Rediffusion (Hong Kong) Ltd v. Sir David C.C. Trench K.C.M.G., M.C. M.D.I. Gass, C.M.G., J.P. D.T.E. Roberts, O.B.E., Q.C., J.P. for and on behalf of Themselves and All Other Members of the Legislative Council of Hong Kong and Another

HCA000507/1968

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 507 OF 1968

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Coram: Hogan, C.J., Huggins, J.

Date of Judgment: 1 June 1968

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Decision on Summons to set aside Writ under o.12 r.8

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1. In this case the plaintiffs sought relief set out in their writ, issued on the 10th April, 1968, in the following terms:-

2. The plaintiffs are a company registered in Hong Kong (hereinafter called "the plaintiffs" or "the Company") and a wholly owned subsidiary of a United Kingdom company. According to an affidavit (hereinafter called "the affidavit") sworn on the 18th April, 1968 by Mr. George Henry Oldridge, the company, of which he is Managing Director, has been carrying on the distribution of broadcast programmes by wire over its distribution system in Hong Kong since about 1947 and the company now distributes sound and television programmes on a commercial basis, the majority of the sound and all the television programmes being originated by the company and certain of the sound programmes being originated by others. The programmes are distributed under licences issued under the Telecommunications Ordinance, issued for sound in 1965 and for television in 1957, both being due to expire on the 13th April, 1973.

3. The sound licence gave to the company:-

"the exclusive right to distribute broadcast messages and programmes, specially intended to be received by the public in general, by means of wires connected to the premises of other persons in the said Colony ........... and to the intent that the subscribers may receive in their respective premises such broadcasts, messages and programmes as transmitted from broadcasting stations included in the official list of broadcasting stations issued by the International Telecommunications Union at Geneva.........".

4. Similarly, the television licence gave to the company:-

5. In August, 1965 the company applied for a licence to broadcast under Section 7 of the Television Ordinance, 1964 but the application was not accepted and a licence was granted to Television Broadcast Limited (hereinafter called "TVB") another company registered in Hong Kong.

6. According to the affidavit, however, satisfactory reception of television signals cannot, because of the mountainous terrain and density of population with many tall blocks of flats and offices, be achieved in many areas of Hong Kong without transmission through wires or the use of special aerials erected on such blocks of flats and offices and in other shadow locations, such aerials being connected by wires to the television receivers.

7. It is desirable at this point to refer to certain expressions which have played a prominent part in the argument before us.

8. The first of these is "relay". According to the documents annexed to the affidavit, "relay" means the reception by an aerial of broadcast matter, be it sound, radio or television, and the re-distribution of this matter by means of a wired network to the premises of persons who either cannot, through technical reasons (such as "shadows") receive the broadcast matter directly by their own individual receivers, or cannot, or choose not to, bear the expense of purchasing a receiver and aerial. The other is the expression "Communal Antenna Television Systems" (CATV), an expression which is said to have originated in America but is now generally understood in Hong Kong to mean aerial devices placed on the roofs of buildings by means of which broadcast television transmissions are received and then re-distributed by means of wires connected to the television receivers or terminal units of individuals in the various parts of the buildings. The need for CATV systems is said to arise, as it does for any other form of relay, where, for technical reasons (usually "shadow areas"), reception of broadcast television by means of ordinary individual receivers is not possible or practical.

9. It is claimed that "a relay system is for all intents and purposes the same as a CATV system. Conversely, a CATV system is a relay system; so much so that the expression 'CATV' and 'relay' are in practice synonymous, the former expression having greater currency in the United States and the latter in the United Kingdom."

10. It is also desirable to note that the sound and television licences of the company contained references to copyright which, in the latter, are expressed as follows:-

The plaintiffs maintain that at the date of the licence there was no such station the television broadcasts of which could have been received and distributed by rediffusion; that the rights just mentioned were intended to be exercisable at some future date; and that the opportunity to exercise them has only now emerged with the advent of another broadcasting service.

11. The affidavit points out that the 1956 Copyright Act in the United Kingdom created, for the first time, a separate copyright in a broadcast distinct from the underlying copyright in the works broadcast but, under the provisions of the Act, to relay a broadcast is not an infringement of the copyright in the broadcast itself, though it could, subject to Section 40(3), be an infringement of the copyright in the works broadcast. Causing the broadcast "to be transmitted to subscribers to a diffusion service", is not included in the list specified by Section 14(4) of "restricted acts", which are to be breaches of this new copyright. Consequently in the United Kingdom, the relay of broadcasts is treated in a manner different from the relay of other copyright matter.

