Budimir & Anor, R. v (Rev 1)

These otherwise unconnected applications question the enforceability of a properly enacted Act of Parliament, the Video Recordings Act 1984 (“the 1984 Act”).

The contentions advanced on behalf of the applicants by Lord Pannick QC and Mr Nigel Peters QC involve the seemingly startling proposition that, notwithstanding the respective applicants’ undoubted guilt, a conviction recorded on the basis of a statute enacted by our sovereign Parliament must be quashed because of an adventitious failure by the United Kingdom Government, before its enactment, to comply with a Directive from the European Community (the Technical Standards Directive, Directive 83/189 EEC (“the Directive”)). For A.V. Dicey, and generations not only of judges and lawyers, but the community at large, such a proposition would have appeared to be a constitutional impossibility. Among very many extracts from his An Invitation to the Study of Law of the Constitution (6^th edition 1902), the principle is perhaps best encapsulated at page 38:

“The principle then of Parliamentary sovereignty may, looked at from its positive side, be thus described: Any Act of Parliament, or any part of an Act of Parliament, which makes a new law…will be obeyed by the Courts. The same principle, looked at from its negative side may be thus stated : There is no person or body of persons who can, under the English Constitution, make rules which override or derogate from an Act of Parliament ….”

Later, at page 87, identifying what he described as three traits of Parliamentary sovereignty, Dicey spoke of the

“Non existence of any judicial or other authority having the right to nullify an Act of Parliament, or to treat it as void or unconstitutional.”

Faced with the submissions advanced on behalf of the applicants, the answer offered by previous generations would have been that the argument was nonsense. Whether we like it or not, that comfortable course is not available to us. The reason is summarised by Professor Vernon Bogdanor in his “New British Constitution”. At page 28 he describes how “the problem of how to give legislative effect to membership of a body which could overrule Parliament” was resolved.

“… the European Communities Act of 1972, … provided for the recognition of all directly enforceable Community Law in preference to any Act of Parliament, past or future. Thus, until the Act were to be repealed, European Community Law would trump existing or future legislation passed by Westminster… Parliament in 1972 had been able to do something which many had previous thought impossible, that is, to limit its sovereignty. European Community legislation was superior to statute…there can be little doubt that the European Communities Act produced a structural change in the British constitution”.

Thus, the issues raised in these applications must be addressed by reference to European Union Law (EU law) and not, save to the extent that EU law has been incorporated into domestic law, to constitutional principles which pre-date our entry into the European Communities. In summary, section 2(4) of the European Communities Act 1972 prohibits the application domestically of statutory provisions which are inconsistent with directly applicable Community law. It is therefore not open to us to ignore EU law. Parliament has obliged us to apply it, even if the effect may be to render an Act of Parliament unenforceable.

We have all contributed to the judgment of the court, but the heavy burden of preparing those parts of the draft which address EU law, and the European Convention on Human Rights (“the Convention”), was undertaken by Lloyd Jones J.

In the first application Interfact Limited (“Interfact”) applied pursuant to Civil Procedure Rules 52.17 for permission to apply to the Divisional Court to re-open its decision of the 23^rd May 2005 in Interfact Limited v Liverpool City Council [2005] EWHC 995 (Admin) to dismiss Interfact’s appeal by way of case stated against a number of convictions under section 12(1) of the 1984 Act. We have sat as a Divisional Court to hear this application. In the second Nikolas Budimir and Nicholas Rainbird applied to the Court of Appeal Criminal Division for an extension of time (approximately 1 year 8 months) and leave to appeal against their convictions at the Bournemouth Crown Court on 10^th March 2008 for offences contrary to section 10(1) of the 1984 Act. The essential facts are very simple. The question in each case is whether the failure by Her Majesty’s Government to give an appropriate notification under the Directive has, through the application of EU law and the Convention created an injustice which it is not otherwise possible to discern.

Interfact is a mail order company which trades in videos including those which have been given “R18” certificates by the British Board of Film Classification. Section 12(1) of the 1984 Act provides that R18 videos may only be supplied or offered for supply in a licensed sex shop.

On 27^th April 2004 the applicant was convicted by Liverpool Magistrates’ Court on 44 counts under section 12(1) of the 1984 Act. The acts constituting the offences involved

Interfact was fined £3,000 in respect of one offence of supplying and £2,000 in respect of one offence of offering to sell. No fine was imposed in respect of the other 42 offences. Interfact was also ordered to pay £25,617.22 in costs to Liverpool City Council Trading Standards Department which had brought the prosecution.

Interfact appealed to the Divisional Court by way of case stated, contending that the court below had erred in its interpretation of where the supply took place for the purposes of section 12(1) of the Act. On 23^rd May 2005 the Divisional Court (Maurice Kay LJ, Newman J.) dismissed the appeal and upheld the convictions. Interfact was ordered to pay the Respondent’s costs which were later agreed in the sum of £16,000 and paid. Interfact sought leave to appeal to the House of Lords. That application was refused on 13^th October 2005. It looked like the end of the litigation.

On 10^th March 2008 Budimir and Rainbird pleaded guilty at Bournemouth Crown Court to six counts of having in their possession for the purpose of supply a video recording containing a video work in respect of which no classification certificate had been issued, contrary to section 10(1) of the 1984 Act. Each offence was committed on 31^st January 2007. Furthermore each asked the court to take into consideration one offence contrary to section 10(1) of the 1984 Act, namely that they “between 30^th April 2003 and 1^st February 2007 had in their possession for the purpose of supply 15,631 video recordings containing video works in respect of which no classification or certificate had been issued”. In respect of these offences each of the applicants was fined a total of £30,000 and ordered to pay £690 prosecution costs. In addition each was made the subject of a confiscation order in the sum of £156,370.

The present applications for leave to appeal out of time, were received at the Crown Court on 11^th December 2009, approximately 1 year and 8 months out of time.

The Technical Standards Directive, Directive 83/189 EEC was adopted by the Council of the European Community on 28^th March 1983. It was required to be implemented by Member States by the 28^th March 1984.

