R v Secretary of State for Transport, Ex p Factortame Ltd (Factortame Ltd v Secretary of State for Transport)

Domestic law did not authorise interim relief whose effect would be to suspend unambiguous primary legislation and confer rights directly contrary to it while those rights remained unresolved. Section 31 of the Supreme Court Act 1981 did not create jurisdiction to grant an interim injunction against the Crown.

Where existing European Court authority did not determine whether Community law nevertheless required or permitted effective interim protection against irremediable harm, a final national court had to refer that question under article 177 of the Treaty of Rome. If directly enforceable Community rights were ultimately established, section 2 of the European Communities Act 1972 required inconsistent registration restrictions to take effect subject to those rights.

The appellants owned or managed fishing vessels which had formerly been registered as British vessels. Part II of the Merchant Shipping Act 1988 introduced nationality, residence, ownership and control requirements which prevented the vessels from being re-registered after the transitional period.

The appellants sought judicial review, alleging that the new regime infringed directly enforceable Community rights. The Divisional Court decided to request a preliminary ruling on the substantive Community-law questions and granted interim relief disapplying the registration regime. The Court of Appeal set that order aside.

The appeal in R v Secretary of State for Transport, Ex p Factortame Ltd concerned whether an English court could protect the asserted rights pending the European Court's ruling. The central questions were whether domestic law authorised such relief and, if it did not, whether Community law obliged or empowered the national court to grant it.

1. Disposition. Lord Bridge of Harwich delivered the leading speech, with which Lord Brandon of Oakbrook, Lord Oliver of Aylmerton, Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreed. The House unanimously referred questions to the European Court of Justice under article 177 of the Treaty of Rome and adjourned further consideration of the appeal pending its preliminary ruling.

2. Effect of established Community rights. Per Lord Bridge, sections 2(1) and 2(4) of the European Communities Act 1972 required Part II of the Merchant Shipping Act 1988 to be construed and take effect subject to directly enforceable Community rights. If the appellants ultimately established the asserted rights, those rights would prevail over the registration restrictions and the Divisional Court would have to grant appropriate declaratory relief.

3. No domestic power to suspend primary legislation. Per Lord Bridge, the ordinary interim-injunction principles associated with American Cyanamid Co v Ethicon Ltd [1975] A.C. 396 did not answer the case. The dispute concerned law rather than contested facts, and the proposed order would not merely preserve the position. It would require the Secretary of State to treat the vessels as registered in direct contravention of an unambiguous Act, thereby conferring uncertain rights for the entire period before the European ruling. English law supplied no power to make an order having those consequences.

4. Enforcement proceedings distinguished. Lord Bridge accepted that a court whose assistance was required to enforce disputed legislation could, in an appropriate case, stay its hand. A prosecution or forfeiture proceeding under section 22 of the Merchant Shipping Act 1988 could therefore be stayed pending a preliminary ruling. Such a stay would suspend rather than defeat the proceeding. This distinguished F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1973] A.C. 295 from an order requiring executive action contrary to primary legislation.

5. Injunctions against the Crown. Per Lord Bridge, section 31(2) of the Supreme Court Act 1981 did not confer a new jurisdiction to grant interim injunctions against the Crown. Its history, its identity with the earlier procedural rule and its interaction with section 31(3) showed that it addressed final relief. The contrary views in R v Secretary of State for the Home Department, Ex p Herbage [1987] Q.B. 872 and R v Licensing Authority, Ex p Smith Kline & French Laboratories Ltd (No 2) [1989] 2 W.L.R. 378 were erroneous. The absence of jurisdiction supplied an additional domestic-law reason why the Divisional Court's order could not stand.

6. Community-law question reserved. Per Lord Bridge, the existing European authorities concerned established rights and did not determine whether putative, disputed Community rights had to receive interim protection. In light of the principles in Srl Cilfit v Ministry of Health (Case 283/81) [1982] ECR 3415, the House could not decide that novel question itself. It referred whether Community law obliged or empowered a national court lacking domestic power to grant protection where refusal was likely to cause irremediable damage, and, if a power existed, what criteria governed its exercise.

1. House of Lords: In [1990] 2 AC 85, the House unanimously referred the interim-protection questions to the European Court of Justice and adjourned further consideration of the appeal.
2. Court of Appeal: On 16 March 1989, the court allowed the Secretary of State's appeal, set aside the Divisional Court's interim order and granted leave to appeal to the House of Lords.
3. Divisional Court: On 10 March 1989, the court decided to seek a preliminary ruling on the substantive Community-law issues. Pending that ruling, it ordered that Part II of the Merchant Shipping Act 1988 and the Merchant Shipping (Registration of Fishing Vessels) Regulations 1988 be disapplied in relation to the appellants.