R v Secretary of State for Transport, ex p Factortame

Facts

The Merchant Shipping Act 1988 required fishing vessels registered in the United Kingdom to meet conditions relating to the nationality, domicile and residence of their owners. The applicants, companies largely owned by Spanish nationals, had registered vessels under the earlier legislation and would lose their right to fish against the United Kingdom quota if the new conditions applied. They argued that the Act was contrary to Community law, including the prohibition on discrimination on grounds of nationality and the freedom of establishment.

History

The Divisional Court referred questions of Community law to the European Court under article 177 of the EEC Treaty and granted interim relief preventing enforcement of the Act against the applicants. The Court of Appeal set aside the interim relief. The applicants appealed to the House of Lords.

Issue

Whether, pending a ruling by the European Court on the questions of Community law, an English court had power to grant interim relief against the Crown that disapplied the provisions of an Act of Parliament, and if not, whether Community law required it to do so.

Held

The House of Lords held that under English law the courts had no power to grant interim relief that suspended the application of an Act of Parliament or restrained the Crown. It decided to refer to the European Court the question whether Community law required national courts to set aside that rule.

Ratio

• Under English law there was no power to grant an interim injunction against the Crown and an Act of Parliament must be presumed valid until a court has held it incompatible with Community law, so interim relief to suspend its operation could not be given.
• Whether Community law overrides that rule was a question of Community law, to be referred to the European Court under article 177.

The judgments

Key reasoning

• The Crown Proceedings Act 1947 prevented the grant of injunctions against the Crown, and the common law rule that Acts of Parliament are presumed valid could not be displaced by an interim order.
• The absence of any power to grant interim relief meant that the issue was not one of weighing the balance of convenience, and the central question became whether Community law required a national court to override its own rules on remedies.
• The question went to the effectiveness of Community rights in national courts, which only the European Court could resolve, and it was appropriate to refer the question.

Where it fits in the module

Factortame is the key case in the debate on whether Parliament can bind its successors and whether the doctrine of implied repeal still applies to European law. This first judgment shows the orthodox rule that the courts will not suspend an Act, and the second shows its displacement by the European Communities Act 1972. It is used to examine whether the result is a limitation of sovereignty or a rule of construction, and whether sovereignty was lost or only exercised in a new form.

Criticisms

• The decision rests on the presumption of validity of Acts of Parliament, which does not itself explain why a court would be bound to apply an Act that Community law makes invalid.
• The reference to the European Court was an abdication of the domestic court's role in deciding how the 1972 Act affects later legislation, since the question of national constitutional law was for the House.
• The rule against interim relief against the Crown was a technical barrier that left the applicants exposed to irreparable loss while the substantive issue was decided.