Law Report: Ministers' speeches admissible to show purpose of Act

Three Rivers District Council and others v Bank of England (No 2); Queen's Bench Division (Mr Justice Clarke); 27 November 1995

The court was entitled to admit in evidence parliamentary materials such as speeches by ministers, not only to help it construe a particular statutory provision whose meaning was ambiguous or unclear, but also in a case where the purpose or object of the statute as a whole, rather than any particular provision, was in issue.

Mr Justice Clarke granted an application made by the plaintiffs, Three Rivers District Council and 6,018 other depositors of the Bank of Credit and Commerce International SA (BCCI) (now in liquidation), during a preliminary hearing in their action against the Bank of England over its alleged failure properly to supervise BCCI's activities.

The plaintiffs' application was for leave to refer to speeches made by the Minister of State at the Treasury on 23 November 1978 when moving the second reading of the Bill which became the Banking Act 1979, and by the Economic Secretary to the Treasury on 28 November 1986 when moving the second reading of the Bill which became the Banking Act 1987.

The plaintiffs sought to refer to those speeches to rebut the Bank of England's argument that the 1979 and 1987 Acts were not intended to impose on the Bank of England an obligation to protect depositors from negligence, impropriety or dishonesty on the part of credit institutions, and to show that that was indeed the intention of Parliament in passing those Acts.

The Bank of England referred to Pepper v Hart [1993] AC 593 and Melluish v BMI (No 3) Ltd [1995] STC 964 as authority for the proposition that parliamentary materials were admissible only where 1) the question in issue was the true construction of a provision in the relevant statute; 2) that provision was ambiguous or obscure or its literal meaning led to absurdity; or 3) the parliamentary statements were directed to the specific provision under consideration.

Sir Patrick Neill QC, David Vaughan QC, Dominic Dowley and Robin Dicker (Lovell White Durrant) for the plaintiffs; Nicholas Stadlen QC, Paul Lasok QC, Mark Phillips, Bankim Thanki and Rhodri Thompson (Freshfields) for the Bank of England.

Mr Justice Clarke said that in both Pepper v Hart and Melluish v BMI the House of Lords was considering the construction of a particular statutory provision. It was not concerned with the case where the court might be considering the purpose or object of a statute for some other reason. It was also considering a purely domestic statute.

It did not necessarily follow that the principle applied so narrowly to a case where the purpose of the legislation was to introduce into English law the provisions of an international convention or European directive, even where the question was one of construction; a fortiori to a case where the question was not one of construction.

In the light of the principles discussed in Pickstone v Freemans plc [1989] 1 AC 66 at 112, Garland v British Rail Engineering Ltd [1983] 2 AC 751 at 771, and Litster v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546, it seemed that, where the court was seeking to construe a statute purposively and consistently with any relevant European materials, including directives, it was of particular importance to ascertain the true purpose of the statute.

The plaintiffs argued that one of the purposes of the 1979 Act was to comply with the UK's obligation under EC Council Directive 77/780, and that in order to consider whether and to what extent that was so, reference should be made to the parliamentary materials.

It appeared that the object or purpose of the statutes might be material to a number of aspects of the preliminary issues which his Lordship was considering.

It was at least relevant to the Bank of England's submission, that it owed no duty to the plaintiffs, that Parliament had enacted two statutes neither of which contained an express duty, and one of which provided in effect that neither the bank nor its servants or agents should be liable for anything done or omitted to be done in the discharge or purported discharge of its functions under that Act, in the absence of bad faith (section 1(4) of the 1987 Act).

It also seemed that the purpose and object of the statutes might be relevant to the issues between the parties arising out of the 1977 Directive.

His Lordship accepted the plaintiffs' argument that he should look at the ministerial statements and concluded that nothing in the authorities prevented him doing so.