

An appeal shall not lie to the Court of Appeal on appeal from a decision of the Patents Court on appeal from a decision of the comptroller under this Act or rules-

(a)

except where the comptroller’s decision was given under section 8,12,18,20,27,37,40,61,72,73,or 75 above; or

(b)

except where the ground of appeal is that the decision of the Patents Court is wrong in law;

but an appeal shall only lie to the Court of Appeal under this section if leave to appeal is given by the Patents Court or the Court of Appeal.”

It is common ground that Smith’s proposed appeal falls within both of the exceptions to the general prohibition on appeals to the Court of Appeal from the Patents Court on appeal from a decision of the comptroller: it falls within (a), as the comptroller’s decision was given under section 72 and it falls within (b), as Smith’s case is that the decision of Lewison J sitting in the Patents Court was wrong in law as he misconstrued the patent in suit and /or the prior art.

Under section 97(3) permission to appeal is not, in contrast to section 55, exclusively a matter for the Court of Appeal: permission to appeal may be given by the Patents Court. Section 97(3) continues to apply to this case, unless it has been repealed or amended by a later Act of Parliament. It has not been expressly repealed or amended by section 55 of the 1999 Act or by any other Act of Parliament. The critical question is whether it has been impliedly repealed, or whether its scope has in some other way been limited, by section 55 of the 1999 Act, under which permission for a second appeal may only be given by the Court of Appeal and subject to the satisfaction of special stringent requirements for the grant of such permission.

Section 55, which was implemented in CPR 52.13, provides that-

“(1)

Where an appeal is made to a county court or the High Court in relation to any matter, and on hearing the appeal the court makes a decision in relation to that matter, no appeal may be made to the Court of Appeal from that decision unless the Court of Appeal considers that-

(a)

the appeal would raise an important point of principle or practice, or

(b)

there is some other compelling reason for the Court of Appeal to hear it.”

Section 55 is in wide general terms. At first sight it would appear to catch this case, as there was an appeal to the High Court and the High Court made a decision in relation to the matter. Indeed, Smith’s initial skeleton argument in support of the application for permission to appeal asserted that this was a “second appeal” to which CPR Rule 52.13 applied and submitted that its requirements were satisfied.

In our judgment, however, section 55 has not impliedly repealed or amended the earlier section 97(3) or otherwise limited its scope. This is a case in which Parliament clearly made specific provision for patent appeals to the Patents Court, which is part of the High Court, and from the Patents Court to the Court of Appeal. The section confers power on the Patents Court to grant permission to appeal to the Court of Appeal. An appeal from the Patents Court is not dependent on the grant of permission by the Court of Appeal or subject to satisfaction of the requirement applicable to applications to the Court of Appeal for permission to appeal.

The effect of applying to this case the general requirements of section 55 for second appeals to the Court of Appeal would be either to cancel or to render meaningless the power of the Patents Court under section 97(3) to grant permission to appeal to the Court of Appeal. As appears from Halsbury’s Laws (4^th ed) vol 44 para 968 it is difficult to imply a legislative intention to repeal an earlier enactment (section 97(3)) which is particular, where the later (section 55) is general in nature.

In the present case any doubts we may have had on the point have been removed by the fact that in the 1999 Act (Schedule 15 Part III) Parliament expressly repealed a similar particular provision in order to apply the new regime to a second appeal to the Court of Appeal. Section 42(3) of the Courts and Legal Services Act 1990 provided, in the case of an appeal from a tribunal (in that case the Conveyancing Appeals Tribunal) to the High Court, for an appeal to the Court of Appeal. The appeal could be with the permission of either the High Court or of the Court of Appeal. That provision was expressly repealed by the 1999 Act. It would have been unnecessary to repeal the particular provision if section 55 had, as a result of its general terms, impliedly repealed, amended or limited the scope of the particular provisions under which the High Court could, having heard and decided an appeal from the Conveyancing Appeals Tribunal, itself grant permission to appeal to the Court of Appeal.