12. Section 31 of the 1956 Act empowers the Queen to extend the Act by Order in Council to Hong Kong and other territories, and in that event sub-section (3) authorises the local legislature to:-

13. The affidavit states that about September 1967 the company learned that the United Kingdom Government intended to extend the 1956 Act to Hong Kong by Order in Council and, also, that the Hong Kong Government intended to introduce an Ordinance to modify the provisions of the Act as extended to Hong Kong. To the affidavit are exhibited copies of a draft Order in Council and a draft Ordinance, which had been sent to the company by the second defendant in the course of correspondence which is also exhibited. The Order in Council, as drafted, proposed to extend Sections 14 and 31(3) of the 1956 Act to Hong Kong but not to extend Section 40(3). The provisions of the Ordinance caused great concern to the company because it purported by Clause 4 to define a television broadcast as having the meaning assigned to it by Section 14 of the 1956 Act and also as meaning:-

"visual images transmitted to the premises of subscribers to a diffusion service over wires or other paths provided by a material substance, together with any sounds transmitted along with those images.".

This, the affidavit claims, was clearly an attempt to enlarge the definition in the 1956 Act and neither a modification or addition relating to procedure or remedies nor otherwise consistent with the requirements of the proviso to Section 31(3) of the 1956 Act. Moreover, Clause 4(2) seeks to provide that it should be an act restricted by the copyright in a television broadcast to broadcast it or cause it to be transmitted to the premises of subscribers to a diffusion service over wires or other paths provided by material substances. This is claimed to be an enlargement of the copyright in television broadcasts as such, since it includes an act which is not restricted by Section 14 of the 1956 Act, and to be in excess of the powers conferred by Section 31(3).

14. The affidavit claims that the effect of passing the Ordinance in this form would seriously affect the company's rights under its licence and would create a position different from that in the United Kingdom and one which, so far as Mr. Oldridge is aware, would differ from that in any other country to which the provisions of the 1956 Act have been extended.

15. He was, he said, advised that it would be unlawful for the Legislative Council of Hong Kong to pass such an Ordinance, as being ultra vires and/or repugnant. Consequently, the company entered into correspondence with the second defendant and it is claimed that in the course of that correspondence the Hong Kong Government vacillated, having first indicated an intention to include then exclude and finally to include the controversial Clause 4(2). It is suggested this vacillation resulted from pressure by TVB. It is also said that the correspondence indicated that the Government and its spokesman, the 2nd Defendant, were not fully aware of the significance of what they were purporting to do or the rights they were purporting to alter.

16. The affidavit states that Clause 4, by creating copyright in the broadcasts themselves as distinct from the copyright in the works broadcast would completely change the position so far as the company is concerned, because if Clause 4(2) becomes law the company would need to clear with their rival the copyright in the broadcasts of TVB quite apart from any copyright in the works broadcast. The affidavit claims that there is no justification for thus altering the law of copyright as it is currently enforceable in the United Kingdom; and that if the British broadcaster has no such right it is difficult to see why a Hong Kong broadcaster should be entitled to it: reference is made in this connection to the European Convention on the Protection of Television Broadcasts which the affidavit says has been ratified by the United Kingdom subject to a reservation withholding in respect of television broadcasts the right to the broadcaster to authorise or prohibit the diffusion of such broadcasts to the public by wire.

17. The present proceedings do not purport to seek any relief in regard to the proposed Order in Council and seek only to declare illegal, and restrain action by the Legislative Council on, the draft local legislation.

18. The defendants have taken out a summons in which they seek the following order:-

19. It is on this summons that we have heard argument by the Solicitor General for the defendants and by Mr. Wells, of Her Majesty's counsel in England, on behalf of the company. In support of his first ground, the Solicitor General referred to the instances in which the Courts in England had been prepared to interfere, or had considered interfering with the Parliamentary process in the United Kingdom. They involved a sovereign legislature - and that is necessarily different from the legislature with which we are concerned here - but, he submitted, they were relevant to the problem before us as indicating how slow the courts should be to interfere with the legislative process. He claimed that interference arose only in two classes of case: the first arose from some allegedly wrong step in the actual legislative process itself, and, as an illustration of that class, he referred us to Harper and Another v. Secretary of State for the Home Department⁽¹⁾.