Its purpose is to eliminate restrictions on the free movement of goods. This is apparent from the following recitals in the preamble:

“Whereas the prohibition of quantitative restrictions on the movement of goods and of measures having an equivalent effect is one of the basic principles of the Community;

Whereas barriers to trade resulting from technical regulation relating to products may be allowed only where they are necessary in order to be essential requirements and have an objective in the public interest of which they constitute the main guarantee;

Whereas it is essential for the Commission to have the necessary information at its disposal before the adoption of technical provisions; whereas, consequently the Member States which are required to facilitate the achievement of its task pursuant to Article 5 of the Treaty must notify it of their projects in the field of technical regulations;…”

Article 1 defines “technical specification” as “a specification contained in a document which lays down the characteristics required of a product such as levels of quality, performance, safety or dimensions, including the requirements applicable to the product as regards to terminology, symbols, testing and test methods, packaging, marketing or labelling;” It defines “technical regulation” as “technical specifications, including the relevant administrative provisions, the observance of which is compulsory, de jure or de facto, in the case of marketing or use in a Member State or a major part thereof, except those laid down by local authorities”.

Article 8(1) requires Member States to communicate immediately to the Commission any draft technical regulation. The Commission is then obliged to notify the other Member States of any draft it has received. Article 8(2) provides for the Commission and other Member States to make comments on the draft technical regulation.

Article 9(1) of the Directive provides:

“Without prejudice to paragraph 2, Member States shall postpone the adoption of a draft technical regulation for 6 months from the date of the notification referred to in Article 8(1) if the Commission or another Member State delivers a detailed opinion, within three months of that date, to the effect that the measure must be amended in order to eliminate or reduce any barriers which it might create to the free movement of goods.”

In a series of judgments the Court of Justice of the European Communities has established that breach of the obligation to notify under Directive 83/189 renders non-notified technical regulations inapplicable so that they are unenforceable against individuals. (Case C-194/94 CIA Security International SA v Signalson SA and Securitel SPRL [1996] ECR I-2201 at paragraphs 50, 54; Case C-194/94 Lemmens [1998] ECR I-3711 at paragraph 33; Case C-159/00 Sapod – Audic [2002] ECR I-5031 at paragraphs 49,52; Case C-20/05 Criminal Proceedings concerningSchwibbert [2007] ECR I-9447 at paragraphs 38, 44.)

On 24^th August 2009 Her Majesty’s Government announced that offences under the 1984 Act and the related regulations are technical regulations which should have been notified under Directive 83/189/EEC. The Act and the Regulations had not been notified and accordingly this failure rendered them unenforceable against individuals.

In a letter dated 24^th August 2009 to the Director of Public Prosecutions Barbara Follett MP, Minister for Culture and Tourism, stated:

“It has come to light that offences under the Act are unenforceable and, accordingly, all affected current prosecutions under the Act should be discontinued and future prosecutions should not be undertaken.

…The detailed reasons why the offences under the Act are unenforceable are as follows. It is clear that sections 9 and 10 of the Act and the Regulations are technical regulations which should have been notified to the European Commission under Article 8(1) of the Technical Standards Directive 83/189/EEC. The European Court of Justice has held (see CIA Securities C-194/94) that a breach of this obligation to notify renders the technical regulations concerned inapplicable so that they are unenforceable against individuals. It is also considered that the other offences in the Act (under sections 11 to 14) constitute technical regulations and that these offences are similarly unenforceable against individuals.

To reiterate all the offences under the Act are unenforceable because of a failure to notify the Act and the Regulations under the Technical Standards Directive 83/189/EEC. Any existing prosecutions under the Act should not be continued and no new prosecution should be brought until the issue is rectified.

In relation to past prosecutions, it is our understanding that there would be no positive obligation on the Government to re-open these; however we would value any comments you may have in this regard.”

The Department for Culture, Media and Sport duly notified the 1984 Act and the Regulations made under it to the European Commission on 11^th September 2009. During the standstill periods laid down by Article 9(1) of the Directive, no objection was taken by the Commission or any other Member State to the effect that the legislation “must be amended in order to eliminate any barriers which it might create to the free movement of goods.” Following the expiry of this period the 1984 Act was repealed and re-enacted in identical terms in the Video Recordings Act 2010 (“the 2010 Act”). The appropriate Regulations were also re-made. These applications proceeded on the basis that the 2010 Act was not expressed in terms sufficient to justify the conclusion that it was intended to or should have retrospective effect.

It is against this background that the applicants seek to quash their convictions. The applications are opposed by the respondents, and the Secretary of State, to whom leave was given to intervene.

Before considering the submissions of the applicants on the basis of EU law and the Convention as given effect by the Human Rights Act 1998 we propose to say something about the powers that would be available in a purely domestic case and the approach which would be adopted by this court in an analogous domestic situation. Here we have in mind, in particular, the observations of the Court of Justice in Case C-312/93 Peterbroeck v. Belgian State [1995] I- ECR 4599, at paragraph 14, where it emphasised that the principle of effectiveness, on which the applicants in the present case rely, must be applied by examining the national procedural rules within the context of that national legal system

CPR Rule 52.17 sets out the approach to be followed by courts in respect of applications to re-open a final determination of an appeal including an appeal by way of case stated (CPR 52.1(3)(a))

“Re-opening of final appeals.

52.17

(1)

the Court of Appeal or the High Court will not re-open a final determination of any appeal unless –

(a)

It is necessary to do so in order to avoid real injustice;

(b)

The circumstances are exceptional and make it appropriate to re-open the appeal;

(c)

There is no alternative effective remedy.

In this regard Interfact also relies on Taylor v Lawrence [2003] QB 528 where the Civil Division of the Court of Appeal concluded that it had an inherent jurisdiction to do what was necessary to achieve its two principal objectives of correcting wrong decisions and ensuring public confidence in the administration of justice. Therefore it could take the exceptional course of re-opening proceedings which it had already heard and determined if it was clearly established that a significant injustice had probably occurred and that there was no alternative effective remedy. Furthermore in Seray-Wurie v Hackney London Borough Council [2003] 1 WLR 257 the Court of Appeal held that the High Court when sitting as an appeal court has an inherent jurisdiction similar to that of the Court of Appeal to re-open a case which it has decided. However it emphasised that the jurisdiction is to be exercised only in exceptional circumstances.

