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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Secretary of State for the Environment, Transport and the Regions and Another, Ex Parte Spath Holme Limited, R v. [2000] UKHL 61; [2001] 1 All ER 195; [2001] 2 WLR 15 (7th December, 2000) URL: http://www.bailii.org/uk/cases/UKHL/2000/61.html Cite as: [2000] UKHL 61, [2001] 1 EGLR 129, [2000] NPC 139, [2000] EGCS 152, [2000] EG 152, [2001] 1 All ER 195, (2001) 33 HLR 31, [2001] 2 WLR 15, [2001] 2 AC 349

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Secretary of State for the Environment, Transport and the Regions and Another, Ex Parte Spath Holme Limited, R v. [2000] UKHL 61; [2001] 1 All ER 195; [2001] 2 WLR 15 (7th December, 2000)

HOUSE OF LORDS

Lord Bingham Of Cornhill Lord Nicholls of Birkenhead Lord Cooke of of Thorndon Lord Hope of Craighead Lord Hutton

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

ON 7 DECEMBER 2000

LORD BINGHAM OF CORNHILL

My Lords,

    On 11 and 8 January 1999 the Secretary of State for the Environment, Transport and the Regions and the Secretary of State for Wales (to whom I shall together refer as "the ministers") made The Rent Acts (Maximum Fair Rent) Order 1999 (S.I. 6/1999) ("the Order"), which applied to England and Wales. They did so in the exercise of powers expressed to be conferred on them by section 31 of the Landlord and Tenant Act 1985. Spath Holme Limited, a landlord, sought to challenge the Order, contending (among other things) that section 31 of the 1985 Act did not give the ministers power to make it. Permission to apply for judicial review was refused by the single judge, but granted by the Court of Appeal which, at a further hearing, accepted Spath Holme's contention and quashed the Order. The main question in this appeal to the House is whether the Court of Appeal was right to hold that section 31 gave the ministers no power to make the Order.

    In paragraphs 3 - 13 of its judgment ([2000]) 3 WLR 141) the Court of Appeal has helpfully summarised the facts in clear and uncontentious terms. A further account of the statutory history and certain decisions of the courts is given by the Court of Appeal in Curtis v. London Rent Assessment Committee [1999] QB 92. I give here a brief account of the context in which the present problem arises.

    During the last century England and Wales suffered from a persistent shortage of housing. The demand, in particular for private rented accommodation, was greater than the supply. This enabled some private landlords to exploit the scarcity of what they had to let by exacting exorbitant rents and letting on terms disadvantageous to the tenant. A series of statutes, beginning in 1915, sought to address this problem, by controlling the rents which could be charged and affording security of tenure to tenants. This control, beneficial though it was in many ways, tended by its very effectiveness to exacerbate the problem: the financial return to the landlord was at times so modest that there was very little incentive to let accommodation to private tenants, with the result that the supply of accommodation available for private letting tended to shrink. Thus statutes were passed with the object of giving landlords a return sufficient to induce them to make accommodation available.

    The Rent Act 1965 was intended to revitalise the market in privately rented accommodation by introducing a new regime of what were called fair rents. These provisions were consolidated in the Rent Act 1968, extended in the Rent Act 1974 and consolidated in the Rent Act 1977, which remains in force. Section 70 of that Act governs the assessment of fair rents, which are to be open market rents adjusted to discount for scarcity and to disregard certain matters specified in section 70(3). While the statute does not in terms refer to open market rents, that has been held by the Court of Appeal to be the proper starting point in the process of assessing and registering a fair rent under the 1977 Act: see Spath Holme Ltd. v. Chairman of the Greater Manchester and Lancashire Rent Assessment Committee (1995) 28 HLR 107; Curtis v. London Rent Assessment Committee, above.

    In giving effect to this statutory regime, rent officers and rent assessment committees faced the practical difficulty that there was no open market in unregulated privately-rented property with which comparison could be made. The years following 1965 were also years of very high inflation. The result was that rents set by rent officers and rent assessment committees did not keep up with inflation, to the benefit of tenants but to the obvious disadvantage of landlords. So the problem which Parliament had sought to address in 1965 once more became acute, and the market in privately-rented accommodation declined. By the Housing Act 1988 it was again sought to stimulate a free market in such accommodation by providing for assured and assured shorthold tenancies, which (subject to a limited safeguard for some tenants) provided for rents to be negotiated and agreed between landlord and tenant. Regulated tenancies under the Rent Act 1977 continued to exist, but no new regulated tenancies were to come into existence.

    The 1988 Act had its desired effect of tempting private landlords back into the market. But it also had another effect, important for present purposes, of giving rise to rents negotiated between landlord and tenant in the market. Whereas rent officers and rent assessment committees had previously relied on other registered fair rents as the basis of comparison when setting new fair rents, there was now available a range of comparators, drawn from the market, on which they could rely (subject to making the adjustments required by statute) instead of the less factual basis of previously registered fair rents. In most areas, rent officers and rent assessment committees took advantage of this new basis of comparison in undertaking their statutory task, but in some areas (notably London and the North West) they were reluctant to do so. In these areas the gap between registered fair rents and open market rents increased, to the point where the former were at a level about half the latter, even in the absence of scarcity. In the two judgments already mentioned the Court of Appeal clearly laid down the correct approach to the assessing of fair rents, and at last even the rent officers and rent assessment committees who had previously been reluctant to do so gave effect to the basis of assessment prescribed by the 1977 Act. This had the unfortunate side-effect that tenants whose rents had previously been registered at levels well below the adjusted open market level at which they should have been set suffered very sharp and unexpected increases in the rent payable.

    The Minister for London and Construction made a statement on this subject in the House of Commons in January 1998, expressing the government's concern about the disproportionate increases which some regulated tenants had suffered, and a consultation paper was issued in May 1998 outlining the options which had been identified and the action which the government provisionally favoured. The options were: to do nothing and allow rent officers to continue to set fair rents in accordance with section 70 of the 1977 Act; to provide for a phasing of the rent increases over a period of 2 to 3 years; or to apply a maximum limit linked to the retail price index to increases in rents which had already been registered, but excluding lettings where a substantial increase in rent was attributable to repairs or improvements carried out by the landlord. The consultation paper made plain the government's provisional preference for the third of these options, which would be given effect by exercising the reserve power in section 31 of the Landlord and Tenant Act 1985.

    Not surprisingly, tenants and tenants' associations supported the third option, while seeking a maximum percentage increase smaller than the government had proposed. Landlords and their associations favoured the first, or failing that the second, option. They opposed the third. This was understandable: since the cap was not to apply to rents registered for the first time, the third option if adopted would have the consequence that landlords who had previously been receiving a registered rent lower than it should have been if the rent had been assessed on the correct basis, and who had thereby been subsidising their tenants, were liable to suffer further loss through denial of the full increase to which adoption of the correct, adjusted market value, basis of assessment would have entitled them.

    Following public consultation, the government adopted the third option, subject to a reduction in the maximum percentage increase as sought by tenants. The Order was accordingly made by the ministers, "in exercise of the powers conferred upon them" by section 31 of the 1985 Act. It contained a formula set out in article 2 of the Order, the effect of which is best summarised. On the first application for registration after the Order had come into effect, the permitted increase in a registered fair rent would be five per cent, if the retail price index had increased by five per cent over the two year period since the last registration, plus 7.5 per cent. Thereafter any subsequent increase over a two-year period would be five per cent plus the difference in the retail price index. The Order would only apply where there was an existing registered rent when the Order came into effect, and it would not apply where, because of repairs or improvements carried out by the landlord, the fair rent exceeded by at least fifteen per cent the previous registered rent. Article 3 of the Order and the Schedule provided that The Rent Act 1977 should be modified by inserting a new paragraph into Schedule 11 of the 1977 Act. That is the Schedule which governs applications for the assessment and registration of fair rents by rent officers and rent assessment committees. The new paragraph provides:

"(a) the rent officer, in considering what rent ought to be registered, shall consider whether that article [article 2] applies; and

(b) where a matter is referred to them, the committee shall consider whether that article applies and, where it does apply, they shall not, subject to paragraph (5) of that article, confirm or determine a rent for the dwelling-house that exceeds the maximum fair rent calculated in accordance with that article."

    Section 31 of the 1985 Act, relied on as the source of power to make the Order, is headed "Miscellaneous" and has a sidenote "Reserve power to limit rents". The section reads:

"(1) The Secretary of State may by order provide for -

(a) restricting or preventing increases of rent for dwellings which would otherwise take place, or

(b) restricting the amount of rent which would otherwise be payable on new lettings of dwellings;

and may so provide either generally or in relation to any specified description of dwelling.

"(2) An order may contain supplementary or incidental provisions, including provisions excluding, adapting or modifying any provision made by or under an enactment (whenever passed) relating to rent or the recovery of overpaid rent.

"(3) In this section -

"new letting" includes any grant of a tenancy, whether or not the premises were previously let, and any grant of a licence;

"rent" includes a sum payable under a licence, but does not include a sum attributable to rates or, in the case of dwellings of local authorities or new town corporations, to the use of furniture, or the provision of services;

and for the purposes of this section an increase in rent takes place at the beginning of the rental period for which the increased rent is payable.

"(4) An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."

    At issue in this appeal is the scope of the order-making power conferred by section 31: to what (if any) limits is that power subject?

    Mr. Bonney QC for Spath Holme rightly reminded us that no statute confers an unfettered discretion on any minister. Such a discretion must be exercised so as to promote and not to defeat or frustrate the object of the legislation in question. Counsel relied on Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997 at 1030 where Lord Reid said:

"Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act; the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the court. In a matter of this kind it is not possible to draw a hard and fast line, but if the Minister, by reason of his having misconstrued the Act or for any other reason, so uses his discretion as to thwart or run counter to the policy and objects of the Act, then our law would be very defective if persons aggrieved were not entitled to the protection of the court. So it is necessary first to construe the Act."

Counsel also referred us to the endorsement by Lord Bridge of Harwich, with the concurrence of the other members of the committee, of a passage under the heading "No unfettered discretion in public law" in Professor Sir William Wade's Administrative Law (5th ed., 1982) pages 355-356 in Reg. v. Tower Hamlets London Borough Council, Ex parte Chetnik Developments Ltd. [1988] AC 858 at 872; to observations of Lord Bridge in Reg. v. Secretary of State for the Environment, Ex parte Hammersmith and Fulham London Borough Council [1991] 1 AC 521 at 597; and to the opinion of Lord Ackner in Reg. v. Secretary of State for the Home Department, Ex parte Brind [1991] 1 AC 696 at 761. The soundness of these principles is not in doubt. The object is to ascertain the statutory purpose or object which the draftsman had in mind when conferring on ministers the powers set out in section 31.

    The starting point must be section 31 of the 1985 Act, quoted above. The 1985 Act consolidated provisions of the law of landlord and tenant formerly found in the Housing Acts and the Landlord and Tenant Act 1962, with amendments to give effect to recommendations of the Law Commission. It contained a series to provisions giving tenants the right to be told the identity and address of their landlord and the identity and address of the directors of a corporate landlord, imposing on landlords a duty to give notice to tenants of an assignment, requiring the provision of rent books for certain tenants and prescribing particulars to be contained in rent books, creating offences for breach of some of these provisions by landlords, implying terms in some lettings that premises should be fit for human habitation, extending the implied term of fitness to certain agricultural occupancies, implying covenants by the landlord to repair in certain specified lettings and regulating the service charges recoverable by landlords. Section 31 was followed by a section which, in subsection (3), provided:

"Section 31 (reserve power to limit rents) does not apply to a dwelling forming part of a property subject to a tenancy to which Part II of the Landlord and Tenant Act 1954 applies; but without prejudice to the application of that section in relation to a sub-tenancy of a part of the premises comprised in such a tenancy."

