Phonepayplus Ltd v Ashraf & Anor

Under the Communications Act 2003, an enforcement authority may enforce an approved premium-rate-services code, including recovery of fines and administrative charges imposed under it. The statutory reference to directions given under an approved code is sufficiently broad to include enforcement of sanctions imposed by the code. A code should, where possible, be construed as operating subject to statutory limits on penalties, including appropriateness, proportionality and the maximum penalty. Those limits may be implicit even if the code does not reproduce them expressly. A composite penalty for several contraventions is not thereby invalid. A registered provider cannot ordinarily resist enforcement by asserting that the registration details were false, and the court will not reopen the amount of an unappealed penalty absent a properly arguable error.

Phonepayplus Limited sought recovery from the first defendant of an £85,000 fine and related administrative charges imposed by its adjudication Tribunal for breaches of the premium-rate-services code approved by OFCOM under the Communications Act 2003. The second defendant had transferred property into her name, but that transfer was reversed and she took no further part.

The court determined a preliminary issue concerning whether Phonepayplus, rather than OFCOM, was the proper claimant. It also heard Phonepayplus’s application for summary judgment and the defendant’s proposed statutory and ultra vires challenges to the code, the penalty and the Tribunal’s jurisdiction to impose a composite fine.

1. The court found for Phonepayplus on the preliminary issue and granted summary judgment. The first defendant had no real prospect of successfully defending the claim.

2. The reference in section 120(3)(a) of the Communications Act 2003 to directions given under an approved code was to be read in the context of the statutory scheme as a whole. It was wide enough to include enforcement by the enforcement authority of fines and administrative charges imposed under the code. The court followed ICTIS v. Andronikou, [2007] EWHC 2307 (Admin).

3. The code was not ultra vires because it did not expressly reproduce the limitations in section 123(2). Those limitations were implicit in the code. The court applied the reasoning in Bunney v. Burns Anderson plc, [2008] Bus. L.R. 22, and relied on the principle that, where possible, an instrument should be construed so that it has effect rather than is rendered void, as illustrated by R v. Institute of Chartered Accountants in England and Wales ex parte Nawaz, 25 April 1997, unreported (CA). A fine under the code and a penalty under the Act had no substantial difference in meaning in this context. The requirements of appropriateness and proportionality applied notwithstanding their omission from the code’s express wording.

4. The absence of an express statutory provision authorising one composite fine for several contraventions did not invalidate the Tribunal’s single fine. It was proper and fair for the Tribunal to assess the contraventions in the round.

5. The defendant’s registration as the relevant provider, and his failure to deny that status before the Tribunal, left no triable issue on provider status. The court would not reassess the amount of the fine in enforcement proceedings where the penalty had not been appealed or reviewed and no manifest error had been shown.

6. Permission to amend the defence was granted because the application concerned legal points in summary-judgment proceedings, the defence had been foreshadowed, and the proceedings concerned recovery of quasi-criminal penalties. The amendment principles in Swain-Mason v. Mills & Reeve, [2011] EWCA Civ 14, were applied.

Not stated in the judgment.