20. The second class of case in which the courts were, the Solicitor General said, prepared to consider interference in the United Kingdom arose when it was suggested that some individual or body was acting inequitably in seeking the enactment of a private Bill. In such circumstances the courts would be prepared, or at least had been asked, to interfere, and had entertained the possibility of interfering. He referred us to the case of Bilston Corporation v. Wolverhampton Corporation⁽²⁾ as an example of this class of case, and to an article in Vol. 59 of "Law Quarterly Review" by Professor Holdsworth which expressed the view that although there was perhaps such a jurisdiction in regard to private Bills it was a highly suspect jurisdiction. At page 2 of the article, a number of cases where this jurisdiction was said to exist but where in fact no relief was given are conveniently collected. The Professor observed:-

"A principle which the Courts have consistently refused to apply is obviously suspect. In fact it is unsound because it rests on a mistaken analogy to the issue of a common injunction.".

He ended by suggesting that the courts really would have been wiser if, declining to follow earlier dicta, they had finally asserted that there was no such jurisdiction.

21. The Solicitor General then referred to one of the cases mentioned in that article, Heathcote v. The North Staffordshire Railway Company⁽³⁾ where, the jurisdiction having been exercised by the Vice-Chancellor, the Lord Chancellor dissolved the injunction which had been issued but, in the course of deciding to dissolve it, made a statement which is highly indicative of the attitude taken by the courts in England on this question. He said:-

"Upon the first, it has been suggested that this Court could not interfere without infringing upon the privileges of Parliament; so the Courts of Common Law thought at one time; and there is as much foundation for the one as for the other supposition.

In both cases, this Court acts upon the person, and not upon the jurisdiction. In a proper case, therefore, I have said here and elsewhere that I should not hesitate to exercise the jurisdiction of this Court by injunction, touching proceedings in Parliament for a private Bill or a bill respecting property; but what would be a proper case for that purpose it may be very difficult to conceive.".

The Lord Chancellor went on to point out that interference was not justified merely because the Bill in question was seeking an alteration in private rights. Parliament, he said, was supposed to be a place where rights could be altered by legislation, retrospectively if necessary.

22. The Solicitor General also directed our attention to the case of Merricks v. Heathcoat-Amory⁽⁴⁾ where a mandatory injunction was sought commanding the withdrawal from both Houses of Parliament of a draft scheme alleged to be ultra vires the Act under which it purported to be made. Possibly the Solicitor General mentioned this case more for the purpose of illustrating the position through the argument of counsel than for the actual decision itself, because the learned judge, Mr. Justice Upjohn, concluded his ruling by saying:-

"A number of other points of great interest have been argued. Among them was the question whether the court had any jurisdiction and, if so, whether it would be proper in any event to interfere with the proceedings now before Parliament by making an order on the Minister to withdraw the draft scheme or restraining him by order from seeking approval of the scheme.".

He went on:-

"I say no more than this, that I see much force in the arguments put forward by the Attorney General; but in this delicate and difficult branch of the law it is much better not to express an opinion on any matter which does not directly arise for decision.".

The application was dismissed on the ground that the Minister was acting as a Minister of the Crown and no injunction could issue, but the learned Attorney General in the course of his argument in the case had suggested that if the Order sought had been granted, it could amount to an interference with the privileges of Parliament and might indeed be a contempt of Parliament. Mr. Walker-Smith, Q.C., arguing on the other side, said (p.571) :

"To restrain a person from seeking the approval of Parliament, or either House thereof, of a defective scheme, ultra vires the enabling Act, is not to trespass upon or derogate from the sovereignty of Parliament or the right of Parliament to control its own proceedings. In relieving Parliament from the risk of having presented to it for approval by resolution a scheme which is ultra vires, the interference of the court renders a service not only to the parties but to Parliament:".

The case aptly illustrates the conflicting points of view.

23. Mention was made of the Introduction to the 10th Edition of Dicey, by Professor Wade - where he expresses a view on page 44:-

"That the judicial process does not lie where Parliament has exclusive jurisdiction has been recognised by decisions of the courts both in the field of privilege and in Private Bill legislation.".

The Professor went on to claim support for this view from his analysis of the Harper⁽¹⁾ and Bilston⁽²⁾ cases as well as in a passage from Bradlaugh v. Gossett⁽⁵⁾.