There followed statutory definitions and formal provisions. All the provisions of the Act were directed to the relationship which exists between landlords and tenants, and all were intended to strengthen the rights of the tenant and protect the tenant against various forms of potential disadvantage or exploitation. But, because the Act covered a number of aspects of the landlord-tenant relationship, one cannot discern any very specific unifying scheme in the legislation. I do not find, studying the language of section 31, that it is in any way ambiguous or obscure, or such as to lead to absurdity if given its full apparent effect. But Mr. Bonney is correct in his submission that the language is, on its face, very broad. It applies to lettings of dwellings of every kind, no matter who is the landlord or what the nature of the tenancy (subject only to the exception in section 32(3)); it places no limit on the restrictions which the minister may impose on rental payments; it provides only for annulment on negative resolution; and it gives no indication of the circumstances in which Parliament contemplated that the order-making power should be exercisable. One learns only, from the sidenote and the reference in section 32(3), that this is a reserve power, which indicates that it is not a power to be exercised very readily or routinely.

    Mr. Bonney submitted that, faced with language of this breadth, the courts should apply certain presumptions. The first of these is that, since Parliament does not lightly delegate to the executive the power to amend primary legislation, such a provision should be narrowly and strictly construed and any doubt resolved in favour of the narrower rather than the broader interpretation. He placed reliance on McKiernon v. Secretary of State for Social Security (Court of Appeal, unreported, 26 October 1989, CAT No.1017) where Lord Donaldson of Lymington MR said (at page 10B of the transcript):

"Subordinate legislation, at any rate when subject to the negative resolution procedure, represents the will of the Executive exercised within limits fixed by primary legislation. Whether subject to the negative or affirmative resolution procedure, it is subject to much briefer, if any, examination by Parliament and cannot be amended. The duty of the courts being to give effect to the will of Parliament, it is, in my judgment, legitimate to take account of the fact that a delegation to the Executive of power to modify primary legislation must be an exceptional course and that, if there is any doubt about the scope of the power conferred upon the Executive or upon whether it has been exercised, it should be resolved by a restrictive approach."

This principle was endorsed by this House in Reg. v. Secretary of State for Social Security, Ex parte Britnell [1991] 1 WLR 198 at 204. Recognition of Parliament's primary law-making role in my view requires such an approach. But it is an approach which is only appropriate where there is a genuine doubt about the effect of the statutory provision in question. Here, the language used seems on its face to leave little room for doubt about the scope of the power in section 31(2).

    The second presumption relied on is that Parliament does not intend to take away or prevent the exercise of any property right without compensation unless clear and unambiguous words are used. Counsel for Spath Holme relied on Westminster Bank Ltd. v. Minister of Housing and Local Government [1971] AC 508 at 529, where Lord Reid accepted that if there was any reasonable doubt the subject should be given the benefit of it. This presumption (it was submitted) was fortified by the presumption that Parliament would intend to legislate in conformity with the European Convention on Human Rights, and in particular Article 1 of the First Protocol:

"Protection of property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

Counsel submitted that section 31 left the imposition of any restriction so completely to the discretion of the minister that the conditions for exercise of the power were not "provided for by law". In support of this submission he referred the House to Sunday Times v. United Kingdom (1979) 2 EHRR 245 at 270-273; Silver v. United Kingdom (1983) 5 EHRR 347 at 371-3; and Malone v. United Kingdom (1984) 7 EHRR 14 at 39-41. I have no doubt that clear and unambiguous words should be used if the citizen is to be deprived of his property without compensation and any reasonable doubt should be resolved in his favour. But a power to restrict or prevent increases of rent which would otherwise take place or restrict the amount of rent which would otherwise be payable on a new letting must of necessity deprive the landlord of rent which he would, but for the minister's order, receive. The words used are capable of no other construction. As to the European Convention, Mr. Kenneth Parker QC for the ministers pointed out that the presumption in question is a weak one: see Lester and Pannick, Human Rights Law and Practice (Butterworths 1999), paragraph 4 .19.14; Clayton and Tomlinson, The Law of Human Rights (Oxford, 2000) at paragraph 18.73. Any measure restricting rents, or prices or charges of any kind, must have the effect of depriving the recipient of what he would otherwise receive, but the European Court of Human Rights has respected the need for national authorities to strike a balance between the rights of individuals and the general interest of the community. This would appear to be such an instance. As for the requirement that the condition of any restriction be provided for by law, it seems clear that one must look not at the empowering condition, which until exercised has no effect on the rights of the citizen, but at the terms of any order made under it. In this case Spath Holme's complaint is not so much that the terms of the Order are unclear as that they are all too clear.

    Mr. Bonney relied on other features of section 31 as showing that the section could not be understood to give a general power to ministers to restrict rents so as to protect tenants against perceived hardship. He pointed out that the Prices and Incomes Act 1968, the Rent (Control of Increases) Act 1969, the Housing Act of 1969, the Housing Rents and Subsidies Act 1975 ("the 1975 Act") in section 7, and the Rent Act 1977 (in section 55 and Schedule 8) had made provision for the phasing of rent increases over a period in certain cases, and this was the recognised statutory means of addressing tenant hardship. He contrasted the rule - making power in section 74, which provided for approval by affirmative resolution although dealing with procedure only, with the power in section 31 which on the ministers' construction contained much more far-reaching powers but was only subject to annulment by negative resolution. He described the provisions of Schedule 11 to the 1977 Act as "entrenched" and suggested that Parliament could not have intended to empower a minister to modify this carefully defined regime. These considerations, among others, led the Court of Appeal to consider that the effect of section 31 was unclear, and are considered further below. But the phasing provisions only applied to certain classes of tenancy, and in any event deferred the rent increase without restricting it; plainly Parliament considered that an additional power was necessary. The contrast between the procedure in sections 31(4) and 74 could be explained by apprehension that exercise of the reserve power in section 31 might call for urgent action. Whether Schedule 11 to the 1977 Act was "entrenched" in the sense that it could not be modified by ministerial order is considered below.

    While I am not persuaded by Mr. Bonney that section 31 is ambiguous or unclear, or that it should receive any construction not based on what appears to be its clear meaning, I am left with a sense of unease springing from the lack of a specific purpose unifying the provisions of the 1985 Act and the difficulty of placing it in context and understanding why, in 1985, Parliament chose to legislate in the terms of section 31 even as part of a statutory consolidation. The question thus arises whether the courts are entitled to trace section 31 back to its original source in search of a clearer indication of the draftsman's intention and the factual context in which the provision was originally enacted. Mr. Parker pressed for a negative answer to this question. He relied on the speech of Lord Simon of Glaisdale (on behalf of Lord Diplock and himself) in Maunsell v. Olins [1975] AC 373 at 392 where he said:

"Consolidation is not nowadays limited to mere re-enactment. Under a procedure recommended by the Law Commissions in 1965 under the Law Commissions Act of that year, even substantial amendments may be made in the pre-existing law, where such are deemed by the Law Commissions to be desirable in order to secure satisfactory consolidation. Such amendments are subject to full and traditional parliamentary control. But, even short of this, by section 2 of the Consolidation of Enactments (Procedure) Act 1949 a consolidation Act may embody such corrections and minor improvements as are confined to, and may be judged expedient with a view to

'resolving ambiguities, removing doubts, bringing obsolete provisions into conformity with modern practice, or removing unnecessary provisions or anomalies which are not of substantial importance, and amendments designed to facilitate improvement in the form or manner in which the law is stated,'

including "any transitional provisions which may be necessary in consequence of such amendments." Moreover, the very purpose of consolidation is to enact a compendious code standing on its own and making it unnecessary to scrutinise the consolidated legislation (which is, indeed, repealed in a Schedule to the consolidation Act). For all these reasons it is, in our respectful submission, an incorrect approach to the construction of a consolidation Act (even one limited to re-enactment) to try to interpret it by reference to the repealed statutes which are consolidated.

"It has been generally accepted in the past that there is a presumption that Parliament does not intend by a consolidation Act to alter the pre-existing law: see Maxwell, pp. 20-25, and Beswick v. Beswick [1968 ] A.C. 58, 73. How far this rule may need modification in the case of some types of consolidation under the Act of 1949 or of consolidation under the 1965 procedure, and how the courts should inform themselves of the manner in which Parliament has proceeded, may have to be considered in some future case. But in any event such a presumption has no scope for operation where the actual words of the consolidation Act are not, as a matter of legal language, capable of bearing more than one meaning. The docked tail must not be allowed to wag the dog. It is only where the actual words used in the consolidation Act are ambiguous (in the sense of being fairly susceptible of bearing more than one meaning in their context and register) that recourse may be had to any difference in phraseology of the corresponding provision in the repealed enactment as an aid to their construction. Even in such a case the corresponding provision of the repealed enactment is capable of being an aid to the construction of the consolidation Act only if its own wording is unambiguous and its sole meaning is one of those which the words in the consolidation Act can fairly bear."

    Lord Simon and Lord Diplock went on to warn against a simplistic approach to construction based on an assumption that the draftsman has sought to remedy one mischief only (or, in other words, that an Act has only one statutory objective). At p. 393 they said:

"For a court of construction to constrain statutory language which has a primary natural meaning appropriate in its context so as to give it an artificial meaning which is appropriate only to remedy the mischief which is conceived to have occasioned the statutory provision is to proceed unsupported by principle, inconsonant with authority and oblivious of the actual practice of parliamentary draftsmen. Once a mischief has been drawn to the attention of the draftsman he will consider whether any concomitant mischiefs should be dealt with as a necessary corollary."

    Reliance was also placed on the speech of Lord Wilberforce in Farrell v. Alexander [1977] AC 59 at 72 where he said:

"I would agree and endorse the principle that it is quite wrong that, in every case where a consolidation Act is under consideration, one should automatically look back through the history of its various provisions, and the cases decided upon them, and minutely trace the language from Act to Act - a process which, incidentally, has led to an argument of four days' length in this House."

    Mr. Bonney relied on other authorities. We were referred to Reg. v. Schildkamp [1971] AC 1, where the issue turned on the construction of a section of the Companies Act 1948. At p. 22G Lord Upjohn said:

"The argument of counsel for the appellant was straightforward. Reading subsection (3) he submits truly that its terms are perfectly clear and simple. There is no ambiguity; the subsection clearly applies so as to create an offence on the part of a person knowingly carrying on a business - with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, and the circumstance that the company may subsequently have been wound up is quite irrelevant. The subsection plainly applies as a matter of language to the case where there has been no subsequent winding up. Looking at that subsection alone, I agree. Naturally he relies upon the contrast between subsection (1) where there is a reference to winding up and subsection (3) where there is not; a point to which I shall return later.

"But, my Lords, this, in my opinion, is the wrong approach to the construction of an Act of Parliament. The task of the court is to ascertain the intention of Parliament; you cannot look at a section, still less a subsection, in isolation, to ascertain that intention; you must look at all the admissible surrounding circumstances before starting to construe the Act. The principle was stated by Lord Simonds in Attorney-General v. Prince Ernest Augustus of Hanover [1957] A.C. 436, 461:

'For words, and particularly general words, cannot be read in isolation: their colour and content are derived from their context. So it is that I conceive it to be my right and duty to examine every word of a statute in its context, and I use 'context' in its widest sense, which I have already indicated as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those other legitimate means, discern the statute was intended to remedy.'

"So I look to the Companies Act, 1948, as a whole and the very first thing that I notice from the Long Title is that it is a consolidation Act. Therefore, bearing in mind that a consolidation Act is presumed not to alter the law, it becomes material to trace this subsection to its original source."

    Lord Upjohn then traced a section of the 1948 Act back to its origin in earlier Acts, and observed at p. 23G:

"Nevertheless, in my opinion, the problem is essentially a question of construction of the 1928 Act and not the 1948 Act, for it was the former that created the new concept of making directors liable for the fraudulent trading of a company and the true scope and ambit of that liability, whether civil or criminal, must be determined by considering the terms of that Act and not of the subsequent consolidation Acts.

