R v Secretary of State for Transport, ex parte Factortame Ltd (No 2)

Facts

The Merchant Shipping Act 1988 required fishing vessels to be re-registered in a new register on conditions as to nationality, residence and domicile, which excluded vessels owned by Spanish nationals. The applicants, companies running vessels that had been registered under the earlier law, said the Act breached Community law.

History

The Divisional Court referred questions to the Court of Justice and granted interim relief suspending the Act. The Court of Appeal set aside that relief. In an earlier decision, the House of Lords held that English law gave no power to grant interim relief against the Crown and referred the question of Community law to the Court of Justice. The Court of Justice ruled that a national court must set aside a rule of national law that prevents interim relief where that is the only obstacle to granting it. The matter then returned to the House of Lords.

Issue

Whether, in the light of the ruling of the Court of Justice, the House of Lords had power to grant interim relief that would suspend the operation of an Act of Parliament, and whether it should do so on the facts.

Held

Interim relief was granted. The House of Lords restrained the Secretary of State from enforcing Part II of the 1988 Act against the applicants pending a final determination of their rights under Community law.

Ratio

• The European Communities Act 1972 required a United Kingdom court to give priority to directly effective Community rights over inconsistent national legislation, including an Act of Parliament passed after 1972, and to set aside any national rule of procedure that stopped it giving effective protection.
• The rule that no interim relief could be granted against the Crown was to be set aside to the extent necessary to protect Community rights, and the court had power to suspend the application of the statute pending trial.
• Interim relief should be granted on the usual principles where the applicants had an arguable case under Community law and the balance of convenience favoured them, in this case because of the damage they would suffer if the Act was applied before the issue was resolved.

The judgments

Key reasoning

• Parliament had voluntarily accepted the limitation of its sovereignty when it enacted the European Communities Act 1972, so the priority given to Community law was a result of the will of Parliament as expressed in that Act.
• The decision of the Court of Justice bound the House of Lords on the interpretation of Community law, which required the national rule to give way.
• On the balance of convenience, the applicants would suffer irreparable loss if the Act were enforced and they later succeeded, because damages would not be available against the Crown, whereas suspending the Act pending trial would cause comparatively limited harm to the public interest if they later failed.

Where it fits in the module

On the question whether Parliament can bind its successors, the case is the principal modern example. It tests the doctrine of implied repeal and the traditional account of sovereignty, and invites discussion of whether Parliament limited itself in a lasting way or merely gave a power that a later Parliament could withdraw by express words.

Criticisms

• The suggestion that the supremacy of Community law was simply the will of Parliament is difficult to reconcile with a doctrine of sovereignty under which Parliament cannot bind itself, and conceals a change in the rule of recognition made by the courts.
• The case did not decide whether a later Parliament could expressly repeal the 1972 Act or legislate in terms that required a result contrary to Community law, leaving the limits of the principle uncertain.
• The remedy overrides the clearly expressed will of a later Parliament on the strength of an obligation derived from an earlier Act, which is the real point of tension with the doctrine of implied repeal and the traditional view of sovereignty.