24. The Solicitor General then turned to the question of a non-sovereign Parliament, such as the Legislative Council in Hong Kong, and referred us to decisions from New South Wales in Australia as falling into the first category, namely where some improper step was allegedly being taken. In Attorney General for New South Wales v. Trethowan⁽⁶⁾ the applicants contended that failure to refer a Bill to a referendum of the electors in New South Wales would invalidate the next step contemplated, the presentation of the Bill for assent, and they sought to have the respondents restrained from taking that step. Whilst this is a very well-known case, the Solicitor General contended it was not very material to the instant case because, although the questions at issue may, in the lower Courts, have involved one of jurisdiction, they were confined to the merits when the case came to the High Court of Australia and subsequently to the Privy Council. At page 527 of 1932 A.C., the following passage appears:-

"Upon the hearing of the motion, it was demurred to by the defendants upon the grounds (1.) that s.7A, sub-s.6, of the Constitution Act, 1902, was invalid; (2.) that no facts were alleged which gave the plaintiffs any ground for equitable relief; (3.) that having regard to the object of the suit it was not competent.".

The 3rd question was, the Solicitor General said, excluded from consideration by the higher courts. Moreover, he claimed, the value of the case is considerably impugned by subsequent references to it made in Australia, primarily the reference by Sir Owen Dixon, C.J., as he was subsequently, in the case of Hughes and Vale Proprietary Ltd. v. Gair⁽⁷⁾ where he threw doubts on the decision in so far as it can be regarded as a decision at any stage on the question of jurisdiction.

25. The Solicitor General then directed attention to observations on Trethowan's⁽⁶⁾ case and the case of McDonald v. Cain⁽⁸⁾ made by Professor Zelman Cowen in 71 Law Quarterly Review, page 341, where he said:-

"These two recent cases have served only to increase the doubts raised by Long Innes, J. in Trethowan v. Penden⁽⁹⁾ as to the propriety of judicial interference with parliamentary process even where the legislature has itself pointed to the act of presentation as the illegal act. Such a form of drafting might be thought to invite judicial intervention at that stage. Yet if the view put forward by Dixon C.J. in Hughes and Vale Proprietary Ltd. v. Gair⁽⁷⁾ prevails, so that even in such a case a court will refuse to intervene, it would seem to follow that no conceivable form of drafting can empower the courts to intervene by injunction (or presumably by declaration) at this stage of the parliamentary process.".

It was urged that similar doubts as to the propriety of judicial interference are indicated by certain observations made in the subsequent rather lengthy case of Clayton v. Heffron⁽¹⁰⁾, particularly the passage which appears at page 265, where Mr. Justice Kitto said:-

"Considerations of convenience have been thought to justify our expressing our opinions upon that question without staying to decide whether an answer to it favourable to the plaintiffs would have entitled them to any relief in the Supreme Court.".

26. Finally, the learned Solicitor General returned to the English authorities by referring us to the following passage in Hanbury's Modern Equity, 8th Edition page 609:-

"It is submitted that the Court of Appeal was wrong in the Harper⁽¹⁾ case in admitting the possibility of the jurisdiction to restrain a legislative proposal. The cards stacked against it are too strong................................................

It was consideration (c) that led Holdsworth to deny the jurisdiction to issue an injunction to restrain an application for or opposition to a private Bill, where the proceedings are admittedly akin to judicial proceedings." .

Over the page reference is made to the view expressed by Mr. Justice Simonds, as he then was, in the Bilston⁽²⁾ case, that whilst acknowledging the jurisdiction it was difficult to imagine a case in which it would be exercised. The author suggests that the existence of the jurisdiction is supported by the observations of Evershed, M.R. in Harper's⁽¹⁾ case but adds:-

"It is difficult to avoid the comment that the courts seem determined to keep alive in theory something that it will always be impracticable to use in practice.".