"My Lords, the arguments of counsel for the appellant upon section 75(3) are, of course, precisely the same as upon section 332(3) but, for the reasons I have already given, in my opinion, are based upon the wrong approach; one must consider the whole of the 1928 Act before trying to ascertain and determine the true scope of section 75(3) thereof."

    Mr. Bonney also referred us to Lord Simon of Glaisdale's speech in Farrell v. Alexander, at p. 83 where he said:

"This does not mean that the initial approach to the construction of a 'pure' consolidation Act must be via the statutes it has replaced. On the contrary, it is the consolidation Act itself which falls for interpretation. The initial judicial approach is the same as with the interpretation of any other statute. The judge places himself, as the saying goes, in the draftsman's chair. He will ascertain what facts were within the draftsman's knowledge, and what statutory objective he had both generally and as to the particular provision to be construed. The facts available to the draftsman of a consolidation Act will be all those which had been available to the draftsmen of the enactments to be consolidated. These facts and (closely related) the statutory objectives will generally be obvious from the statute falling for construction itself; but the court may, in default or by way of supplement or confirmation, have recourse to matters of which judicial notice may be taken or to official reports in the light of which any part of the legislation has been framed . . . The judge will then ascertain and tune in to the linguistic register of the statute: see Maunsell v. Olins [1975] A.C. 373, 391-392. Having done all this the judge will be in a position to read the statutory language in the primary and most natural sense which it bears in its context. Since the draftsman will himself have endeavoured to express the parliamentary meaning by words used in the primary and most natural sense which they bear in that same context, the court's interpretation of the meaning of the statutory words used should thus coincide with what Parliament meant to say.

"There is one rare situation in which it is permissible for - indeed, incumbent on - the court to construe a consolidation Act at this primary stage of construction by reference to a consolidated enactment. This is where the purpose of a statutory word or phrase can only be grasped by examination of the social context in which it was first used. George Hensher Ltd. v. Restawile Upholstery (Lancs.) Ltd.[1976] A.C. 64 provides an example. The phrase 'work of artistic craftsmanship' in the Copyright Act 1956 could only be properly understood by investigating the social and aesthetic circumstances in which it was first used in the Copyright Act 1911. (The Act of 1956, though not a consolidation Act, was relevantly in pari materia)."

    Finally, Mr. Bonney placed reliance on Johnson v. Moreton [1980] AC 37. At p. 56 Lord Hailsham of St Marylebone said:

"This Act is a consolidating Act to which the observations of a majority of your Lordships in Farrell v. Alexander [1977] AC 59, 72 (Lord Wilberforce), 82 (Lord Simon of Glaisdale) and 97 (Lord Edmund-Davies) clearly apply. Even if I were not bound by these observations I would respectfully agree with them. In my view the whole purpose of consolidation would be defeated if they were not observed and rigidly adhered to or if endeavours were made to split the various components of the consolidation Act apart and construe them by reference to their individual histories. If, in the course of these remarks, I refer to the history of the legislation before and after 1948 it is not in order to construe the words of the Act, which, as will be seen, are in my view unambiguous as they stand, but simply to place them in their proper historical and social context as at 1948."

In the same case at p. 62 Lord Simon of Glaisdale said:

"The 1948 statute was a consolidation Act. Any provision in it must therefore be construed in the context of the whole of the statute in which it now stands (Farrell v. Alexander [1977] AC 59); though it is legitimate (indeed, incumbent) to investigate the statutory history in so far as that throws light on the objective of a particular provision (at p. 84); the ascertainment of the parliamentary objective is an important - generally, an essential - part of the process of statutory interpretation."

    From these authorities, it is plain that courts should not routinely investigate the statutory predecessors of provisions in a consolidation statute, particularly where (as in Maunsell v. Olins, and Farrell v. Alexander) the issue concerns the construction of a single word or expression. Such a practice would reduce the benefit to be derived from the process of consolidation (although the advantage of gathering scattered, and often amended and re-amended, provisions together in a coherent sequence in a single statute should not be underrated). But the overriding aim of the court must always be to give effect to the intention of Parliament as expressed in the words used. If, even in the absence of overt ambiguity, the court finds itself unable, in construing the later provision in isolation, to place itself in the draftsman's chair and interpret the provision in the social and factual context which originally led to its enactment, it seems to me legitimate for the court - even, as Lord Simon said, incumbent on it - to consider the earlier, consolidated, provision in its social and factual context for such help as it may give, the assumption, of course, being (in the absence of amendment) that no change in the law was intended. I agree with the Court of Appeal that it is, in the present case, appropriate to consider the statutory predecessor of section 31.

    The 1985 Act did not itself repeal any earlier statutory provision. It was, however, one of three consolidating statutes passed in that year in the housing field, and the repeals, consequential amendments, transitional matters and savings in connection with each of the three were contained in a fourth Act, the Housing (Consequential Provisions) Act 1985, which provided for repeal of the whole of the Housing Rents and Subsidies Act 1975 ("the 1975 Act"). While the propriety of referring to the provision consolidated in section 31 was in issue between the parties to this appeal, it was accepted that the provision which section 31 consolidated was section 11 of the 1975 Act. This section was preceded by a heading "Rent - general power" and carried a sidenote "Reserve power to limit rents". It provided in full;

"(1) An order may provide for restricting or preventing increases of rent for dwellings which would otherwise take place, or for restricting the amount of rent which would otherwise be payable on new lettings of dwellings.

(2) The supplemental and incidental provisions that may be made by an order under this section may include provisions excluding, adapting or modifying any provision contained in or having effect under any Act which relates to rent (including this Act and any Act passed after it), and in particular provisions for the recovery of overpaid rent.

(3)An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4)Upon the coming into force of this subsection, the power to make orders under section 11 of the Counter-iInflation Act 1973 (general power to make orders restricting or preventing increases of rent) shall cease to include power to make orders relating to rent for dwellings; but the coming into force of this subsection shall not affect the validity of anything done, whether before or after the coming into force of this subsection, by virtue of any order under the said section 11.

(5)The Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974 and the Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974 are revoked, and the standstill period under the first order (which was extended by Article 3 of the second order) shall terminate on the coming into force of this subsection.

(6)Notwithstanding the revocation of the orders -

Article 5 of the first order (recovery of excess rent) shall continue to have effect, for the purposes of both orders, so as to enable a tenant to recover rent at any time during which he would have been able to recover it if the orders had not been revoked, and

Article 8 of that order (jurisdiction of the county court) shall continue to have effect, for the purposes of both orders, in respect of any proceedings commenced before the expiry of a period of two years from the date of the revocation.

(7)Paragraphs (a) and (b) of subsection (6) above shall continue to have effect during the periods specified in them, whether or not Part II of the Counter-Inflation Act 1973 (under which the two revoked orders were made) is in effect.

(8)Notwithstanding the revocation of the orders, the rent recoverable under a regulated tenancy of a dwelling-house in respect of a contractual period beginning before but ending after the revocation shall not exceed the amount which, by virtue of the orders, was the counter-inflation limit for the dwelling-house immediately before the revocation.

(9)Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the orders as it applies to an enactment which is repealed by another Act.

(10)For the purposes of this section an increase in rent takes place at the beginning of the rental period for which an increased rent is payable.

(11) In this section -

'dwelling' does not include a dwelling forming part of a property subject to a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies (but without prejudice to the application of this section in relation to a sub-tenancy of any part of the premises comprised in such a tenancy;)

'local authority' includes a county council;

'new letting' includes any grant of a tenancy, or agreement to grant a tenancy, whether or not the premises were previously let, and any grant of a licence;

'rent' includes any sum payable under a licence but does not include any sum attributable to rates, or, in the case of dwellings of local authorities or new town corporations, to the use of furniture, or the provision of services."

This section, as its terms made plain, replaced the power previously conferred by section 11 of the Counter-Inflation Act 1973, which itself replaced the power conferred by section 2(4) of the Counter-Inflation (Temporary Provisions) Act 1972. This context, as Mr. Bonney submitted and the Court of Appeal accepted, showed that the power in section 11 of the 1975 Act, and therefore section 31 of the 1985 Act, was conferred, and conferred only, to enable the minister to restrict rents where such represented a significant cause of general inflation. This was the foundation of Mr. Bonney's central argument that the Order was ultra vires, since the ministers in making it were not seeking to curb general inflation in the national economy.

    It is a matter of historical record that in the early and mid-1970s excessive inflation in the national economy was recognised as a major threat to the economic health and social cohesion of the nation. The Acts of 1972 and 1973 to which I have referred were passed to counter that threat, and I think it plain from the terms of section 11 of the 1975 Act that it conferred a power to restrict rents where such represented a significant cause of general inflation. The more difficult, and for present purposes more crucial, question is whether that was the only purpose for which the section 11 power could be lawfully exercised. A number of considerations lead me to conclude that the power could in appropriate circumstances be used for other purposes as well:

Whereas the Acts of 1972 and 1973 were expressly and exclusively directed to countering inflation, the Act of 1975 was not. It repealed, in section 1, provisions of the Housing Finance Act 1972, which had changed the basis on which local authorities and new town corporations had determined their rents, and had led to their increasing such rents. It provided for the payment of subsidies to local authorities and new town corporations. It made provision for the phasing of increases of rent of certain registered regulated tenancies not covered by existing phasing provisions. It amended, in a way favourable to tenants, the basis on which fair rents were to be assessed. It reversed the decontrol of certain tenancies. It permitted increases in the rent of controlled tenancies to reflect the value of repairs effected by the landlord or any superior landlord. The 1975 Act accordingly contained a number of provisions, generally protective of tenants, no doubt reflecting at least a partial change of political priorities consequent upon a change of government. No reference was made to inflation or counter-inflation in the long title of the Act nor in the body of the Act itself, save where reference was made to the short titles of previous Acts and the orders made under those Acts.

In marked contrast with the Acts of 1972 and 1973, the 1975 Act did not provide that the powers exercisable under it should cease to be exercisable after the expiration of a specified period of time. If, when inflation was at its most threatening, Parliament thought it desirable to impose a strict time - limit on the exercise of ministerial powers, it is difficult to see any reason why, in 1975, that safeguard should have been thought unnecessary if inflation alone could justify exercise of the powers.

If Parliament had intended in 1975 to restrain the exercise of the section 11 power save for the purpose of countering inflation, I would expect the section to have been drafted, in the context of this Act, so as to make much more specific reference to that limitation.

Section 11 of the 1975 Act did not simply consolidate any earlier enactment.

I would not therefore hold, differing with respect from the Court of Appeal, that the scope of section 11 (and thus of section 31) was or is limited in the way for which Mr. Bonney contended. Section 11 conferred a reserve power, to be exercised by the minister if he reasonably judged it necessary or desirable to protect tenants from hardship caused by increased or excessive rents. To treat countering inflation as the sole mischief at which section 11 was directed is to fall into the fallacy identified by Lord Simon and Lord Diplock of treating a single identified mischief as the only mischief.

    If, contrary to his main submission, the language and context of section 11 did not resolve the issue of interpretation in his favour, Mr. Bonney submitted that it was appropriate, on the authority of Pepper v. Hart [1993] AC 593, to refer to statements in Parliament which made plain that the scope of section 11 was intended to be limited in the way for which he contended. Mr. Parker, for the ministers, submitted that reference should not be made to Hansard, but also that, if reference were made, it was clear that the scope of section 11 was not intended to be so limited. Thus the threshold question arises whether, in this case, resort to Hansard should be permitted.

    In Pepper v. Hart the House (Lord Mackay of Clashfern L.C. dissenting) relaxed the general rule which had been understood to preclude reference in the courts of this country to statements made in Parliament for the purpose of construing a statutory provision. In his leading speech, with which all in the majority concurred, Lord Browne-Wilkinson made plain that such reference was permissible only where (a) legislation was ambiguous or obscure, or led to an absurdity; (b) the material relied on consisted of one or more statements by a minister or other promoter of the Bill together, if necessary, with such other parliamentary material as might be necessary to understand such statements and their effect; and (c) the effect of such statements was clear (see pp. 640B, 631D, 634D). In my opinion, each of these conditions is critical to the majority decision:

Unless the first of the conditions is strictly insisted upon, the real risk exists, feared by Lord Mackay, that the legal advisers to parties engaged in disputes on statutory construction will be required to comb through Hansard in practically every case (see pp. 614G, 616A). This would clearly defeat the intention of Lord Bridge of Harwich that such cases should be rare (p. 617A), and the submission of counsel that such cases should be exceptional (p. 597E).