We are also unable to accept an alternative submission that the effect of section 55 was to superimpose on section 97(3) an additional requirement that the permission of the Court of Appeal had to be obtained in accordance with CPR 52.13, even in a case where the High Court, which heard the first appeal, had already granted permission to appeal to the Court of Appeal. That interpretation of section 55 would effectively deprive the High Court of the power conferred by section 97(3) to grant permission to appeal to the Court of Appeal. A permission, which it had jurisdiction to grant, would have no real content or meaning. It would not be an effective “permission to appeal” at all, if the applicant for permission also had to obtain from the Court of Appeal a second permission, which could only be given by the Court of Appeal if the more stringent requirements for granting permission to appeal were satisfied. The consequence would be that the losing party on the appeal to the High Court would be deprived of the right to seek and obtain permission from the High Court in order to appeal to the Court of Appeal. Clear words would be required to produce such a result.

Our conclusions on the interpretation of section 55 are supported by the reasoning in the majority judgments of this court in Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester) Ltd [2001] QB 388. That was a decision on appeals under section 69(8) of the Arbitration Act 1996 from the High Court to the Court of Appeal in respect of an arbitration award. Only the High Court can give permission to appeal under section 69(8). The Court of Appeal cannot give permission to appeal or review the refusal of the High Court to give permission: see also Athletic Union of Constantinople v. National Basketball Association (No 2) [2002] 1 WLR 2863 at 2868, paragraph 12(5), another case under the Arbitration Act 1996. As the Court of Appeal had no power to give permission, there was no scope at all for the application of section 55. It is not therefore surprising that the Court of Appeal rejected the contentions that section 55 impliedly repealed the provisions regarding appeals under the Arbitration Act 1996. The majority also rejected the submission that section 55 imposed an additional requirement to obtain the permission of the Court of Appeal where the court hearing the appeal from the arbitrator had already given permission to appeal to the Court of Appeal. In his judgment at p 401 Waller LJ observed that section 97(3) of the 1977 Act and a number of other similar provisions concerning appeals where the first tier decision was not that of a court had not been expressly repealed by the 1999 Act.

Mr Guy Burkill QC appearing for the respondent to the application sought to distinguish this case from the cases under the Arbitration Act on the ground that the reasoning and the result in them were limited to cases in which permission to appeal could only be given by the High Court and the Court of Appeal had no jurisdiction to grant permission. In the present case he argued that there was no inconsistency between section 97(3) of the 1997 Act and section 55 of the 1999 Act. They could stand together as the only effect of section 55, he submitted, was to increase the height of an existing hurdle in section 97(3), which has to be overcome in order to obtain permission to appeal, not to introduce a new hurdle.

We agree that the difference between the provisions stating who can give permission to appeal makes the cases on the Arbitration Act distinguishable and the general points made in Henry Boot about implied repeals obiter. However, the general principles regarding implied repeal discussed in the judgments in Henry Boot at 401H to 403D remain valid. It is by the application of those principles that we have reached the conclusion that section 97(3) is a specific procedure laid down by Parliament for patent appeals under a particular Act and that the section has not been expressly repealed or impliedly repealed by the general words of section 55 concerning second appeals to the Court of Appeal. (As explained below the position has been held to be different in respect of appeals on points of law from certain tribunals falling under the general provisions of section 11 of the Tribunals and Inquiries Act 1992 concerning appeals from tribunals).

The result is not inconsistent with the recommendations of the Bowman Report to the Lord Chancellor on the Review of the Court of Appeal (September 1997) which led to the introduction in the 1999 Act of a regime for second appeals. It is true that the policy of section 55 was to make second appeals to the Court of Appeal from the county court and from the High court “a rarity” in the future (see Tanfern v. Cameron-Macdonald [2000] 1 WLR 1311 at paragraph 45), but the Bowman Report did not make recommendations for changes regarding appeals from all tribunals, the structure of which it regarded as “extremely complex and diverse” with different procedures for appealing from different tribunals: see paragraphs 15 and 16 in Ch 2 and paragraphs 54 to 59 of Ch 4, where it recommended that the tribunal structure be examined in detail with a view to bringing the arrangements for appeals in line with the principles recommended for the civil appeals system .