27. Against the background of these authorities, the Solicitor General turned to the precise terms in which the writ in this case sought relief. It requests a declaration that it would not be lawful for the Legislative Council of Hong Kong "to pass an Ordinance, provisionally entitled 'A Bill to Modify the Copyright Act 1956' ". Having stressed that the subject matter of the application is identified only by that description, he went on to argue that the Legislative Council in Hong Kong, under the provisions establishing it, the Letters Patent and the Royal Instructions, does not pass Ordinances: what it does is to pass Bills, which do not by the mere act of the Legislative Council move into the sphere of legislation, but remain in the sphere of advice and permission given to the Governor in Hong Kong to enact legislation in the terms of such Bills if he thinks it appropriate to do so; that the action of members of the Legislative Council in debating a measure of this kind and in expressing their views on it is certainly not an illegal act, because, not until the document, the Bill, reaches the stage of legislation - not until the moment of enactment - could it be alleged that there was any illegality through conflict with the Copyright Act. He stressed the indication in Mr. Oldridge's affidavit that the document in question has not even reached the stage of being a Bill, but is no more than a draft. It will, he said, only become a Bill when it receives a first reading from the Legislative Council. He argued that by seeking a declaration from the court at this stage the plaintiffs are seeking to interfere with a lawful activity of the Legislative Council. When asked how a declaration would interfere, he said that it would inhibit debate in the Council: members would feel impeded if they had "hanging over them" a declaration by this court that this particular measure is or would, at a later stage, become invalid. The court, he said, should make no such declaration because it had no jurisdiction in this field. If we understood him rightly, at a later stage in his case he put his submission in a slightly different form: he said that he was asking us "not to entertain jurisdiction" in this field and emphasized that the proper time for challenging the validity of this measure, if it ever reaches the Statute Book, is after enactment, as shown by the observation of Sir Owen Dixon, C.J. in the Hughes⁽⁷⁾ case.

28. In answer to these arguments, Mr. Wells referred us first to the opinion of the Privy Council in Bribery Commissioner v. Ranasinghe⁽¹¹⁾ on appeal from Ceylon where the Board said:-

"A legislature has no power to ignore the conditions of lawmaking that are imposed by the instrument which itself regulates its power to make law.".

This view was expressed to apply whether the legislature was sovereign or not, but the principle is clearly applicable, Mr. Wells said, to Hong Kong, where the legislature is non-sovereign, and where its powers are limited not only by its own constitution but by the power of the Queen in Parliament to enact laws which the local legislature has no power to alter or change; laws which make void and inoperative any local legislation with which they conflict. He argued that the Trethowan⁽⁶⁾ case provides powerful authority for the proposition that, in dealing with the non-sovereign Legislative Council of Hong Kong, the courts have jurisdiction to entertain the relief sought by the plaintiffs here. He contended that this was implicit in the decisions in that case both of the High Court of Australia and of the Privy Council; because if there had been any question of jurisdiction that point would have been raised.

29. We find some difficulty in ascertaining from the report in 1932 A.C. to what extent this question of jurisdiction figured in the decisions of the various courts concerned. Clearly the judge of first instance must have been satisfied that he had jurisdiction or he would not have entertained the application, and subsequent references in the Hughes⁽⁷⁾ case indicate that the question must have been raised in some form at a higher level, because counsel there said:-

"In Trethowan's⁽⁶⁾ case there were five judges in New South Wales who took the view that jurisdiction existed.".

This seems to be borne out by a reference in 71 L.Q.R. (p.337) where Professor Zelman Cowen said:-

"The case raised a number of important points but the question of the availability of the injunction was considered only in the Supreme Court of New South Wales. The terms on which the High Court permitted appeal precluded further consideration of this question.".

30. Having relied strongly on that decision, Mr. Wells drew attention to Montreal City v. Montreal Harbour Commissioners⁽¹²⁾ as indicating that where relief of the kind in question here is sought it should be sought promptly, lest at a later stage his clients should find themselves faced with a contention that they had waived their rights. He emphasized that, on the present summons, the simple question is whether we have jurisdiction, and that we are not concerned with the issue whether that jurisdiction should, in the circumstances now put before us, be exercised or not.

31. In answer to the Solicitor General's contention that what the Legislative Council would be doing - if and when it considers the document which has been furnished to the plaintiffs as a draft Bill - would be a perfectly legal operation. Mr. Wells argued that although it might not be strictly an error in procedure yet if the Legislative Council should take under consideration, and seek to pass as a Bill, something which if and when it gets to the Statute Book would be illegal, all the proceedings up to that point would be tainted proceedings and, consequently, illegal. He said that the distinction which the Solicitor General was seeking to draw between a step in the legislative process and the consideration of tainted subject matter, i.e. a Bill leading to an illegal Ordinance, was not a distinction which could be supported. He submitted that all preliminary steps would be tainted by the subsequent illegality which would supervene if and when the document came to be enacted as legislation.