It is one thing to rely on a statement by a responsible minister or promoter as to the meaning or effect of a provision in a bill thereafter accepted without amendment. It is quite another to rely on a statement made by anyone else, or even by a minister or promoter in the course of what may be lengthy and contentious parliamentary exchanges, particularly if the measure undergoes substantial amendment in the course of its passage through Parliament.

Unless parliamentary statements are indeed clear and unequivocal (or, as Lord Reid put it in Reg. v. Warner [1969] 2 AC 256 at 279E, such as "would almost certainly settle the matter immediately one way or the other"), the court is likely to be drawn into comparing one statement with another, appraising the meaning and effect of what was said and considering what was left unsaid and why. In the course of such an exercise the court would come uncomfortably close to questioning the proceedings in Parliament contrary to article 9 of the Bill of Rights 1689 and might even violate that important constitutional prohibition.

It has been argued that the stringent conditions laid down by the House in Pepper v. Hart were not satisfied in that very case; see Bennion on Statutory Interpretation (3rd ed., 1997) at pp. 483-485. That is not a view I could accept; there was a difference of judicial opinion when the matter was first argued in the House and there were very clear statements on the point at issue by the responsible minister. But the case turned on a narrow point, the meaning of "the cost of a benefit" in section 63(2) of the Finance Act 1976. The minister gave what was no doubt taken to be a reliable statement on the meaning of that expression. Here the issue turns not on the meaning of a statutory expression but on the scope of a statutory power. In this context a minister might describe the circumstances in which the government contemplated use of a power, and might be pressed about exercise of the power in other situations which might arise. No doubt the minister would seek to give helpful answers. But it is most unlikely that he would seek to define the legal effect of the draftsman's language, or to predict all the circumstances in which the power might be used, or to bind any successor administration. Only if a minister were, improbably, to give a categorical assurance to Parliament that a power would not be used in a given situation, such that Parliament could be taken to have legislated on that basis, does it seem to me that a parliamentary statement on the scope of a power would be properly admissible.

    I think it important that the conditions laid down by the House in Pepper v. Hart should be strictly insisted upon. Otherwise, the cost and inconvenience feared by Lord Mackay, whose objections to relaxation of the exclusionary rule were based on considerations of practice not principle (see p. 615G), will be realised. The worst of all worlds would be achieved if parties routinely combed through Hansard, and the courts dredged through conflicting statements of parliamentary intention (see p. 631F), only to conclude that the statutory provision called for no further elucidation or that no clear and unequivocal statement by a responsible minister could be derived from Hansard. I would further draw attention to the terms of Practice Direction (Hansard: Citation) [1995] 1 WLR 192 and Practice Direction (House of Lords: Supporting Documents) [1993] 1 WLR 303.

    Since, for reasons I have already given, I do not regard the meaning or effect of section 11 as ambiguous or obscure or such as to give rise to absurdity, and the unease I felt on reading section 31 in isolation has been dispelled by considering section 11 in its social and factual context, I do not for my part find that the first threshold test for resorting to Hansard is met. In this, as in most cases, the statute should be treated as "the formal and complete intimation to the citizen of a particular rule of the law which he is enjoined, sometimes under penalty, to obey and by which he is both expected and entitled to regulate his conduct" (per Lord Oliver of Aylmerton, Pepper v. Hart, at 619H). The present case illustrates the dangers of weakening this first threshold test. The House has been referred, as was the Court of Appeal, to a number of statements by several ministers with responsibility for the Bill. Understandably enough, they used different expressions, particularly when responding to points made in debate. Spath Holme have placed particular reliance on statements by ministers linking section 11 to inflation and the government's counter-inflation policy. The ministers have placed particular reliance on statements suggesting that the section could be used for other purposes as well. It is hard to judge the significance of these statements without reading the debates to discover what were the points to which ministers were responding. Reading the debates, one finds that the thrust of the Bill was modified and widened during its passage through Parliament. But nowhere did ministers give a categorical assurance that section 11 would not be invoked save to counter excessive inflation, and nowhere did ministers attempt to give a comprehensive legal definition of what section 11 meant. In my view, the third threshold test under Pepper v. Hart, is not satisfied in this case: there was no clear and unequivocal statement to the effect for which Spath Holme contended.

    Before the Court of Appeal and the House Spath Holme relied on a number of additional grounds for impugning the lawfulness of the Order. The Court of Appeal did not accept these arguments, and nor would I. I give my reasons for rejecting them briefly.

    This ground rested on the reference in section 31 to "dwellings" and the definition of "dwelling" in section 38 of the 1985 Act to mean

"a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it."

This definition, it was submitted, defined a dwelling in terms of its physical attributes, but the Order wrongly restricted rent increases by reference to the characteristics of the tenancy to which the dwelling was subject. The Court of Appeal rejected this approach as too narrow, pointing out that the exclusion in section 32(3) was directed to the legal character of the tenancy and not the physical attributes of the dwelling. I agree. There is no reason to constrain the very broad statutory language in the way suggested. The words "either generally or in relation to any specified description of dwelling" were in my view intended to preclude use of the section to target particular local authorities or landlords.

Ground 2

    The Order provided, in article 2(1), that where the article applied the amount to be registered as the rent of a dwelling-house under Part IV of the 1977 Act should not exceed the maximum fair rent calculated in accordance with the formula set out in the article. The amendment made by the Schedule to the Order modified Schedule 11 to the 1977 Act, which governed the process of registration under section 67 of the Act, not the calculation of recoverable rent, a matter governed by Part III. This, it was submitted, was not permitted by section 31, which related only to the restriction of rent, and effected radical changes which went beyond "modifying" the 1977 Act.

    I cannot accept this argument. The Order did not, as was suggested, revoke section 70 of the 1977 Act, which continued to apply where no fair rent had previously been registered and where an increased fair rent did not exceed the maximum laid down by the formula in the Order. An order made under the power conferred by section 31(1) could properly contain supplementary or incidental provisions, even where these excluded, adapted or modified the 1977 Act. The ministers could no doubt have permitted registration of the fair rent calculated on the modified open market rent basis prescribed by the 1977 Act, while stipulating that no rent in excess of the formula laid down in the Order should be payable or recoverable. But this would have called for amendment of section 44(1) of the 1977 Act, and the ministers were in my view entitled to adhere to the rule that the rent recoverable should be the rent registered and no more. I do not think they exceeded their powers in giving effect to this view.

    This ground was based on the terms of section 74 of the 1977 Act which gave power to the Secretary of State to make regulations prescribing forms, regulating the procedure to be followed by rent officers and rent assessment committees and "prescribing anything required or authorised to be prescribed" by Part IV of the Act. It was provided by subsection (2) that regulations might contain provisions modifying certain provisions of the Act, including section 67 and both Parts of Schedule 11, but no such regulations were to have effect unless approved by resolution of each House. Other regulations were subject only to annulment. In reliance on these provisions, Spath Holme argued that Schedule 11 could not be modified in any way save by the affirmative procedure prescribed in section 74. It was accordingly not open to the ministers to amend Schedule 11 under section 31, which provided for annulment by negative resolution and not approval by affirmative resolution.

    Again, I cannot accept this argument. The 1985 Act was passed after the 1977 Act. In section 31(2) it gave ministers power to exclude, adapt or modify "any provision made by or under an enactment (whenever passed) relating to rent or the recovery of overpaid rent." The language could scarcely be broader. Plainly the 1977 Act and Schedule 11 related to rent. An Order under section 31 could only be made if circumstances arose which justified ministers in making an Order under the section. But if they did, Parliament must have intended the ministers' powers to be exercisable subject only to the procedure laid down in section 31(4).

    Spath Holme submitted that in making the Order the ministers had not taken account of all relevant considerations and had taken account of irrelevant considerations. First, it was argued, ministers had failed to take account of the potent arguments advanced by landlords in opposition to the third option canvassed in the consultation paper of May 1998. Secondly, reliance was placed on certain observations made by ministers, which were said to have betrayed a misconception that the sharp and unexpected increases to which some tenants were subjected had occurred "despite" the fair rent regime governed by the 1977 Act, whereas in truth they had occurred because that regime had not been correctly implemented in some areas.

    I am not persuaded by these arguments. Landlords did indeed have strongly arguable grounds for resisting the government's proposal, but it cannot be said that their interests were ignored. In the annex to the consultation paper the object of the proposed measure was said to be:

"to slow down the rate at which fair rents are increasing for tenants but nevertheless to ensure that there is no disproportionate impact on landlords."

Under the heading "Issues of equity or fairness", the question was posed:

"is it fair to landlords to change the fair rent system which was left intact when the Housing Act 1988 was introduced and which they would not have expected to be changed subsequently."

Having posed the question it cannot be thought that ministers ignored the landlords' answer, disappointed though landlords may be that it was not given greater weight.

    Some of the ministerial statements on this subject could have been more felicitously expressed. But the problem of sharp and unexpected rent increases had indeed arisen despite the fair rent regime, since that regime had been in force throughout and the increases would not have occurred had it been faithfully implemented in all areas from the beginning. Ministers did not suggest that the Court of Appeal decisions which had brought the reluctant rent officers and rent assessment committees into line had not given true effect to the fair rent legislation, nor that the general law should be changed. But it was the case that what ministers considered a serious social problem had arisen, even if it should not have arisen, and their observations are readily understandable in that context. I see nothing to suggest that the ministers had misconceived the source of the problem.

    Spath Holme submitted that in making the Order the ministers had acted unreasonably, unfairly and disproportionately. A number of complaints were made. The restriction imposed by the Order applied across the board, thus giving a benefit to tenants who would have been caused no hardship by the full rental increases as well as those who would. It ignored the relief afforded by housing benefit. It meant that landlords who had already suffered loss through the registration of rents at too low a level were now obliged to give tenants a further subsidy, as a result of errors made by rent officers and rent assessment committees. The interference with registration as well as the rent recoverable was disproportionate. There were figures which showed that the stable door was being locked after the horse had bolted. The Order only applied to about half the regulated tenants who had registered rents and made no difference to the remainder. The Order breached Article 1 of the First Protocol to the European Convention on Human Rights, as well as Articles 13 and 14.

    The Court of Appeal considered this submission carefully, and in my opinion were right to reject it. It is an enduring and intractable problem of social policy that those who need relief cannot always be helped without giving relief to those who do not need it. Housing benefit is means-tested, and the allocation of public resources is a matter for ministers, not courts. The hardship which the Order imposed on landlords was a very relevant consideration, but it was for ministers to judge where the balance between the competing interests of landlords and tenants should be struck. It was not unreasonable to provide that the maximum recoverable rents should be the rents registered. The timing and scope of the Order were matters on which the ministers had to form a judgment, and their judgment cannot be stigmatised as perverse. There was no breach of the European Convention: the European Court of Human Rights has recognised the need for a wide measure of discretion in the implementation of policy in this field, as shown by Mellacher v. Austria (1989) 12 EHRR 391. Any actions the ministers took, or any failure by the ministers to take action, were bound to be bitterly resented by those who were disadvantaged as a result. That does not mean that the action which the ministers did take in making the Order was unreasonable, unfair or disproportionate, disadvantageous to landlords though it certainly was.

    I would allow the ministers' appeal, quash the Order made by the Court of Appeal and dismiss Spath Holme's application for judicial review. In accordance with the terms on which leave to appeal to the House was given, the Ministers must pay Spath Holme's costs before the House and the order for costs made in the Court of Appeal will stand.