Budimir and Rainbird seek leave to appeal to the Court of Appeal out of time. An application for leave to appeal must be made within 28 days from the date of the conviction, verdict or finding appealed against. This period may be extended, either before or after it expires, by the Court of Appeal. (Criminal Appeal Act 1968, section 18(2), (3).)

So far as we are aware, the precise circumstances of these applications have never previously arisen for consideration in this jurisdiction. However, the House of Lords and the Court of Appeal have consistently held that, in analogous circumstances where a conviction was based on the law as it was then understood to be, a subsequent change of the law or in the understanding of the law will not be a valid ground for leave to appeal out of time, unless substantial injustice has been done. Among many authorities to this effect, we note R v Mitchell [1977] 65 Cr App R195 and 189, R v Hawkins [1997] 1 Cr App R234 at p240, R v Campbell (Colin Frederick)[1997] 1 Cr App R199 at 206 E, R v Benjafield [2006] 1AC 1099, R v Kansal (No 2) [2002] 1 Cr App R36, R v Ballinger [2005] 2 Cr App R 29, R v R[2007] 1 Cr App R10 and R v Cottrell, R v Fletcher[2008] 1 Cr. App. R. 7.

For the purposes of the present applications we shall not seek to discern nor create a difference of approach to the applications in the Divisional Court (CPR Rule 52.17, and Taylor v Lawrence[2003] QB 528 and Seray-Wurie Hackney London Borough Council [2003] 1 WLR 257) and the Court of Appeal Criminal Division.

We are wholly unpersuaded that the convictions in these cases have given rise to any substantial injustice.

In a series of cases concerning the effect of non-notification in accordance with this Directive and its successors the Court of Justice has expressed the effect of non-notification in EU law in careful and precise terms. In Case C-194/94 CIA Security it stated:

“In view of the foregoing considerations, it must be concluded that Directive 83/189 is to be interpreted as meaning that breach of the obligation to notify renders the technical regulations concerned inapplicable, so that they are unenforceable against individuals.” (at para. 54.)

In Case C-194/94 Lemmens at paragraph 33 and Case C-159/00 Sapod Audic at paragraph 49 the principle is expressed in similar terms.

In Sapod Audic the Court considered the effect of non-notification on the enforcement of contractual rights.

“Second, it should be borne in mind that according to the case-law of the Court the inapplicability of a technical regulation which has not been notified to the Commission in accordance with Article 8 of Directive 83/189 may be invoked in legal proceedings between individuals concerning, inter alia, contractual rights and duties (see Unilever, paragraph 49).

Accordingly, if the national court were to interpret the second paragraph of Article 4 of Decree No. 92-377 as establishing an obligation to apply a mark or label and, hence, constituting a technical regulation within the meaning of Directive 83/189, it would be incumbent on that court to refuse to apply that provision in the main proceedings.

It should, however, be observed that the question of the conclusions to be drawn in the main proceedings from the inapplicability of the second paragraph of Article 4 of Decree No. 92-377 as regards the severity of the sanction under the applicable national law, such as nullity or unenforceability of the contract between Sapod and Eco-Emballages, is a question governed by national law, in particular as regards the rules and principles of contract law which limit or adjust that sanction in order to render its severity proportionate to the particular defect found. However, those rules and principles may not be less favourable than those governed in similar domestic actions (principle of equivalence) and may not be framed in such a way as to render impossible in practice the exercise of rights conferred by Community law (principle of effectiveness)…” (at paragraphs 50-52.)

Similarly in Case C-20/05 Schwibbert the court considered that a failure to notify to the Commission a draft technical regulation would result in its being unenforceable against Mr. Schwibbert (see paragraphs 33 and 38). At paragraph 44 the Court stated:

“According to the case law of the court, the failure to observe the obligation to notify constitutes a procedural defect in the adoption of the technical regulations concerned, and renders the technical regulations inapplicable and therefore unenforceable against individuals (see, in particular, CIA Security International, paragraph 54 and Lemmens at paragraph 33). Individuals may rely on that inapplicability before the national court which must decline to apply a national technical regulation which has not been notified in accordance with Directive 98/34 (see, in particular CIA Security International paragraph 55 and Sapod Audic paragraph 50)” (at paragraph 44).

All this acknowledged, it is however equally clear from the jurisprudence of the Court of Justice that failure to notify does not have the effect of rendering the national measure a nullity, void or non-existent. National courts are required to disapply legislation, including primary legislation, which is incompatible with EU law. Thus in Case C-10/97 to C-22/97 IN.CO.GE [1998] ECR I-6907 the Court of Justice considered the scope of the principle of supremacy laid down in Case 70/77 Simmenthal v. Amministrazione delle Finanze [1978] ECR II-695 and held at paragraph 21:

“It cannot therefore, contrary to the Commission’s contention, be inferred from the judgment in Simmenthal that the incompatibility with Community law of a subsequently adopted rule of national law has the effect of rendering that rule of national law non-existent. Faced with such a situation, the national court is, however, obliged to disapply that rule, provided always that this obligation does not restrict the power of the competent national courts to apply, from among the various procedures available under national law, those which are appropriate for protecting the individual rights conferred by Community law.”

The same principle was stated in the following terms by Lord Walker in Fleming v HMRC [2008] 1 WLR 195:

“… [I]t is a fundamental principle of the law of the European Union, recognised in section 2(1) of the European Communities Act 1972, that if national legislation infringes directly enforceable Community rights, the national court is obliged to disapply the offending provisions. The provision is not made void but it must be treated as being (as Lord Bridge of Harwich put it in R v Secretary of State for Transport ex parte Factortame [1990] to AC 85,140) “without prejudice to the directly enforceable Community rights of nationals of any member state of the EEC”.” (at paragraph 24)

Beyond that, the further consequences to be drawn from the failure to notify a measure in accordance with the Directive are left to the national law of the Member State concerned, subject to the overriding requirements of EU law that the applicable rules of national law are no less favourable than those governing similar domestic actions (the principle of equivalence) and that they may not be framed in such a way as to render impossible or excessively difficult in practice the exercise of rights conferred by Community law (the principle of effectiveness). (See e.g. Case C-33/76 Rewe v. Landwirtschaftskammerfur das Saarland [1976] ECR1989 at paragraph 5; Joined Cases C - 52/-99 and C - 53/-99 Camorotto and Vignone [2001] ECR I-1395 at paragraph 21).