32. We do not think that the doctrine of the separation of powers, in so far as it is recognised in England, or any other relevant doctrine compels us to hold that we have no jurisdiction under any circumstances to grant an injunction against the members of the Legislative Council. If we were to be satisfied that the Solicitor General is right in his main contention that nothing illegal on the part of the defendants is in contemplation, that would not mean that we had no jurisdiction to enter upon and determine such an issue but simply that there was no occasion for granting relief; we would be precluded from granting it by the absence of grounds for intervention. Turning to his contention that we should not entertain jurisdiction, it may be that there is only a very fine distinction between holding that there is no jurisdiction to give the relief asked and saying that the relief asked is such that the court is unlikely ever to give it. Yet it seems to us that it is a distinction we must recognize. If, as the Bribery Commissioner's⁽¹¹⁾ case so clearly showed, the validity of the legislative process can be subsequently examined and pronounced upon then, leaving aside for a moment the factor of the "hypothetical question", it would seem illogical to say that there is no jurisdiction to pronounce on its prospective exercise. Consequently, we would not set aside the writ on the first of the grounds set out in the summons.

33. We turn then to the second ground. This is divided into two parts: first that the writ seeks a declaration as to hypothetical and future questions and, secondly, that the injunction sought is prohibited under section 16 of the Crown Proceedings Ordinance.

34. Now, in support of the first of these contentions the Solicitor General drew attention to the procedure and the powers prescribed for the Legislative Council by the Letters Patent and the Royal Instructions under which it operates. He stressed the limited role of the Legislative Council, which he described as being "powerfully permissive" with regard to legislation, in that the Governor could not enact legislation without having received the Council's prior advice and consent although he was not under any obligation to enact a measure because it had passed through the Legislative Council as a Bill; he is given a discretion in the matter and, in certain instances, is enjoined not to pass measures which have come through the Legislative Council. In this connection the Solicitor General drew particular attention to Clause XXVI of the Royal Instructions though we would say in passing that we are doubtful whether his argument on this clause was well-founded as the reference in it to measures repugnant to "the law of England" may embrace law which is not extended to Hong Kong.

35. The Solicitor General referred to the case of Re Barnato⁽¹³⁾ as showing that where the matters put before the court are hypothetical the court has no jurisdiction to enter into them and make a declaration of the rights and obligations which would arise if the hypothetical suppositions should come to pass. He placed particular reliance on the observation by Lord Justice Cohen, as he then was, when he said:-

"Counsel for the plaintiffs and counsel for the beneficiaries submitted that it was not really a question whether or not this was the type of case in which the court could entertain proceedings against the Crown, but was really a question of discretion. I do not think that is true, but, even if it were true, I am by no means satisfied that we ought to allow the proceedings to go on ..............".

Mr. Wells subsequently discounted that passage by saying that it was obiter and merely an expression of doubt and nothing more; a description which could not, however, apply to a subsequent observation by the Master of the Rolls, Lord Greene, who concluded his judgment by saying:-

"In my opinion, if it is desired that these courts should have power to decide hypothetical questions on the construction of taxing Acts for the guidance of the subjects of the King, that power ought to be given by legislation and not by this court arrogating it to itself.".

The Solicitor General argued that the word "power" in that passage should be equated with the expression "jurisdiction", so that the Master of the Rolls was clearly of the opinion that the court did not have jurisdiction to deal with hypothetical questions. He argued that just as in that case the court refused to act as legal advisers to trustees who were seeking advice with regard to a position which might arise in the future, the court in the present instance should not seek to act as legal advisers to the Legislative Council in regard to matters which might be put before them.

36. Reliance was also placed on Nixon v. Attorney General⁽¹⁴⁾ which dealt with an application by civil servants for a declaration of rights with regard to pensions. Clauson, J. said the courts were entitled to make declarations only in regard to legal rights and this view, which was, the Solicitor General claimed, endorsed by the Court of Appeal, would indicate that no declaration in the nature of advice to the Crown could be made where, in the absence of a legal right, "the foundation of the jurisdiction to make such a declaration........is gone".