LORD NICHOLLS OF BIRKENHEAD

My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend Lord Bingham of Cornhill. In agreement with him, I would allow this appeal. The one point on which I part company with him concerns the use of Hansard. On this matter there is a measure of disagreement between your Lordships.

    I go back to first principles. The present appeal raises a point of statutory interpretation: what is the ambit of the power conferred on the minister by section 31(1) of the Landlord and Tenant Act 1985? No statutory power is of unlimited scope. The discretion given by Parliament is never absolute or unfettered. Powers are conferred by Parliament for a purpose, and they may be lawfully exercised only in furtherance of that purpose: 'the policy and objects of the Act', in the oft-quoted words of Lord Reid in Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997,1030. The purpose for which a power is conferred, and hence its ambit, may be stated expressly in the statute. Or it may be implicit. Then the purpose has to be inferred from the language used, read in its statutory context and having regard to any aid to interpretation which assists in the particular case. In either event, whether the purpose is stated expressly or has to be inferred, the exercise is one of statutory interpretation.

    Statutory interpretation is an exercise which requires the court to identify the meaning borne by the words in question in the particular context. The task of the court is often said to be to ascertain the intention of Parliament expressed in the language under consideration. This is correct and may be helpful, so long as it is remembered that the 'intention of Parliament' is an objective concept, not subjective. The phrase is a shorthand reference to the intention which the court reasonably imputes to Parliament in respect of the language used. It is not the subjective intention of the minister or other persons who promoted the legislation. Nor is it the subjective intention of the draftsman, or of individual members or even of a majority of individual members of either House. These individuals will often have widely varying intentions. Their understanding of the legislation and the words used may be impressively complete or woefully inadequate. Thus, when courts say that such-and-such a meaning 'cannot be what Parliament intended', they are saying only that the words under consideration cannot reasonably be taken as used by Parliament with that meaning. As Lord Reid said in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg A G [1975] AC 591, 613:

    'We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used.'

    In identifying the meaning of the words used, the courts employ accepted principles of interpretation as useful guides. For instance, an appropriate starting point is that language is to be taken to bear its ordinary meaning in the general context of the statute. Another, recently enacted, principle is that so far as possible legislation must be read in a way which is compatible with human rights and fundamental freedoms: see section 3 of the Human Rights Act 1998. The principles of interpretation include also certain presumptions. To take a familiar instance, the courts presume that a mental ingredient is an essential element in every statutory offence unless Parliament has indicated a contrary intention expressly or by necessary implication.

    Additionally, the courts employ other recognised aids. They may be internal aids. Other provisions in the same statute may shed light on the meaning of the words under consideration. Or the aids may be external to the statute, such as its background setting and its legislative history. This extraneous material includes reports of Royal Commissions and advisory committees, reports of the Law Commission (with or without a draft Bill attached), and a statute's legislative antecedents.

    Use of non-statutory materials as an aid to interpretation is not a new development. As long ago as 1584 the Barons of the Exchequer enunciated the so-called mischief rule. In interpreting statutes courts should take into account, among other matters, 'the mischief and defect for which the common law did not provide': Heydon's Case (1584) 3 Co Rep 7a, 7b. Nowadays the courts look at external aids for more than merely identifying the mischief the statute is intended to cure. In adopting a purposive approach to the interpretation of statutory language, courts seek to identify and give effect to the purpose of the legislation. To the extent that extraneous material assists in identifying the purpose of the legislation, it is a useful tool.

    This is subject to an important caveat. External aids differ significantly from internal aids. Unlike internal aids, external aids are not found within the statute in which Parliament has expressed its intention in the words in question. This difference is of constitutional importance. Citizens, with the assistance of their advisers, are intended to be able to understand parliamentary enactments, so that they can regulate their conduct accordingly. They should be able to rely upon what they read in an Act of Parliament. This gives rise to a tension between the need for legal certainty, which is one of the fundamental elements of the rule of law, and the need to give effect to the intention of Parliament, from whatever source that (objectively assessed) intention can be gleaned. Lord Diplock drew attention to the importance of this aspect of the rule of law in Fothergill v Monarch Airlines Ltd [1981] AC 251, 279-280:

"The source to which Parliament must have intended the citizen to refer is the language of the Act itself. These are the words which Parliament has itself approved as accurately expressing its intentions. If the meaning of those words is clear and unambiguous and does not lead to a result that is manifestly absurd or unreasonable, it would be a confidence trick by Parliament and destructive of all legal certainty if the private citizen could not rely upon that meaning but was required to search through all that had happened before and in the course of the legislative process in order to see whether there was anything to be found from which it could be inferred that Parliament's real intention had not been accurately expressed by the actual words that Parliament had adopted to communicate it to those affected by the legislation'.

    This constitutional consideration does not mean that when deciding whether statutory language is clear and unambiguous and not productive of absurdity, the courts are confined to looking solely at the language in question in its context within the statute. That would impose on the courts much too restrictive an approach. No legislation is enacted in a vacuum. Regard may also be had to extraneous material, such as the setting in which the legislation was enacted. This is a matter of everyday occurrence.

    That said, courts should nevertheless approach the use of external aids with circumspection. Judges frequently turn to external aids for confirmation of views reached without their assistance. That is unobjectionable. But the constitutional implications point to a need for courts to be slow to permit external aids to displace meanings which are otherwise clear and unambiguous and not productive of absurdity. Sometimes external aids may properly operate in this way. In other cases, the requirements of legal certainty might be undermined to an unacceptable extent if the court were to adopt, as the intention to be imputed to Parliament in using the words in question, the meaning suggested by an external aid. Thus, when interpreting statutory language courts have to strike a balance between conflicting considerations.

    For some years before 1993 a self-imposed judicial rule precluded use of parliamentary proceedings as an external aid. This exclusionary rule was relaxed by this House in Pepper v Hart, so as to permit use of parliamentary materials as an aid to construction where certain conditions are satisfied. One of these conditions is that the legislation must be ambiguous or obscure, or lead to an absurdity: see Lord Browne-Wilkinson [1993] AC, 593 at 640.

    I can see nothing in this formulation or in principle to suggest that the ambiguity or obscurity or absurdity must be of any particular type. The purpose for which a statutory power is conferred is just as much a question of interpretation of the statutory provision as is the meaning of a particular word or phrase. It cannot be right for the courts to look at parliamentary proceedings, if they assist, on the interpretation of a particular word or phrase, but to decline to look at parliamentary proceedings, however much assistance they may give, when deciding, as a matter of interpretation, what was the purpose for which a power was conferred. The point is underlined by noting that, if drawn, this distinction has the consequence that, in the latter type of case, the courts will look at other forms of extraneous material if they assist, such as statements in Government white papers, but not at what was said by Government ministers in Parliament. This would not be a rational distinction.

    Experience has shown that the occasions on which reference to parliamentary proceedings is of assistance are rare. To be of assistance as an external aid, the parliamentary statement relied upon must be clear and unequivocal. Otherwise it is of no real use. Parliamentary statements seldom satisfy this test on the points of interpretation which come before the courts. Increasing awareness of the lack of help provided by parliamentary material will, it is to be hoped, result in counsel being more realistic and more sparing in their references to such material.

    As Lord Cooke points out in his speech, this does not mean that the courts will shut out, and not even look at, parliamentary material which one party reasonably contends supports his interpretation of ambiguous legislation. Rather, the courts will consider the material to see whether counsel's contention is well-founded. If the parliamentary statements relied upon are not clear, they are of little or no value and cannot qualify as an external aid in the particular case. They will fail to satisfy the third of Lord Browne-Wilkinson's conditions: see Pepper v Hart [1993] AC 593, 640.

    If, however, the statements are clear, and were made by a minister or other promoter of the Bill, they qualify as an external aid. In such a case the statements are a factor the court will take into account in construing legislation which is ambiguous or obscure or productive of absurdity. They are then as much part of the background to the legislation as, say, Government white papers. They are part of the legislative background, but they are no more than this. This cannot be emphasised this too strongly. Government statements, however they are made and however explicit they may be, cannot control the meaning of an Act of Parliament. As with other extraneous material, it is for the court, when determining what was the intention of Parliament in using the words in question, to decide how much importance, or weight, if any, should be attached to a Government statement. The weight will depend on all the circumstances. For instance, the statement might conflict with the principle of interpretation that penal legislation is to be construed strictly.

    I turn to the present case. Read by itself, section 31(1) and (2) of the Landlord and Tenant Act 1985, coupled with its sidenote 'Reserve power to limit rents', suggests that the power thereby conferred is intended to be kept in reserve, available to be used by the minister in unforeseen circumstances when he reasonably considers this is necessary to promote fairness between landlords and tenants of dwellings. But, as so interpreted, the ambit of the power is extremely wide. Indeed, it is the very width of the power, as so interpreted, together with its derivation from the Counter-Inflation Act 1973, that raises questions. One is left in doubt whether, as contended by Spath Holme, there is some narrower interpretation which is to be preferred; for instance, that the power was conferred for use only for counter-inflationary purposes. The legislation is not clear. Thus it satisfies the first pre-condition for the use of parliamentary materials as an external aid. I have more difficulty over the third pre-condition (the statement relied upon must be clear). In considering whether a ministerial statement is clear and unequivocal, regard must be had to the circumstances in which it was made. Extempore answers given in the course of vigorous debate in the House or in committee cannot be expected to be as comprehensive and precise as more formal statements. Suffice to say, looking at them overall, the parliamentary statements relied upon in the present case do not contain a clear and unequivocal statement in favour of the interpretation contended for by Spath Holme. That being so, they are not useful as an external aid in support of that interpretation.

LORD COOKE OF THORNDON

My Lords,

    Having had the advantage of reading in draft the speech of my noble and learned friend Lord Bingham of Cornhill, I agree with his conclusion and largely with his reasons; but I wish to add something, mainly about Hansard.

    Some passages in the judgment of the Court of Appeal delivered by Stuart-Smith L.J. might seem to suggest that in construing section 31 of the Landlord and Tenant Act 1985 the choice is between an unlimited power and a limited one. As no statutory discretion is unlimited, that could not be right. Very probably the Court of Appeal did not mean such a stark contrast, for they did also say that ordinary Wednesbury principles would apply. Taken as a whole, their reasoning is consistent with what I believe to be the true view: namely that the choice is between a power limited to making rent restriction orders reasonably capable of being seen to reflect the equities between landlords and tenants of dwellings, on the one hand, and a power limited to making such orders for counter-inflationary purposes, on the other.

    Even so, a power conditioned only by landlord and tenant equities is very wide. I think that the Court of Appeal were correct in their view that it was not clear and unambiguous, but in doubt, that Parliament intended such a wide power. "Ambiguous" is a word not itself free from the quality which it purports to ascribe. The philosopher Sir William Empson famously identified seven types of ambiguity, none of which appears to correspond with ordinary legal usage. In ordinary legal usage, I think that a provision is ambiguous if reasonably open on orthodox rules of construction to more than one meaning. In this sense, I think that section 31(1) and (2) of the Act of 1985, and their forerunners section 11(1) and (2) of the Housing Rents and Subsidies Act 1975, are ambiguous. While today the purposive principle of interpretation is the governing one if available, other established canons may come into play. They include some referred to by the Court of Appeal and relied on for the landlords in argument there and in your Lordships' House: such as that Parliament does not lightly take the exceptional course of delegating to the executive the power to amend primary legislation; that, when it does so, a restrictive approach to interpretation is legitimate; and that, in the absence of clear language Parliament is presumed not to take away property rights without compensation. As the Court of Appeal said, certain provisions in other legislation designed, by phasing, to alleviate hardship in large rent increases, may also be seen as supporting a restrictive approach to the reserve power.

     The Court of Appeal resolved the ambiguity in two ways. First, they thought it clear from both the context of section 11 of the Act of 1975, particularly section 11(4) and (5), and its derivation from section 11 of the Counter-Inflation Act 1973, that the purpose of the reserve power was and is limited to counter-inflation. Like Lord Bingham of Cornhill, I am respectfully unable to agree. The fact that counter-inflationary powers have been abolished and counter-inflationary orders revoked goes no distance towards showing that a replacement power expressed in comprehensive terms in general landlord and tenant legislation is limited to counter-inflation.