Turning therefore to the consequences of non-notification in national law, the first and most fundamental point is that no court has the power to strike down an Act of Parliament or to declare it a nullity. In any event, as we have shown, what would otherwise appear to be a remarkable consequence is not required by EU law.

So far as concerns action taken pursuant to the statute, the starting point is that the courts treat both administrative and subordinate legislative acts as effective and valid until quashed by a court of competent jurisdiction. In Smith v. East Elloe RDC [1956] AC 736 Lord Radcliffe observed at pp 769-7:

“An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.”

We note that EU law applies a similar presumption of validity in the case of EU legislation. The Court of Justice expressed the principle in the following terms in Commission v BASF AG [1994] ECR I – 2555:

“Acts of the EU Community institutions in principle are presumed to be lawful and accordingly produce legal effects, even if they are tainted by irregularities, until such time as they are annulled or withdrawn” (at paragraph 48).

As a matter of national law, therefore, the decision of the Divisional Court in Interfact upholding the convictions and the convictions before the Crown Court in the cases of Budimir and Rainbird, are valid unless and until they are set aside. In R v Cain [1985] 1 AC 46 Lord Scarman observed (at paragraph 55D-F):

“The terms used to formulate the law by the judges of the Court of Appeal… have not been happy. They have spoken of orders being void or null for lack of jurisdiction in the court to make them. But you cannot describe as a nullity an order made by a superior court of record, which is what the Crown Court is: section 4(1) of the Courts Act 1971. Nor is the question really one of jurisdiction: it is a question of whether the court has exceeded its power. An order of the Crown Court once made may be in excess of its statutory power or otherwise irregular. But it is not a nullity. And it would undermine the authority of the criminal law if orders made by the highest court of trial in criminal matters could be disregarded as nullities. The order of the Crown Court stands unless and until set aside by the court itself upon application or, if appeal lies, by the appellant tribunal to which the appeal is taken. But the terms used by the courts do not vitiate their reasoning.”

On behalf of the applicants it is submitted that

In general, EU law does not require national courts to disapply their own procedural rules in order to secure the vindication of EU rights. In Case C–234/04 Kapferer [2006] ECR I – 2585 the Austrian Supreme Court was seised of an appeal in which the respondent had failed to lodge within the time stipulated a respondent’s notice taking a point on jurisdiction under the Brussels Convention. The Court referred to the Court of Justice the questions whether it was, nevertheless, bound to take the point of EU law of its own motion and whether EU law required a national court to review and set aside a final judicial decision in circumstances where it later became apparent that the decision of the court was in breach of EU law. The Court of Justice held that a national court is not so bound.

“19.

By Question 1(a), the referring court asks essentially whether, and, where relevant, in what conditions, the principle of cooperation arising from Article 10 EC imposes on a national court an obligation to review and set aside a final judicial decision if that decision should infringe Community law.

20.

In that regard, attention should be drawn to the importance, both for the Community legal order and national legal systems, of the principle of res judicata. In order to ensure both stability of the law and legal relations and the sound administration of justice, it is important that judicial decisions which have become definitive after all rights of appeal have been exhausted or after expiry of the time-limits provided for in that connection can no longer be called into question (Case C-224/01 Köbler [2003] ECR I-10239, paragraph 38).

21.

Therefore, Community law does not require a national court to disapply domestic rules of procedure conferring finality on a decision, even if to do so would enable it to remedy an infringement of Community law by the decision at issue (see, to that effect, Case C-126/97 Eco Swiss [1999] ECR I-3055, paragraphs 46 and 47).

22.

By laying down the procedural rules for proceedings designed to ensure protection of the rights which individuals acquire through the direct effect of Community law, Member States must ensure that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and are not framed in such a way as to render impossible in practice the exercise of rights conferred by Community law (principle of effectiveness) (see, to that effect, Case C-78/98 Preston and Others [2000] ECR I-3201, paragraph 31 and the case-law cited). However, compliance with the limits of the power of the Member States in procedural matters has not been called into question in the dispute in the main proceedings as regards appeal proceedings.”

Notwithstanding the decision in Kapferer, Lord Pannick QC submits that the present case is one in which EU law does require the court to reopen its previous decision. He seeks to distinguish Kapferer on the basis that the precise ruling in Kapferer was that under EU law national courts are not obliged to disapply procedural rules which prevent the reopening of a judicial decision. However, he submits that in the present case there is no such rule preventing the court from reopening the decision. Rather, the question here is whether the court should exercise its discretion to remedy the infringement of EU law at issue in this case. He submits that while it was the case in Kapferer that the national court was not able, absent an express EU law power, to reopen its own decision, that is not the position in the present applications. Accordingly he submits that the Kapferer principle is not applicable.

Further, Lord Pannick submits that the closer analogy in the present case is with the earlier decision of the Court of Justice in Case C–453/00 Kühne & Heitz [2004] ECR I-837 concerning the obligation imposed on an administrative body to review a final administrative decision contrary to EU law as it has been interpreted subsequently by the Court of Justice. That case establishes that in such circumstances, where national administrative bodies have the power to reopen their decisions, they are required to do so.

In our view, however, the principle laid down in Kapferer is not confined to the particular circumstances of that case. It establishes as a matter of general principle that EU law does not require a national court to reopen a final judicial decision, even if failure to do so would make it impossible to remedy an infringement of a provision of EU law. (See Kapferer at paragraph 21: Case C - 2/08 Fallimento Olimpiclub, Judgment of 3 September 2009 at paragraph 23; Case C – 40/08 Asturcom, Judgment of 6^th October 2009 at paragraph 37.)