37. He also referred us to the cases of Draper v. British Optical Association⁽¹⁵⁾ where the refusal of the declaration sought would seem to come close to the circumstances of the present case but where there are difficulties in reconciling the reasons advanced for the refusal with the actual terms of the declaration sought, and to Howard v. Pickford Tools Co. Ltd.⁽¹⁶⁾ where continued performance of a contract by an employee, after the other side had allegedly repudiated it, debarred him from obtaining a declaration as to what his rights would have been if he had accepted the repudiation. Neither case seems to throw much light on the question whether the refusal of relief should have been ascribed to lack of jurisdiction to grant it as distinct from the exercise of a discretion or a decision that the circumstances did not warrant relief. In the Howard⁽¹⁶⁾ case, Lord Evershed, M.R. said, with reference to the legislation which authorises the court to make declaratory judgments,:-

Asquith, L.J. said:-

"I agree. An unaccepted repudiation is a thing writ in water and of no value to anybody: it confers no legal rights of any sort or kind. Therefore a declaration that the defendants had repudiated their contract with the plaintiff would be entirely valueless to the plaintiff if it appeared at the same time, as it must appear in this case, that it was not accepted.".

At times the language used seems to suggest a lack of jurisdiction but the substance of the judgment appears to imply a decision on the merits.

38. That the courts have not been entirely consistent in their approach to this question would appear to emerge from the cases collected in a useful work entitled "The Declaratory Judgment" by I. Zamir to which the Solicitor General directed our attention and on which he relied for his contention that any of the following matters, each of which he argued was present in the instant case, would take it out of the jurisdiction of the courts:-

39. Mr. Wells, on the other side, said that he had never seen the rule under which the summons was taken out - Order 12 rule 8 - used to obtain the relief sought in this case on grounds such as those advanced in the present proceedings. He claimed that the court should be very slow to stifle proceedings by using that rule to set aside a writ in any circumstances, and went on to maintain that far from the facts on which reliance was placed in the present case being hypothetical they were very certain; that it had been clearly indicated to the plaintiffs that it was the intention of the officers against whom relief was sought to introduce and pass legislation along the lines shown in Mr. Oldridge's affidavit; that if such legislation was introduced and enacted then the plaintiffs would suffer much damage and that it was of considerable importance to them now to know where they stood so that they would not incur the very heavy additional expenditure currently contemplated by the company but which would not be justified if they were going to be faced at a later stage by an enactment which would destroy the basis on which it had been planned.

40. He relied particularly on the decision in Guaranty Trust Company of New York v. Hannay & Co.⁽¹⁷⁾ for the proposition that the courts would make a declaration even though no cause of action had actually arisen at the time when the declaration was made. He went on to argue that Re Barnato⁽¹³⁾ (supra) was concerned with a remote contingency whereas in the present instance he and his clients are concerned with a very proximate contingency: an immediate prospect of something happening which would seriously damage them. He claimed there is a threat hanging over them and they are entitled to know where they stand in regard to it.

41. We have found this particular issue difficult. Some of the difficulty arises from the history of declaratory judgments themselves and the long standing reluctance of the English Courts to enter into this field. They have been slow to do so although they have been encouraged by the enactment of legislation in the form of rules of Court enabling them to make declaratory judgments in circumstances where they had previously declined to do so because the declaration was not annexed to any other claim for relief. In our consideration of the problem we have derived considerable assistance from Mr. Zamir's recent book⁽¹⁸⁾. It says:-

"The declaratory jurisdiction has sometimes been represented as virtually unlimited. Thus, in a recent case Denning L.J. (as he then was) said: 'I know of no limit to the power of the court to grant a declaration except such limit as it may in its discretion impose upon itself'.".

This observation, which is taken from Barnard v. National Dock Labour Board⁽¹⁹⁾, does raise a question whether a court can arbitrarily limit its jurisdiction as distinct from setting limits on the type of case in which, in its discretion, it will exercise an undoubted jurisdiction. The author goes on to refer to the statement by Mr. Justice Joyce in North Eastern Marine Engineering Co. v. Leeds Forge Co.⁽²⁰⁾ where he said:-

"To the operation of that rule" (i.e. o.25 r.5) "there must be some limitation. It cannot, I think, compel the Court to entertain any and every action for a declaration, and it cannot be that a claim for any declaration whatsoever it may be is a good ground of action.".

The author then proceeds to examine the limiting factors which the courts had observed in dispensing declarations and lists the factors already mentioned by the Solicitor General under the classification of theoretical issues, i.e. absence of a dispute in existence etc. In the layout of his book the author treats that as going to jurisdiction but in his text he says this⁽¹⁸⁾ :-

"Yet, though the courts have so far rejected all claims for declarations on theoretical issues, it is not entirely free from doubt whether they have done so because of lack of jurisdiction, or rather because they have objected, in their discretion and as a matter of practice, to making theoretical declarations.".