    The second and alternative way in which the Court of Appeal resolved the ambiguity was by reference to the statements of responsible Ministers when the Act of 1975 was going through Parliament. They relied on Pepper v. Hart [1993] AC 593. My Lords, for the reasons to be given later herein, while not sharing their conclusions I think that the Court of Appeal were well entitled to refer to Hansard. Moreover the Ministerial statements in the House of Commons and the House of Lords quoted by the Court of Appeal do provide considerable support for a restricted intention: ". . . a reserve power of a general counter-inflationary nature." "It is, of course, disproportionate in counter-inflation terms." "This power is necessary on broad grounds of Government economic policy, and is similar to the power in the Counter-Inflation Act under which the current rent freeze was imposed." See the quotations appearing more fully in [2000] 3 W.L.R. at 158.

    But when these statements are read together with others made by the Government spokesmen in Parliament, they cease to be unequivocal. The Bill which was enacted in 1975 was originally confined to local authorities. In opening the debate in the House of Commons on the second reading of the Bill, the Secretary of State for the Environment (Mr. Anthony Crosland) said "With this short Bill the Government aim to cut the throat of the Tory Housing Finance Act at a stroke." Hansard (H.C. Debates) 18 November 1974, col. 904. It is a statement suggesting a difference of social policy rather than a concern limited to inflation. His subsequent speech did include reference to counter-inflationary policy, but a main theme is illustrated by the following passage:

"So this Bill restores to local authorities their power to set rents, subject only to the condition that these be 'reasonable.' The concept of 'reasonable' rents was in force for 50 years up to the 1972 Act, and is well understood. It means that councils must strike a reasonable balance between the various interests in their communities. At the lower end, they cannot set rents so low that an unreasonable burden is laid on ratepayers. At the top end, they cannot set rents so high that they actually make a profit out of the provision of council housing. Within those very broad limits, the decision is theirs.

"This provision illustrates in the sharpest form the difference in philosophy between the Opposition and ourselves. The authors of the 1972 Act envisaged a situation where many councils would make an actual profit on their housing - a profit on housing which contains an important social service element. That concept - the generation of profit out of socially necessary housing - is one which we on this side of the House reject, and which this Bill will make impossible."

Ib. col. 905-906. The Under-Secretary of State, Mr. Kaufman, after mentioning subsidies to local authorities gave similarly general explanations of the purpose of the power, such as:

"However, we are concerned that there might be circumstances in which it appeared that rent increases were becoming disproportionate. We want this power to cover that circumstance. We specifically do not wish to take power to deal with an individual authority. We believe that, in view of the basis upon which we drafted the Bill, and bearing in mind, without being too vainglorious, what we might describe as the philosophy behind the Bill, it would be entirely wrong for the Government who have sought to restore to individual local authorities the power to fix rents then to descend upon one local authority and say, 'You are behaving badly. Therefore, we are going to interfere with your rent-fixing.' We shall not do that.

"If a pattern emerged that we regarded as dangerous, we should exercise our fall-back power in respect of that pattern. But an individual authority - not even the authority responsible for Paddington - would certainly not trigger off the use of that power."

Hansard (H.C. Debates) 3 December 1974, col. 133. The Bill was amended to extend to private sector rents for dwellings, and on 14 January 1975 Mr. Kaufman said:

"I should like to repeat and underline the assurances I gave in Committee about the way in which the power will be used. I cannot anticipate the use of reserve powers since the use of a reserve power cannot be anticipated. On the other hand, the fact that we are asking the House to agree to amendments extending that reserve power to the private sector means that we envisage the possibility that it will be used. One cannot anticipate the circumstances."

Hansard (H.C. Debates) col. 342. Self-evident though it might seem, this statement is the clearest evidence that the power was intended by the Government to cover unforeseeable circumstances generally. In the Lords on 27 January 1975 Lord Melchett, who moved the second reading of the Bill, was also cautious:

"The noble Baroness asked me about the reserve powers in Clause 2 of the Bill. She wished to know why this power could not be left in the Counter-Inflation Act. The answer is that a power concerning rents is much better included in a housing Act. Under the Counter-Inflation Act, the power would expire early in 1976 and, since it is not possible to say whether the need for this power will expire at that date or if it will need to be continued for longer, the Government feel that it is right to put the power into the present Bill.

"I think that I was also asked in what circumstances this power might be used. The power must be flexibly worded in order to cope with all situations in which it might be needed. In the private sector it could be used to deal with particular categories of dwelling, and in the public sector, where landlords are non-profit making bodies, the same problem does not arise. Clause 11(5) limits the power to specifying a description of authorities or dwellings - in other words, the use of this power in the public sector could not be aimed at an individual local authority without going beyond the plain intention of Clause 11(5)."

Hansard (H.L. Debates) col. 359-360. In the light of such statements it is difficult to agree with the Court of Appeal that it could not be clearer that the power was intended to be limited to counter-inflationary purposes. Neither in the legislative history nor in the parliamentary history can I find enough to justify reading down the power in the manner for which the landlords contend. The true interpretation, in my view, is the wide but not unlimited first alternative previously mentioned. The reserve power can legitimately be used to temper the effect of unexpected rent increases for tenants on fixed incomes, even though the rises result from a correct reinterpretation of the law rather than from general inflation. It is highly unlikely that the responsible Ministers would have meant to exclude such circumstances from the ambit of the power.

    Reference to Hansard does not often help the courts with issues of statutory interpretation, but experience has shown that it does so occasionally. In this instance it is as helpful as the consultation paper of May 1998, summarised by my noble and learned friend Lord Bingham of Cornhill, in relation to the Order of 1999. Not being persuaded that there is any good reason why the courts should deny themselves the advantage of such sources, I would adopt the opening passage of the speech of Lord Griffiths in Pepper v. Hart [1993] AC 593, 617:

"My Lords, I have long thought that the time had come to change the self-imposed judicial rule that forbade any reference to the legislative history of an enactment as an aid to its interpretation. The ever increasing volume of legislation must inevitably result in ambiguities of statutory language which are not perceived at the time the legislation is enacted. The object of the court in interpreting legislation is to give effect so far as the language permits to the intention of the legislature. If the language proves to be ambiguous I can see no sound reason not to consult Hansard to see if there is a clear statement of the meaning that the words were intended to carry. The days have long passed when the courts adopted a strict constructionist view of interpretation which required them to adopt the literal meaning of the language. The courts now adopt a purposive approach which seeks to give effect to the true purpose of legislation and are prepared to look at much extraneous material that bears upon the background against which the legislation was enacted. Why then cut ourselves off from the one source in which may be found an authoritative statement of the intention with which the legislation is placed before Parliament?"

    Like Lord Griffiths, I agree with Lord Browne-Wilkinson in the same case at 634 that ambiguity is one condition of judicial resort to Hansard (and in the present case the only relevant one). Again like Lord Griffiths, I think that ambiguity may fairly be said to exist even if, without Hansard, one would lean towards the interpretation supported by Hansard. As in the present case, it is reassuring, when considering whether sweeping general statutory language can properly be cut down by interpretation, to find a wide intention confirmed by Ministerial statements in parliamentary debates.

    In that respect the present case is analogous to Marac Life Assurance Ltd. v. Commissioner of Inland Revenue [1986] 1 NZLR 694, cited in the discussion in Bennion on Statutory Interpretation, 3rd ed. (1997) 520-521. There an issue was whether the proceeds of certain short-term life insurance bonds were caught by an Act of 1983 taxing interest on money lent. The language of the new Act was wide, but traditionally life insurance had been treated in taxation legislation as a separate and self-contained topic. A court of five accepted that the new Act was not intended to depart from that pattern. Each judge in the Court of Appeal found confirmation in, or at least referred to, a financial statement presented by the responsible Minister to the House of Representatives in moving the second reading of the Bill: see pages 701-702; 708; 713; 716; 718.

    As for the argument of expense, in some cases time may be more usefully spent in looking up Hansard than in compiling a dossier of general propositions and authorities on statutory interpretation or administrative law familiar to every judge.

    It is necessary to distinguish two things often treated as if they were one. First there are cases in which the court can in the end derive real help from Hansard, even if it is not necessarily decisive help. I think that this case is an example. Hansard shows that the courts will not be thwarting a clear intention of the legislators by holding that the wider interpretation is correct. Secondly there is the question whether it is proper for counsel to cite Hansard. A practice of constant citation is unacceptable to the courts. Counsel must be expected to use their discretion. In this case I think that counsel for the landlords was fully justified in his citations. After all, they convinced the Court of Appeal. To shut out either party from relying on Hansard would have been, in my opinion, contrary to natural justice.

    Accordingly I too would allow the appeal.

LORD HOPE OF CRAIGHEAD

My Lords,

    My noble and learned friend Lord Bingham of Cornhill, whose speech I have had the advantage of reading in draft, has described the circumstances in which The Rent Acts (Maximum Fair Rent) Order 1999 came to be made and the background to the arguments which Spath Holme Limited have advanced to the effect that section 31 of the Landlord and Tenant Act 1985 did not give the ministers power to make the Order. For the like reasons I too would allow the appeal by the ministers and dismiss Spath Holme's application for judicial review. But the case has raised important questions of statutory construction with regard to the scope of the rule-making power in section 31, and I should like to add these observations.

    The primary rule is that a discretion which is conferred by Parliament on a minister must be taken to have been conferred on him with the intention that he should use it to promote the policy and objects of the Act: Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997, 1030C per Lord Reid. No minister who seeks to exercise a discretion which legislation has conferred on him can claim that the discretion, however widely expressed, is unfettered or unlimited. This is essential to the maintenance of a sound relationship between the executive and the legislature in a democracy. Discretionary powers may be sought from Parliament by the executive. But decisions as to the extent of those powers and the purpose for which they may be exercised rest solely with Parliament. They depend on the meaning and effect of the legislation which confers the power. This is a matter for Parliament, not the executive. So when issues are raised as to the scope of the discretion, as they have been in this case, it is necessary to construe the Act. The purpose of doing so is to discover the true intent and meaning of the provision by which the discretion has been conferred by Parliament on the minister.

    In some cases the point at issue will turn on the meaning to be given to a word or phrase in the enabling statute which appears at first sight to be ambiguous. In other cases the search for the true intent and meaning of the provision will raise broader considerations than the meaning to be given to particular words or phrases. The words or phrases which the enabling provision has used may in themselves be perfectly clear and unambiguous. On the face of it the discretion may appear to be very wide. The question will then be whether the width which the enabling provision bears according to its ordinary and natural meaning is limited by the context in which it appears when the Act is read as a whole.

    In the present case none of the words or phrases which Parliament has used in section 31(1) of the 1985 Act appear to me to be ambiguous. The problem arises simply because no mention is made in the subsection of the purpose for which the power has been given or the circumstances in which it may be exercised. There is a sidenote which reads "Reserve power to limit rents". It may be assumed from this that the intention was that the power should be used seldom, if at all, and then only when other means of restricting or limiting rents had proved to be ineffective. But this tells one nothing about the purpose for which the power was given or the circumstances when it might be exercised. The answer to the question which has been raised in this case about the scope of the power must therefore be found by examining the wider context.

    Issues of some difficulty and importance have however been raised as to how far it is proper to go in the search for guidance as to the policy and objects of the 1985 Act. On the one hand the ministers say that sufficient guidance is to be found in the Act itself and that, notwithstanding the fact that this is a consolidating enactment, it is both unnecessary and illegitimate to examine the legislative history by scrutinising the consolidated enactments. They also say that it would not be appropriate in this case to refer, on the authority of Pepper v. Hart [1993] AC 593, to statements reported in Hansard. The argument for Spath Holme on the other hand is that the power may be used only for counter-inflationary purposes. It is based upon propositions which are drawn from an analysis of the language and history of the consolidated enactments and of material which is to be found in Hansard.

