VIP Communications Ltd (In Liquidation), R (On the Application Of) v The Secretary of State for the Home Department

A statutory power requiring a regulator to carry out its functions in accordance with ministerial directions does not, without clear words, authorise a direction requiring the regulator not to comply with a statutory duty imposed by the same or another statute. The words carry out cannot be extended to mean not carry out. A perceived legislative gap cannot justify a strained construction conferring extensive executive powers. The Secretary of State could instead direct the imposition of national-security conditions on an exemption under Wireless Telegraphy Act 2006, section 8(3).

VIP Communications Ltd challenged a Direction given by the Secretary of State under section 5(2) of the Communications Act 2003. The Direction prevented Ofcom from exempting commercial multi-user gateways from the individual licensing requirement under section 8(4) of the Wireless Telegraphy Act 2006. Morris J quashed the Direction as ultra vires: [2019] EWHC 994 (Admin). The Secretary of State appealed, arguing that section 5(2) authorised the Direction in the interests of national security and that the contrary construction created a legislative lacuna. The central issue was whether the power to direct Ofcom’s functions extended to directing it not to perform its statutory exemption duty.

The appeal was dismissed. The Direction was ultra vires the Secretary of State’s powers.

1. The Court, per Lord Justice Flaux, held that a statutory power to direct a regulator to carry out its functions in accordance with ministerial directions does not, without clear words, extend to a direction requiring non-compliance with a statutory duty. The principle applies beyond cases concerning fundamental rights. The Court relied on the reasoning exemplified by EE Ltd v Office of Communications [2017] EWCA Civ 1783.
2. Parliament had expressly provided elsewhere how conflicting statutory duties were to be resolved. Section 154(4) of the Communications Act 2003, section 3(5) of the Wireless Telegraphy Act 2006 and section 94(3) of the Telecommunications Act 1984 demonstrated that drafting technique. No equivalent qualification was made to the exemption duty in section 8(4) of the Wireless Telegraphy Act 2006.
3. The words carry out in section 5(2) of the Communications Act 2003 referred to functions actually performed by Ofcom. They could not be extended to include not carrying out those functions. The first paragraph of the Direction therefore sought to prevent Ofcom from complying with section 8(4), which required exemptions when the conditions in section 8(5) were satisfied.
4. The express limitations in section 5(3) to (4A) did not imply an additional power to override statutory duties. The expressio unius maxim was not sufficient to establish such a power. Nor could a perceived gap in national-security protection justify strained construction. As explained in J v Welsh Ministers [2018] UKSC 66, the remedy for any lacuna was legislation.
5. There was in any event no lacuna. Under section 8(3) of the Wireless Telegraphy Act 2006, the Secretary of State could direct Ofcom to impose national-security conditions on exemptions. The second and third paragraphs of the Direction could be addressed in that way; only the first paragraph exceeded the statutory power. Lady Justice Macur and Lord Justice Underhill agreed.

• Court of Appeal (Civil Division) — [2020] EWCA Civ 1564: dismissed the Secretary of State’s appeal and upheld the conclusion that the Direction was ultra vires.
• High Court of Justice, Queen’s Bench Division, Administrative Court — Morris J, [2019] EWHC 994 (Admin): quashed the Direction as unlawful.