In Kapferer itself the Court of Justice addressed Kühne & Heitz in the following terms:

“23      It should be added that the judgment in Kühne & Heitz, to which the national court refers in Question 1(a), is not such as to call into question the foregoing analysis. Even assuming that the principles laid down in that judgment could be transposed into a context which, like that of the main proceedings, relates to a final judicial decision, it should be recalled that that judgment makes the obligation of the body concerned to review a final decision, which would appear to have been adopted in breach of Community law subject, in accordance with Article 10 EC, to the condition, inter alia, that that body should be empowered under national law to reopen that decision (see paragraphs 26 and 28 of that judgment). In this case it is sufficient to note that it is apparent from the reference for a preliminary ruling that that condition has not been satisfied.”

The Court in this passage does not accept that the principle in Kühne & Heitz could be transposed into the context of a final judicial decision and does not lend any support to the view that it could be so transposed

In any event, we are persuaded by the submissions of Miss Demetriou on behalf of the Secretary of State that the Kapferer principle is not limited in the manner suggested by Lord Pannick.

First, the fact that this court has the power to reopen its final decision whereas the Austrian Supreme Court in Kapferer did not is not a material ground for distinguishing the two cases. As Miss Demetriou points out, if EU law required a national court to reopen a final judicial decision so as to remedy any infringement of EU law, the supremacy of EU law would require any inconsistent national rules to be disapplied. In principle this must be the case whether they contain an absolute prohibition against reopening a final decision or not. However, as the Court of Justice has confirmed, EU law does not impose any such requirement. Again, as a matter of principle that must be so whatever the powers available to the court under domestic law.

Secondly, Kühne & Heitz was not concerned with a judicial decision but an administrative decision. In Kapferer the court indicated at paragraph 20 that the rationale of the principle it was applying related specifically to judicial decisions i.e. the need to ensure both finality in the law and legal relations and the sound administration of justice. These considerations do not necessarily apply in the case of administrative decisions.

Thirdly, the approach advocated by Lord Pannick is impossible to reconcile with the case law of the Court of Justice on the purpose and finality of limitation periods in judicial proceedings. The Court of Justice has upheld national time limits and limitation periods on grounds of legal certainty and the need to ensure finality in decision making, even though the effect has been to preclude enforcement of a EU law right. (See, for example, Case C-261/95 Palmisani [1997] ECR I-4025; Case C-188/95 Fantask A/S v. Industriministeriet (Ehrvervsministeriet) [1997] ECR I-6783.)

Fourthly, the argument is inconsistent with the unqualified manner in which the Court has expressed the Kapferer principle in subsequent judgments. Thus in Asturcom, at paragraph 37, the Court took Kapferer as establishing the principle that:

“…Community law does not require a national court to disapply domestic rules of procedure conferring finality on a decision even if to do so would make it possible to remedy an infringement of a provision of Community law, regardless of its nature, on the part of the decision at issue…”

Accordingly, we consider that the Kapferer principle applies to the present applications. However, as the Court of Justice has made clear in Kapferer and its subsequent decisions, that principle is itself subject to the overriding requirements of the principles of equivalence and effectiveness to which we now turn.

In the decentralised system of the EU legal order, rights of individuals under EU law are given effect principally through national courts. In the absence of EU rules on the subject, EU law leaves to the domestic legal system of each Member State the designation of the courts having jurisdiction and the rules governing proceedings intended to secure rights conferred by EU law. However, national law is not given an entirely free hand in such matters. The applicable national rules must comply with two conditions. First, they must not be less favourable than those governing similar domestic actions (the principle of equivalence). (Joined Cases 66/79, 127/79 and 128/79 Amministrazione delle Finanze v. Salumi [1980] ECR1237 at paragraphs 17-21) Secondly, they must not render the exercise of rights conferred by Community law impossible or excessively difficult (Case C-199/82 Amministrazione delle Finanze v. San Giorgio [1983] ECR 3595) .

It is no longer maintained on behalf of the applicants that the principle of equivalence is infringed by the applicable national rules of procedure. The rules of national law which apply here are precisely the same rules which apply where issues of EU law are not in play.

The principle of effectiveness results directly from the application of the principles of supremacy and direct effect in EU law. It is for national courts, in application of the principle of co-operation laid down in Article 10 EC, to ensure the legal protection which individuals derive from the direct effect of provisions of EU law. (Case C-213/89 R v. Secretary of State for Transport, ex parte Factortame Ltd. [1990] ECR I-2433 at paragraph 19.)

During the course of argument we invited counsel to identify the EU law right which had been infringed in the present cases. In particular is it a right not to be prosecuted or a power to invoke the consequences of non-compliance with the Directive? Counsel were in substantial agreement that the relevant EU right here is, in each case, the procedural entitlement to invoke the Member State’s failure to comply with Art 8(1) of the Directive which would have the effect of disapplying the legislation against them. As Lord Pannick QC put it, the relevant right is the right to say that the statute is unenforceable. This approach is supported by the relevant judgments of the Court of Justice. (See Case C-159/00 Sapod Audic at paragraph 53; Case C-194/94 CIA Security International SA at paragraph 44.)

It would have been open to the applicants to invoke this right before the Magistrates’ Court and the Crown Court respectively. If they had taken the point the prosecution would necessarily have been dismissed in each case. The applicable rules of procedure would have ensured that the statutory provisions were disapplied against these applicants, thereby giving effect to their EU law rights. The inability of the applicants to rely on the point at trial was due, in each case, not to any deficiency in national law making it impossible or excessively difficult to do so but simply to a lack of knowledge of the relevant facts shared with and by the prosecuting authorities, and indeed the relevant courts themselves. The rules of national law applicable at that stage of the proceedings clearly do not infringe the principle of effectiveness: the point was open to be taken.

The question then becomes whether the principle of effectiveness requires a national court to disapply the generally applicable rules of national law governing the reopening of final judicial decisions in criminal cases in circumstances where the Defendants were unable to invoke at trial their EU law right and the rule of national law which would have enabled them to do so because of ignorance of the matters which gave rise to the EU law right now said to be engaged.

The principle of effectiveness does not require that EU rights will be enforced by national courts in all circumstances. On the contrary, there are clearly limits to the application of the principle, as the reasoning of the Court of Justice and the result in Case C-234/04 Kapferer demonstrate. Failure to comply with many procedural rules in national law, such as those concerned with limitation of actions or time limits for procedural steps, will be likely to restrict, at least to some extent, the right of affected parties to invoke EU rights before national courts. Nevertheless, such procedural rules normally do not infringe the principle of effectiveness because they are justified by the requirement of legal certainty.