    There are a number of important signposts that are to be found within the 1985 Act itself which indicate the context in which this reserve power was given to the ministers. Section 31(1) confines the power to restricting or preventing increases of rent to rent for "dwellings". Section 32(3) provides that the power does not apply to a dwelling forming part of a tenancy to which Part II of the Landlord and Tenant Act 1954 applies because the premises are occupied for business or professional purposes. The Act as a whole relates to the housing of tenants in the public and private sectors. Its primary concern is the regulation of the relationship between landlord and tenant, with a view to achieving fairness for the tenant. It deals with matters such as the provision of information to tenants, the provision of rent books, implied terms as to fitness for habitation and obligations of repair. It does not seek to replace or alter the systems for security of tenure and for the assessment of fair rents which are set out in the Rent Act 1977. But, taken overall, the context in which section 31 appears is one in which the primary concern is the maintenance of fairness as between landlord and tenant in regard to the letting of dwelling-houses in both the public and the private sector for housing. These are matters which fall within the realm of housing policy. There is nothing here to indicate that either the Act as a whole or section 31 in particular was concerned in any respect with counter-inflation policy.

    The first question then is whether it is proper to look back to the consolidated legislation from which section 31 was derived in order to derive further guidance as to the purpose for which the section was enacted. There is no doubt that, as general rule, it is not permissible to construe a consolidating enactment by reference to the repealed statutes which that enactment has consolidated: Maunsell v. Olins [1975] A.C. 373, 392F-G per Lord Diplock and Lord Simon of Glaisdale. In Farrell v. Alexander [1977] AC 59, 72H Lord Wilberforce said that he agreed with and endorsed the principle that it is quite wrong in every case where a consolidation Act is under consideration, as a matter of course, to look back through the history of the various provisions that have been consolidated. On the other hand an exception may be made where words used in the consolidation Act are ambiguous. In that event, as Lord Diplock and Lord Simon recognised in Maunsell v. Olins at p. 392H-393A, recourse may be had to any difference in the wording of the corresponding provision in the repealed enactment as an aid to the construction of those words. As Lord Simon said in Farrell v. Alexander at p. 84H, if the primary approach to construction discloses an ambiguity in a consolidation Act, that may sometimes (though rarely) be resolved by examination of the superseded legislation. But I do not think that that is the situation in the present case. It seems to me that there is no ambiguity in the words used in section 31 of the 1985 Act.

    Another situation in which in Farrell v. Alexander at p. 84A-B Lord Simon said it was permissible for the court to construe a consolidation Act by reference to a consolidated enactment - also described by him as rare - is where the purpose of a statutory word or phrase can only be grasped by an examination of the social context in which it was first used. But I do not think that any of the words or phrases used in section 31 fall into that category. The argument which has been advanced for Spath Holme in this case is not directed to any ambiguity in the meaning of words or phrases used in the consolidation Act. It seeks instead to limit the scope of the discretion which that section confers on the ministers by reference to a policy and to objects for which the sole basis in statutory language is to be found in the repealed enactments which do not appear anywhere in the consolidation Act.

    I think that it is highly doubtful whether the exercise which Spath Home have invited your Lordships to carry out is legitimate in these circumstances. But even if it was I do not think that it produces the result that Spath Holme have contended for. The general power to make orders restricting or preventing increases in rent which was contained in section 11 of the Counter-Inflation Act 1973, which replaced the power conferred by section 2(4) of the Counter-Inflation (Temporary Provisions) Act 1972, was enacted as part of a series of measures to enable the government to control inflation. The 1972 and 1973 Acts applied to the whole of the United Kingdom, including Scotland and Northern Ireland. This was consistent with the fact that inflation is a phenomenon which affects the whole of the country's economy. It does not respect internal geographical boundaries. The power to make orders restricting or preventing increases in rents adopted the same approach, as it applied to rents generally as one of a variety of species of income that needed to be dealt with in order to control inflation. It was not confined to rents payable by the tenants of dwelling-houses. Measures were included to ensure that orders made under this legislation were of a temporary nature, on the view that the restrictions would no longer be needed once inflation was under control.

    All that was changed when section 11(1) of the Housing Rents and Subsidies Act 1975 was enacted. This was a power which related only to the amount of rent payable on lettings of dwelling-houses. The 1975 Act applied to England and Wales only: section 17(10). And the power was not subject to any time-limits. Although counter-inflation legislation was still in force when that Act was enacted and, as section 11(4) indicates, the reserve power could have been used at that time in order to help to control inflation within the economy generally, these important alterations in the structure and content of the legislation indicate that the policy reasons for which the power could be used were no longer to be confined to this. The inference which I would draw from the enactment of this power in the 1975 Act is that it was enacted for reasons of housing policy with a view to the power being exercised by housing ministers, not for counter-inflationary reasons which would be of concern primarily to ministers responsible for economic policy.

    The context in which the power conferred by section 11 of the 1975 Act which has now been consolidated into the 1985 Act was enacted is therefore quite different from that in which earlier powers were enacted as part of the counter-inflation legislation. The logical conclusion of the argument that Spath Holme seek to advance is that section 31 of the 1985 Act has been preserved in the consolidation Act as a relict from the counter-inflation legislation, and that it may only be used in the circumstances which were envisaged when that legislation was enacted. But the whole of the statutory framework which was designed to deal with the effects of inflation in the economy generally has disappeared. The current legislation provides no yardstick, by way of definition or otherwise, which would enable the ministers to identify the parameters within which the power was available to them to be used if its use was to be confined to counter-inflationary purposes. I am not willing to accept that it was the intention of Parliament when it enacted section 31 that the purpose for which the power might be used was so limited. For these reasons I do not consider that it is helpful in this case, even if it were legitimate, to refer to the context in which the repealed legislation was enacted for the purpose of defining the circumstances in which the power in the consolidation Act may be exercised.

    Then there is the question whether it is proper to examine the statements made by ministers during the passage of the 1975 Act through Parliament as reported in Hansard. Here again I think that it is, at best, highly doubtful whether in this case this exercise is legitimate. My own view is that it is not. It is important to appreciate the purpose for which your Lordships have been invited to undertake the exercise. It is not to construe words used in the legislation which are said to be ambiguous or obscure or which, having regard to their ordinary meaning, would lead to absurdity: see Pepper v. Hart [1993] AC 593, 640C per Lord Browne-Wilkinson. Its purpose is to identify the reasons of policy for which the discretionary power to make orders restricting or preventing increases in rents was sought to be obtained from Parliament by the executive. It is not the language used by the draftsman that is in issue here, but what was in the mind of the minister.

    In my opinion there are sound reasons of principle for rejecting the argument that statements made by ministers in Parliament may be used to identify the policy and objects of an enactment for the purpose of identifying the scope of a discretionary power which Parliament has conferred on the executive. As Lord Reid made clear in Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997, 1030B-C, the policy and objects of the Act must be determined by construing the Act. The underlying rule is that it is the intention of Parliament that defines the policy and objects of the Act, not the purpose or intention of the executive. The law-making function belongs to Parliament, not to the executive.

    The limited exception to the general rule that resort to Hansard is inadmissible which was recognised in Pepper v. Hart [1993] AC 593 is available to prevent the executive seeking to place a meaning on words used in legislation which is different from that which ministers attributed to those words when promoting the legislation in Parliament. That was the situation which appears to have arisen in that case where, as Lord Bridge of Harwich observed at p. 616G-H, the argument which was before the House on the first hearing of the appeal raised an acute question as to whether it could be right to give effect to taxing legislation which was capable of two possible interpretations in such a way as to impose a tax which the Financial Secretary to the Treasury had assured the House of Commons it was not intended to impose.

    No such issue has been raised in this case. As I have already sought to explain, the passages in Hansard to which your Lordships have been referred deal not with the meaning of words or possible interpretations of expressions that were or might be ambiguous but with statements made by ministers as to matters of policy. I consider that to permit resort to Hansard as a source for material of that kind to define the scope of a discretionary power conferred by Parliament would be to extend the decision in Pepper v. Hart well beyond its proper limits. I respectfully agree with my noble and learned friend Lord Bingham of Cornhill, for all the reasons that he has given, that it is important that the conditions laid down by the House in that case should be strictly insisted upon. I also agree with him that, if a minister were to give a categorical assurance to Parliament that a discretionary power would not ever be used in a given set of circumstances, that statement would be admissible against the executive in order to control its exercise. But I also think that it is important to stress that as matter of principle the decision in Pepper v. Hart should be confined to cases where the court is concerned with the meaning that is to be given to the words used in legislation by Parliament. It would be contrary to fundamental considerations of constitutional principle to allow it to be used to enable reliance to be placed on statements made in debate by ministers about matters of policy which have not been reproduced in the enactment. It is the words used by Parliament, not words used by ministers, that define the scope within which the powers conferred by the legislature may be exercised.

LORD HUTTON

My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend Lord Bingham of Cornhill and I gratefully adopt his account of the background giving rise to this appeal.

    The Court of Appeal rightly observed in its judgment ([2000] 3 WLR 141, 151 para 27) that by far the most important ground of Spath Holme Limited's application was the following one:

"27. The Order has not been made to further the purpose with which section 31 of the Act of 1985 was enacted namely to counter general inflation within the economy. The purpose of the Order is to achieve an extraneous purpose, namely to alleviate the perceived hardship or unfairness to one comparatively small class of tenants produced not by general inflation but by recent decisions prescribing the lawful and proper methods of determining fair rents. This use of the Order is wholly outside the intention with which the reserve power was originally introduced into section 11 of the Counter-Inflation Act 1973, continued into section 11 of the Housing Rents and Subsidies Act 1975 and consolidated into section 31 of the Act of 1985."

    The Landlord and Tenant Act 1985 is a consolidation Act, its long title stating:

"An Act to consolidate certain provisions of the law of landlord and tenant formerly found in the Housing Acts, together with the Landlord and Tenant Act 1962, with amendments to give effect to recommendations of the Law Commission. [30th October 1985] "

    In its judgment the Court of Appeal cited a number of authorities on the construction of consolidation Acts. Whilst there is some variation in the speeches in the leading cases on the proper approach to the construction of a consolidation Act, I consider that the underlying principle which emerges from the cases is that in construing a consolidation Act a court should not have regard to earlier enactments unless the language of the Act is unclear or ambiguous or there is something in the context of the Act or the relevant section which causes the court to consider that it should look for guidance to an earlier enactment or enactments.

    In Maunsell v. Olins [1975] A.C. 373 Lord Simon of Glaisdale delivered a speech which he had prepared in collaboration with Lord Diplock. He said at p. 392H:

"It is only where the actual words used in the consolidation Act are ambiguous (in the sense of being fairly susceptible of bearing more than one meaning in their context and register) that recourse may be had to any difference in phraseology of the corresponding provision in the repealed enactment as an aid to their construction."

    Lord Simon of Glaisdale also expressly warned at page 393E against a court narrowing the meaning of a statutory provision by having regard to the mischief at which an earlier statutory provision was aimed, and at p. 395A he said:

"The rule in Heydon's Case, 3 CoRep 7a itself is sometimes stated as a primary canon of construction, sometimes as secondary (i.e., available in the case of an ambiguity): cf. Maxwell, pp. 40, 96, with Craies on Statute Law, 7th ed. (1971), pp. 94, 96. We think that the explanation of this is that the rule is available at two stages. The first task of a court of construction is to put itself in the shoes of the draftsman? to consider what knowledge he had and, importantly, what statutory objective he had? if only as a guide to the linguistic register. Here is the first consideration of the 'mischief.' Being thus placed in the shoes of the draftsman, the court proceeds to ascertain the meaning of the statutory language. In this task 'the first and most elementary rule of construction' is to consider the plain and primary meaning, in their appropriate register, of the words used. If there is no such plain meaning (i.e., if there is an ambiguity), a number of secondary canons are available to resolve it. Of these one of the most important is the rule in Heydon's Case. Here, then, may be a second consideration of the 'mischief.'