In a footnote on the same page, he says:-

"The view that the courts have no jurisdiction to declare upon theoretical issues may be supported by opinions expressed in Re Clay⁽²¹⁾ and in Re Barnato⁽¹³⁾. But in many other cases, e.g. in Re Carnarvon Harbour Acts⁽²²⁾ ............ and in Faber v. Gosworth Urban District Council⁽²³⁾ .................... in which the issues were clearly hypothetical, the courts, though declining to make the declarations, treated the claim as if it was within their jurisdiction and subject to their discretion.".

Elsewhere, in criticising the decision in Faber v. Gosworth Urban District Council⁽²³⁾ on other grounds, he brings out very clearly the great advantage which would have accrued to the plaintiffs in that case if they could have obtained a declaration as to their rights before embarking on heavy expenditure which might prove to be abortive, the question being whether certain sewers if constructed could be joined to the main sewer which was under the control of the District Council. The declaration was refused because "not a brick had been laid, and no step has been taken towards the construction of the sewers.". However inconvenient, this decision would appear to reflect the exercise of a discretion rather than the absence of jurisdiction but both it and the Carnarvon Harbour⁽²²⁾ case are decisions of a court of first instance, whilst Barnato⁽¹³⁾ and Clay⁽²¹⁾ were decisions in the Court of Appeal. However, in Thorne v. Motor Trade Association⁽²⁴⁾ the House of Lords seems to have accepted that there is jurisdiction and even that, in exceptional circumstances, a declaration will be made although the question is hypothetical, at least in the sense that there is no dispute between the parties. Lord Wright said:-

"Whether a declaratory judgment should be made is in any case a matter of the Court's discretion.".

42. Also it appears to be generally accepted that the court will deal by declaration with "future rights". But, as Mr. Zamir points out (p.203), the dividing line between hypothetical issues and future rights is at times very thin and difficult to draw. Anything which is going to arise in the future inevitably involves something hypothetical; no matter how certain it appears at the moment there is always the possibility that it may not occur. In practice, he suggests, the line is drawn if the event in question is reasonably certain to occur. If it is reasonably certain it is a "future right"; if not reasonably certain, then it is hypothetical. There must be considerable practical difficulties in limiting jurisdiction by a line so fine and difficult to draw. Opinions of judges could well differ as to precisely where such a line might lie and such a question seems far more suitable for the exercise of discretion than as a determinant of jurisdiction.

43. We have, as indicated earlier, found difficulty in this particular question but, with some hesitation, we have come to the conclusion that the refusal by the courts to make declarations in particular circumstances because the questions put to them are "hypothetical" does not mean that the courts have no jurisdiction to enter into that field no matter how rare or exceptional their entries may have been in the past, but should properly be regarded as an exercise of discretion by the courts. On that account, we would not uphold the application that the writ should be set aside on the strength of the first contention set out in (b) of the summons. The Solicitor General agreed that he could not succeed on the second alone.

Representation:

Wells Q.C., Skone James and Wright (Brutton and Co.) for Plaintiffs.

Sneath S.G., Hogg and Hoosen C.C. for 1st and 2nd Defendants.

(1) (1955) 1 All E.R. 331

(2) (1942) Ch.D. 391

(3) 42 E.R. 39 at 43; 2 Mac. & G. 100 at 109.

(4) (1955) Ch.D. 567

(5) (1884) 12 Q.B.D. 271

(6) (1931) 44 C.L.R. 394

(7) 90 C.L.R. 203

(8) (1953)Argus L.R. 965

(9) (1930) 31 S.R. (N.S.W.) 183

(10) 105 C.L.R. 214

(11) (1965) A.C. 172

(12) (1926) A.C. 299

(13) (1949) 1 All E.R. 515 at 520

(14) (1930) 1 Ch.D. 566 at 575

(15) (1938) 1 All E.R. 115; 54 T.L.R. 245

(16) (1951) 1 K.B. 417

(17) (1915) 2 K.B. 536

(13) (1949) 1 All E.R. 515

(18) The Declaratory Judgment pages31, 44

(19) (1953) 2 Q.B. 18, 41

(20) (1906) 1 Ch.324,328

(21) (1919) 1 Ch.66,79

(22) (1937) Ch. 72,80

(23) (1903) 88 L.T. 549

(24) (1937) A.C. 797.