Furthermore, in Case C-312/93 Peterbroeck v. Belgian State [1995] I- ECR 4599 the Court of Justice emphasised that the principle of effectiveness must be applied by examining the national procedural rule within the context of that national legal system:

“ For the purposes of applying those principles, each case which raises the question whether a national procedural provision renders application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In the light of that analysis the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration.” (at paragraph 14)

(See also Cases C-430-431/93 Van Schinjndel and Van Vee v. Stichtung Pensioenfonds voor Fysiotherapeuten [1995] ECR I-4 705 at paragraph 19.)

National procedural, evidential and substantive rules must, therefore, be considered in the light of the domestic judicial system as a whole when determining whether they make it impossible or excessively difficult in practice to exercise EU law rights. The leading authorities which state the principles of national law applicable in analogous situations have been referred to in an earlier section of this judgment. The essential rationales for rules limiting the reopening of final judicial decisions in criminal cases are considerations of legal finality and fairness. Thus in R v Cottrell, R v Fletcher [2008] 1 Cr. App. R. 7 the court identified “a continuing public imperative that so far as possible there should be finality and certainty in the administration of criminal justice”. Furthermore, in that case the court adopted the explanation of Murray C.J. sitting in the Supreme Court of Ireland in A v Governor of Arbour HillPrison that unqualified retroactivity could be a denial of justice to the victims of crime and offend against fundamental and just interests of society. Moreover, the rules of national law in play here are not absolute or inflexible. They permit final convictions to be reopened where substantial injustice would otherwise be done. However, for the reasons set out earlier in this judgment, we do not consider that a refusal to reopen the convictions in the present cases would result in substantial injustice.

Consequently, we consider that when the issue is addressed at this general level of the operation of the national rules, having regard to their intrinsic nature, aim and effect, those rules do not infringe the principle of effectiveness.

However, when addressing the principle of effectiveness, it is also necessary to consider the application of the national procedural rules to the particular facts of the cases before us, when weighed against the aim and importance of the Community measure in question.

Here, Lord Pannick submits that the applicants did not know, nor was there any public record from which they could have known, of the failure of the Government to notify the legislation to the Commission. There is no evidence before us to the contrary and for present purposes we consider it right to proceed on that basis. (We were told, during the hearing that today all notifications of measures to the Commission pursuant to the Directive are displayed on a website. However, there is no evidence to suggest that that was the case in 2004 and 2008 when these applicants respectively faced prosecution.) Accordingly, Lord Pannick submits, there was no practical possibility of the point being taken at trial and the principle of effectiveness requires that this court should permit the point to be taken now.

We consider that there is a practical answer to the applicants’ submission. The need to notify the national measure in compliance with the Directive was a point which it was open to anyone to take. The nature of the provisions of the 1984 Act and their possible effect on free movement of goods were apparent on their face. No further factual knowledge was required to enable the point to be taken that the national measure required to be notified in conformity with Article 8 of the Directive. The point was there to be taken. In this regard we note that, as Miss Demetriou points out, in a number of the reported cases defendants have taken a point on non-notification when first prosecuted. Once the point was taken, it would have been open to the applicants’ legal advisers to raise with the appropriate government department the question whether notification had taken place and the issue as to whether notification was required could then have been litigated. Indeed it is not unknown for points relating to the free movement of goods to be taken in prosecutions for the unlawful distribution of pornography.

Having regard to all these considerations, we do not consider that the national rules concerning leave to appeal out of time or permission to re-open a final decision or their application in the particular circumstances of these cases have the effect of making it virtually impossible or excessively difficult for an individual to rely on the right conferred by EU law. Furthermore, in the particular circumstances of this case the application of the national procedural rule is not disproportionate when its rationale is balanced against the object and importance of the EU right in issue. The national rules in play here do not render ineffective the protection of Community rights.

A very recent decision of the Court of Justice, drawn to our attention by Miss Demetriou, supports this conclusion. Case C-542/08 Barth v. Bundesministerium für Wissenschaft und Forschung (Judgment of 15 April 2010) concerned long service increments payable to university professors. Professor Barth had been employed as a professor at Frankfurt am Main (Germany) from 1975 until 1987 when he was appointed as a professor at Vienna (Austria). The relevant Austrian legislation had expressly provided that the long service increment was payable to those who had completed 15 years service as a professor in an Austrian university. Accordingly, Professor Barth did not receive that increment and had made no application to receive it. In Case C-224/01 Köbler [2003] ECR I-10239 the Court of Justice held that this infringed Community law. As a result, the Austrian legislation was amended in 2004 to permit service in any university in a State which was then in the European Union to count towards long service. Professor Barth applied for the first time for a long service award and was found eligible. However, his award took effect for remuneration purposes only from 2000 because of a statutory rule that an entitlement to benefits shall be time barred if no claim to that entitlement is made within three years of the date when the services which gave rise to the entitlement were effected.

The Court of Justice held that reliance on the limitation period did not infringe the principle of equivalence or the principle of effectiveness.

“28      As regards the principle of effectiveness, the Court has stated that it is compatible with European Union law to lay down reasonable time-limits for bringing proceedings in the interests of legal certainty which protects both the individual and the authorities concerned. Such time-limits are not liable to make it in practice impossible or excessively difficult to exercise the rights conferred by European Union law. In that regard, a national limitation period of three years appears to be reasonable (see, to that effect, Aprile, paragraph 19, and Case C-445/06 Danske Slagterier [2009] ECR I-0000, paragraph 32 and case-law cited).

29      Therefore, in the absence of particular circumstances brought to the attention of the Court, a limitation rule such as that applied against the applicant in the main proceedings, providing for a three-year limitation period, which may be extended by nine months, cannot be regarded as being contrary to the principle of effectiveness."

The principle of effectiveness was not infringed by the application of the limitation period notwithstanding the fact that Professor Barth had suffered loss as a result of the earlier conduct of the Austrian Government in breach of EU law. In particular, Professor Barth had relied on the deterrent effect of the earlier express statutory provision:

“31    The applicant in the main proceedings and the Commission observe, however, that the Austrian legislature had excluded, by an unambiguous legislative provision, the taking into account of periods of employment completed in universities of Member States other than the Republic of Austria.