In the instant case, however, we ourselves find no reason to resort to any secondary canon."

    In Farrell v. Alexander [1977] AC 59, 72G Lord Wilberforce agreed with the approach stated by Lord Simon of Glaisdale and Lord Diplock and referring to Maunsell v. Olins he said:

"Lord Diplock and Lord Simon of Glaisdale, on the other hand, thought the word was clear and for that reason considered that it was not legitimate to go back into the legislative history. If I may say so, on that hypothesis I would agree with them. I would agree and endorse the principle that it is quite wrong that, in every case where a consolidation Act is under consideration, one should automatically look back through the history of its various provisions, and the cases decided upon them, and minutely trace the language from Act to Act? a process, which, incidentally, has led to an argument of four days' length in this House. In recent times, because modern statutes have become so complicated, the courts myself included, (cf. Inland Revenue Commissioners v. Joiner [1975] 1 WLR 1701) rather too easily accept this process, whether under persuasion of counsel or from their own scholarly inclinations. But unless the process of consolidation, which involves much labour and careful work, is to become nothing but a work of mechanical convenience, I think that this tendency should be firmly resisted; that self-contained statutes, whether consolidating previous law, or so doing with amendments, should be interpreted, if reasonably possible, without recourse to antecedents, and that the recourse should only be had when there is a real and substantial difficulty or ambiguity which classical methods of construction cannot resolve."

See also Lord Simon of Glaisdale at pages 82 B-D and 84 A-E.

Lord Edmund-Davies at page 97A-B also stated that the harking back approach is only permissible if the wording of the section is ambiguous and its ambit obscure.

    In the light of these judgments I turn to consider the wording of section 31 of the Act of 1985 which provides:

"(1) The Secretary of State may by order provide for?

(a) restricting or preventing increases of rent for dwellings which would otherwise take place, or

(b) restricting the amount of rent which would otherwise be payable on new lettings of dwellings;

and may so provide either generally or in relation to any specified description of dwelling.

(2) An order may contain supplementary or incidental provisions including provisions excluding, adapting or modifying any provision made by or under an enactment (whenever passed) relating to rent or the recovery of overpaid rent.

(3) In this section?

"new letting" includes any grant of a tenancy, whether or not the premises were previously let, and any grant of a licence;

"rent" includes a sum payable under a licence, but does not include a sum attributable to rates or, in the case of dwellings of local authorities or new town corporations, to the use of furniture, or the provision of services;

and for the purposes of this section an increase in rent takes place at the beginning of the rental period for which the increased rent is payable.

(4) An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."

    In my opinion there is nothing ambiguous or unclear in the words of the section and I think, with respect, that the Court of Appeal fell into error because it did not first ask itself the question whether the words were unclear or ambiguous; rather it moved on to consider at the outset whether Parliament might have intended a more restricted power than the power which appeared to be given by the words of the section and it posed the question.

"… whether it is clear and unambiguous that Parliament intended to confer an unlimited and unrestricted power (other than the restraints involved in the application of Wednesbury principles); or whether the matter is in doubt.

If it is in doubt the court is entitled to look at the legislative history. In our judgment the matter is not clear; on the contrary it is doubtful."

But if the words of the section are clear the speeches in Maunsell v. Olins and Farrell v. Alexander counsel against the harking back to earlier legislation unless there is something in the context of the consolidation Act or the section which causes the court to consider that it should do so.

    There can be no precise test to apply to enable a court to determine whether the context of an Act or a section is such that it should look back at an earlier provision notwithstanding that the words of the section which it is considering are clear— in essence the question is, as Lord Edmund-Davies stated in Farrell v. Alexander at page 97A, whether its ambit is obscure. In Reg. v. Schildkamp [1971] A.C. 1, upon which Mr. Bonney Q.C. for Spath Holme Limited relied, Lord Upjohn considered that in construing section 332(3) of the Companies Act 1948 it was appropriate to look back at a provision in the earlier Companies Act of 1928, and stated at page 22G:

"The argument of counsel for the appellant was straightforward. Reading subsection (3) he submits truly that its terms are perfectly clear and simple. There is no ambiguity; the subsection clearly applies so as to create an offence on the part of a person knowingly carrying on a business— with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, and the circumstance that the company may subsequently have been wound up is quite irrelevant. The subsection plainly applies as a matter of language to the case where there has been no subsequent winding up. Looking at that subsection alone, I agree. Naturally he relies upon the contrast between subsection (1) where there is a reference to winding up and subsection (3) where there is not; a point to which I shall return later.

"But, my Lords, this, in my opinion, is the wrong approach to the construction of an Act of Parliament. The task of the court is to ascertain the intention of Parliament; you cannot look at a section, still less a subsection, in isolation, to ascertain that intention; you must look at all the admissible surrounding circumstances before starting to construe the Act."

And at page 23G:

"Nevertheless, in my opinion, the problem is essentially a question of construction of the 1928 Act and not the 1948 Act, for it was the former that created the new concept of making directors liable for the fraudulent trading of a company and the true scope and ambit of that liability, whether civil or criminal, must be determined by considering the terms of that Act and not of the subsequent consolidation Acts."

    But in my opinion in the present case there is nothing in the context of the 1985 Act or section 31 which justifies the court in looking back at provisions in the Counter-Inflation Acts of 1972 and 1973 and the Housing Rents and Subsidies Act 1975.

    The Act of 1985 contains a number of sections designed to give protection to the tenants of dwellings. One group of sections requires landlords to give certain information to tenants, another group of sections requires landlords to provide rent books to tenants, another group of sections implies terms as to the fitness of houses for human habitation, another group of sections imposes obligations on lessors to keep houses in repair, and another group of sections imposes limitations on service charges for flats. Therefore when one comes to consider section 31 in the context of the other provisions of the Act, it appears to me that the power given to the Secretary of State by order to restrict or prevent increases of rent is given to ensure fairness to tenants. Moreover, I find nothing which would cause a court to feel a sense of concern about such a power and to cause it to think that it should consider earlier legislation to find guidance as to the ambit of the power, particularly bearing in mind that since the first Rent Act in 1915 Parliament has frequently enacted provisions to protect tenants of dwellings from the obligation to pay rents which would impose an unfair burden upon them. Therefore I am of opinion that there is nothing in the context of the Act of 1985 or of section 31 which would provide a reason for a court to look back at earlier legislation and to infer from it that the apparent width of the power given by the words of section 31 is to be restricted to the counter-inflationary purpose for which the earlier statutory provisions were enacted. I am further of opinion that the presumptions and provisions to which the Court of Appeal refers in the latter part of paragraph 42 of its judgment are not of sufficient weight in the context of the 1985 Act to restrict the clear words of the section. And as I consider that there is no doubt as to the scope of the power given by the section there is no need for the restrictive approach to subordinate legislation taken by the Court of Appeal in McKiernon v. Secretary of State for Social Security [unreported, 26 October 1989] and approved by this House in Reg. v. Secretary of State for Social Security, Ex parte Britnell [1991] 1 W.L.R. 198, 204F.

    Therefore in restricting the ambit of section 31 I consider that the Court of Appeal was not observing the warning given by Lord Simon of Glaisdale and Lord Diplock in Maunsell v. Olins at p. 393E:

"For a court of construction to constrain statutory language which has a primary natural meaning appropriate in its context so as to give it an artificial meaning which is appropriate only to remedy the mischief which is conceived to have occasioned the statutory provision is to proceed unsupported by principle, inconsonant with authority and oblivious of the actual practice of parliamentary draftsmen."

    I further consider that Spath Holme Limited does not derive assistance from the principle applied in Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997 and stated by Professor Sir William Wade Q.C. in Administrative Law 5th ed. (1982) pp. 355-356 in a passage approved by this House in Reg. v. Tower Hamlets London Borough Council, Ex parte Chetnik Developments Limited [1988] A.C. 858, 872B:

"The common theme of all the passages quoted is that the notion of absolute or unfettered discretion is rejected. Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely— that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended."

    It is apparent that the Court of Appeal was influenced in its decision by this principle and the court stated at p. 154G para 40:

"In Padfield's case the House of Lords were not facing the same problem as we do in this case. Although the Agricultural Marketing Act 1958 was a consolidating Act, it was perfectly possible to find the purpose for which the power was conferred from that Act alone because it contained the whole of a comprehensive scheme. There is nothing in that case or in Julius's case which justifies the conclusion that, where the purpose cannot be derived from the Act itself or there is considerable doubt whether the apparently unlimited power is intended to be so, ordinary principles of construction cannot be prayed in aid."

    But in my opinion Mr. Parker Q.C. was correct in submitting, on behalf of the Secretaries of State, that an argument based upon this principle ought to be advanced by reference to the purpose to be derived from the particular statute in which the discretionary power is enacted. Thus Lord Reid said in Padfield at p. 1030B:

"Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act; the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the court."

And at p. 1052G referring to Julius v. Bishop of Oxford (1880) 5 App. Cas. 214 Lord Pearce said:

"That decision rested on the construction of the particular Act and it made clear that in the context of an Act is to be found the answer to the question how a power given by it is to be exercised."

    Therefore for the reasons which I have sought to give, I respectfully consider that the Court of Appeal erred when it expressed the opinion that it could look for a purpose in earlier legislation and use such a purpose to restrict the words of section 31 which, in my opinion, are clear and unambiguous.

    Because I am of opinion that the words of section 31 are clear and unambiguous I further consider that this case does not satisfy the first threshold test stated by Lord Browne-Wilkinson in Pepper v. Hart [1993] AC 593, 640C, with the agreement of the other members of the House, Lord Mackay of Clashfern L.C. dissenting, and that therefore it was inappropriate to refer to statements in Parliament in this case. I respectfully agree with my noble and learned friend Lord Bingham of Cornhill that the conditions laid down by the House in Pepper v. Hart should be strictly adhered to; otherwise in many cases time will be taken up and costs will be incurred without assistance to the court in its task of construction by references by counsel to statements by Ministers and by the weighing of those statements by the court.

    I think that where Lord Browne-Wilkinson referred at page 640C to legislation which is "ambiguous or obscure" he was referring to ambiguity or obscurity in the wording of a statutory provision, not to possible ambiguity as to the purpose for which Parliament gave a power. In my opinion this view finds support in the speeches of Lord Griffiths and Lord Oliver of Aylmerton. Lord Griffiths said at page 617E:

"The ever increasing volume of legislation must inevitably result in ambiguities of statutory language which are not perceived at the time the legislation is enacted. The object of the court in interpreting legislation is to give effect so far as the language permits to the intention of the legislature. If the language proves to be ambiguous I can see no sound reason not to consult Hansard to see if there is a clear statement of the meaning that the words were intended to carry."

Lord Oliver of Aylmerton said at page 620C:

"It is, however, important to stress the limits within which such a relaxation is permissible and which are set out in the speech of my noble and learned friend. It can apply only where the expression of the legislative intention is genuinely ambiguous or obscure or where a literal or prima facie construction leads to a manifest absurdity and where the difficulty can be resolved by a clear statement directed to the matter in issue."

    I consider, with respect, that if Lord Browne-Wilkinson's requirement that the language must be ambiguous or obscure were to be read as referring to uncertainty as to the purpose of a statutory provision where there is no ambiguity or obscurity in the wording of the provision, there would be some risk of the process feared by Lord Diplock in Fothergill v. Monarch Airlines Ltd. [1981] AC 251, 280B that those affected by a statute might have to

"… search through all that had happened before and in the course of the legislative process in order to see whether there was anything to be found from which it could be inferred that Parliament's real intention had not been accurately expressed by the actual words that Parliament had adopted to communicate it to those affected by the legislation."

     I would not accept the other grounds advanced by Spath Holme Limited for challenging the lawfulness of the Order for the reasons given by Lord Bingham of Cornhill and accordingly I would allow the appeal.