As some of the authorities cited to the court related to appeals from certain tribunals, we should mention the case of second appeals on points of law by a party to proceedings before certain tribunals governed by the general provisions in section 11 of the Tribunals and Inquiries Act 1992 (the 1992 Act). The tribunals affected are those specified in section 11(1) (as amended) by reference to numbered paragraphs of Schedule 1 to the 1992 Act. Appeals from the comptroller of patents are not so specified and are not therefore brought under section 11, but cases on section 11 were nevertheless cited in argument for the general statements made in them.

The most important case cited was McNicholas Construction Co Ltd v. Customs & Excise Comrs [2001] 1 WLR 17, where it is reported together with Clerk v. Perks. It was a decision of this court concerning a VAT appeal to the Court of Appeal. The first appeal was heard in the High Court. Dyson J dismissed an appeal from a VAT tribunal, which is a tribunal specified in section 11 of the 1992 Act: see paragraph 44 of Schedule 1. Brooke LJ giving the judgment of the court, said-

“37.

The appeal to the High Court lay pursuant to section 11 of and paragraph 44 of Schedule 1 to the Tribunals and Inquiries Act 1992. A further appeal to this court would therefore be governed by section 55 of the 1999 Act and the procedure for granting permission to appeal governed by CPR r52.13. Although Dyson J purported to give permission to appeal, his grant of permission was a nullity because only the Court of Appeal can give permission for second appeals.”

Although Henry Boot was not a case of an appeal from a tribunal, it was cited in McNicholas (see paragraph 22) without any discussion or disapproval of the judgments on the express and implied repeal points. The Court of Appeal in McNicholas simplytreated the general provisions of section 55 as applying to and affecting the scope of the general provisions of section 11, in particular subsection (5), under which an appeal to the Court of Appeal may not be brought by virtue of section 11 except with the leave of the High Court or the Court of Appeal. Brooke LJ said, having set out section 55 and having referred to CPR Pt 52,-

“12.

It follows that the new procedural regime applies as much in relation to the handling of appeals to the courts from tribunals or otherpersons or bodies,[emphasis added] as it does in relation to appeals from a lower court or a high court in the ordinary sense of those words. Furthermore, throughout Part 52 the word “appeal” includes an appeal by way of case stated: see rule 52.1(3)(a).

13.

For the purposes of section 55 of the 1999 Act, the following appeals are to be treated as appeals to a county court or the High Court within the meaning of that section: (i) an appeal to the High Court on a point of law pursuant to section 11 of the Tribunals and Inquiries Act 1992 from a tribunal specified in the paragraphs of Schedule 1 to that Act mentioned in that section; ….and (iv) any other appeal to the High Court or a county court from any tribunal or other body or person.[emphasis added]

14.

….

15.

It follows that an appeal from a decision of the High Court or of a county court in any of these cases is to be treated as a second appeal for the purposes of section 55 of the 1999 Act. By CPR r 52.13(1) only the Court of Appeal can give permission for a second appeal and, before it can do so, it must be satisfied that one or other of the tests mentioned in section 55 have been met: see rule 52.13(2). If a judge of the lower court, whether the county court or the High Court, purports to grant permission for a second appeal, that grant of permission is a nullity.”

Nothing we have decided in this case can affect the ruling in McNicholas relating toappeals from High Court decisions on appeals from the VAT Tribunal or other tribunals pursuant to section 11 of the 1992 Act. They are all second appeals for the purposes of CPR Pt 52: see paragraph 41 of McNicholas.

This is not, as explained above, an appeal from a tribunal to which section 11 applies. Nor were particular appeals from the Conveyancing Appeals Tribunal which, as mentioned earlier, were subject to the provisions in the 1990 Act expressly repealed by the 1999 Act.

The broad statements in paragraphs 12 and 13(iv) of the judgment of Brooke LJ clearly cover cases where general appeal procedures contained in earlier Acts of Parliament, such as section 11(5) of the 1992 Act, have been expressly or impliedly repealed or amended by section 55. For the reasons given above, however, there has been no express or implied repeal or amendment of the particular appeal procedure specified in section 97(3) of the 1977 Act.

It is therefore unnecessary to consider whether the proposed appeal raises an important point of principle or practice. The application for permission to appeal is granted on the basis that the proposed appeal has a real prospect of success.