32

They argue that university professors who completed periods of service in such universities had to expect, in those circumstances, that their applications for the recognition of those periods for the purposes of the special length-of-service increment would be unsuccessful. The conduct of the Austrian legislature was therefore such as to deter university professors who were theoretically entitled to that increment from making in due time the application necessary for the right to be implemented.”

The Court of Justice declined to be influenced by this consideration:

In the two cases now before us it can fairly be said that the Department for Culture, Media and Sport and its predecessors failed to alert the public to the fact that it had not notified the relevant measures to the Commission in accordance with the Directive. However, that falls far short of the conduct of the Austrian Government in Barth. Although that did not amount to a positive misrepresentation (paragraph 36) it had constituted a positive obstacle to the enforcement of EU rights. In any event it cannot be said that the conduct of the Department in the present cases had the effect of depriving these applicants of any opportunity of enforcing their rights before the national courts. Their inability to do so arose simply from their ignorance in circumstances where the Department was itself unaware of its breach of the Directive and was therefore under no duty to draw the matter to their attention.

Finally, in this regard, we would make two further observations about the decision in Barth. First, it is correct, as the Court of Justice pointed out (at paragraph 35 of its judgment), that the application of the limitation period did not altogether deprive Professor Barth of the right to obtain the increments which in breach of EU law had been denied to him. He could still claim for the 3 years within the limitation period and prospectively. However, that does not affect the principle that a national procedural rule was successfully invoked in such a way as to defeat an entitlement under Community law in respect of the earlier period. Secondly, to the extent that the object and importance of the EU right in issue is a relevant consideration, the importance of the EU right in play in Barth (free movement of workers) is certainly no less than that in the applications with which we are concerned (free movement of goods).

For these reasons, we conclude that the application of the established rules of national procedure would not infringe the principle of effectiveness.

On behalf of the applicants it is submitted that a consequence of the failure to notify the provisions of the 1984 Act in conformity with the Directive is that their convictions and punishment infringe Article 7 ECHR which provides that no one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Furthermore, they allege that the convictions and punishment infringe Article 10 ECHR because the resulting restriction on their freedom of expression cannot be justified on grounds of the protection of morals or the protection of the rights and freedoms of others under Article 10(2) because they are not “prescribed by law”. They contend that the applicants’ convictions are invalid in law because they were based on a “law” that was not enforceable against them.

In response, the respondents and the Secretary of State rely on the fact that the failure to notify the provisions of the 1984 Act does not result in its invalidity or nullity. The only obligation on a national court arising from the Directive is to disapply incompatible legislation in the event that the Directive is relied upon by a party to proceedings before it. However, the applicants contend that this is an unduly formalistic approach to the meaning of the term “law” in the ECHR and that the correct interpretation of the term within the ECHR is one that gives effect to the applicants’ right not to be convicted under a law that was unenforceable against them.

In this regard the applicants submit that it is appropriate to give a purposive interpretation to Article 7 and they rely in particular on the following passages in the judgment of the European Court of Human Rights in Kafkaris v. Cyprus, Judgment of 12 February 2008, (2009) 49 EHRR 35:

“ [t]he guarantee enshrined in Article 7, which is an essential element of the rule of law, occupies a prominent place in the Convention system of protection … It should be construed and applied, as follows from its object and purpose, in such a way as to provide effective safeguards against arbitrary prosecution, conviction and punishment.” (at paragraph 138)

“When speaking of “law” Article 7 alludes to the very same concept as that to which the convention refers elsewhere when using that term, a concept which comprises statute law as well as case-law (see, mutatis mutandis, Sunday Times v. United Kingdom, Judgment of 26 April 1979 …). In this connection, the Court has always understood the term “law” in its “substantive” sense, not its “formal” one. It has thus included both enactments of lower rank than statutes and unwritten law … In sum, the “law” is the provision in force as the competent courts have interpreted it” (at paragraph 140)

“[the Court] must have regard to the domestic law as a whole and the way it was applied at the material time” (at paragraph 146)

The applicants submit that the 1984 Act cannot be said to have been a “provision in force” at the time of the applicants’ convictions. Under EU law and therefore under domestic law the provision was unenforceable against the applicants. The State was not entitled to prosecute them under a law that was unenforceable, particularly when this unenforceability had not been disclosed to the applicant.

The passages from Kafkaris cited above demonstrate that the purpose of the requirement under Article 7 that a conviction be made under a “law” is to provide effective safeguards against arbitrary prosecution, conviction and punishment. From this the Court draws the following consequences:

“Accordingly, it embodies, in general terms the principle that only the law can define a crime and prescribe a penalty. While it prohibits in particular extending the scope of existing offences to acts which previously were not criminal offences, it also lays down the principle that the criminal law must not be extensively construed to an accused’s detriment, for instance by analogy.” (Kafkaris at paragraph 139)

A further consequence which has been drawn by the Court is that:

“an offence must be clearly defined in law. This condition is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the court’s interpretation of it, what acts and omissions will make him liable.” (Kokkinakis v. Greece (1993) 17 EHRR 397 at paragraph 52.)

It was these requirements of Article 7 which were analysed in Kafkaris. The applicant claimed that the unforeseeable prolongation of his term of imprisonment as a result of the repeal of the Prison Regulations and the retroactive application of new legislative provisions violated Article 7. The Court considered that it needed to determine what the penalty of life imprisonment actually entailed under the domestic law at the material time.

“The Court must, in particular, ascertain whether the text of the law, read in the light of the accompanying interpretative case law, satisfied the requirements of accessibility and foreseeability. In doing so it must have regard to the domestic law as a whole and the way it was applied at the material time.” (at paragraph 146)

None of these essential elements has been infringed in the present cases. In particular, the law in question was both accessible and foreseeable. The conduct prohibited by the 1984 Act was clearly defined and the applicants have admitted their infringing conduct. Moreover, the fact that it was not known until 2009 that it could not be enforced does not, in our view, make it arbitrary.

We do not read the passages from Kafkaris relied upon by the applicants as supporting the view that enforceability is an essential element of the concept of law in the European Convention on Human Rights. The references in the passages cited above to the law being in force and to law in its substantive sense as opposed to its formal sense are not, in our judgment, intended to refer to any concept of enforceability. Nor have any other authorities been drawn to our attention which support this proposition. Moreover, contrary to the submission of Lord Pannick, we do not consider that the fact that the statute could not be enforced against the applicants entitled them to defy it.

The judgment of the European Court of Human Rights in Kafkaris at paragraph 140, cited above, makes clear that the concept of “law” in Article 10 is the same as that in Article 7. Accordingly the same considerations apply to the applicants’ submissions on Article 10.

Moreover, we note that the jurisprudence of the European Court of Human Rights does not impose upon Contracting States an obligation to undo all the consequences of a national law which is later held to be incompatible with the Convention. Rather, it acknowledges that the principle of legal certainty dispenses with any such need.

Thus, in Marckx v Belgium [1979] 2 EHRR 330, a case concerning a Belgian law which deprived children born out of wedlock of inheritance rights, the European Court of Human Rights stated at para 58:

“The European Court of Human Rights interprets the Convention in the light of present-day conditions but it is not unaware that differences in treatment between “illegitimate” and “legitimate” children, for example in the matter of patrimonial rights, were for many years regarded as permissible and normal in a large number of Contracting States … Evolution towards equality has been slow and reliance on the Convention to accelerate this evolution was apparently contemplated at a rather late stage … Having regard to all these circumstances, the principle of legal certainty, which is necessarily inherent in the law of the Convention as in Community Law, dispenses the Belgian State from re-opening legal acts or situations that antedate the delivery of the present judgment. Moreover, a similar solution is found in certain Contracting States having a constitutional court: their public law limits the retroactive effect of those decisions of that court that annul legislation.”

This approach was followed by the European Court of Human Rights in the later case of Walden v Liechtenstein (Decision of 16 March 2000, No. 33916/96) which was concerned with sexual discrimination in relation to old age pensions. The question was whether the domestic court had acted incompatibly with the Convention when it did not annul the discriminatory legislation with retroactive effect, but made only a declaratory order, so as to allow time for amending legislation to be introduced. The Court stated:

“…the principle of legal certainty, which is necessarily inherent in the law of the Convention, may dispense States from questioning legal acts or situations that ante-date judgments of the court declaring domestic legislation incompatible with the Convention. The same considerations apply where a constitutional court annuls domestic legislation as being unconstitutional. … Moreover, it has also been accepted, in view of the principle of legal certainty, that a constitutional court may set a time-limit for the legislator to enact new legislation with the effect that an unconstitutional provision remains applicable for a transitional period.”

This approach was adopted by the Supreme Court of Ireland in A v Governor of Arbour Hill Prison [2006] IESC 45. A had pleaded guilty to a statutory offence. Two years later the Supreme Court had declared that the statutory provision was inconsistent with the provision of the Constitution of Ireland. The Supreme Court rejected an argument that the conviction was a nullity. It undertook what this court described in R v Cottrell, R v Fletcher [2008] 1 Cr. App. R. 7as “a comprehensive analysis of both common law and civil justice systems, which demonstrated the effective universality of the problem.” Murray C.J. observed:

“Absolute retroactivity based solely on the notion of an Act being void ab initio so as to render any previous final judicial decision null would lead the Constitution to have dysfunctional effects in the administration of justice…the application [of such] a principle…in the field of criminal law would render null and of no effect final verdicts or decisions affected by an Act which at the time had been presumed or acknowledged to be constitutional and otherwise had been fairly tried. Such unqualified retroactivity would be a denial of justice to the victims of crime and offend against fundamental and just interests of society.” (at p. 18).

“In a criminal prosecution where the State relies in good faith on a statute in force at the time and the accused does not seek to impugn the bringing or conduct of the prosecution, on any ground that may in law be open him or her, including the constitutionality of the statute, before the case reaches finality on appeal or otherwise, then the final decision in the case must be deemed to be and to remain lawful notwithstanding any subsequent ruling that the statute, or a provision, is unconstitutional. That is the general principle. I do not exclude…some extreme feature of an individual case, [which] might require, for wholly exceptional reasons related to some fundamental unfairness amounting to a denial of justice…” (At p. 29).

Lord Pannick submits that these authorities have no application to the present case because there has been no change in the understanding or interpretation of any legal rule. Rather, he submits, the only change in circumstances has been the Government’s admission, and the applicants’ subsequent discovery, that the law under which they were convicted was at all times unenforceable against them. We do not understand Marckx to be limited in the manner suggested by Lord Pannick. We consider that its rationale applies with equal force to the present circumstances where the parties and the court proceeded on the erroneous basis that the statute – enacted and clear and unequivocal in its provisions, and contravened by the applicants at a time when they knew or had every reason to believe that they were contravening it – was enforceable against the applicants.

In our judgment the convictions remain safe convictions.

In view of these conclusions it is not strictly necessary to address the power of the court to re-open a final determination of an appeal to the Divisional Court or to extend time for appealing against conviction to the Court of Appeal Criminal Division. The applications could simply be refused. However, the difficulty is readily identified. The arguments advanced on behalf of the applicants merited serious attention, raising as they did issues of pure law. If the applications are dismissed the opportunity for the Supreme Court to decide whether the issue justifies its attention would be denied.

Our answer to the question whether the failure by Her Majesty’s Government to give an appropriate notification under the Directive has, as a result of the application of EU law and the Convention created any injustice is that it did not. Nevertheless for the reasons we have given, and consistently with the approach of this court in R v Benjafield at paragraph 46, we are satisfied that the issue of law raised by the applicants is of general interest, and that it would therefore be inappropriate to refuse the applications and so deprive the applicants of the opportunity to interest the Supreme Court in the issue.

In these circumstances, the respective applications for leave to re-open the decision of the Divisional Court and to extend time for appealing to the Court of Appeal Criminal Division will be granted, but the consequent appeals will be dismissed. We shall certify an appropriately drafted question for the consideration of the Supreme Court. If that court were to grant leave to appeal and thereafter resolve the issue favourably to the appellants it would not automatically follow that any necessary time extensions would be granted in other cases.