Inspector of Taxes

Explain the rule in Pepper (Inspector of Taxes) v Hart [1993] AC 593, as it now applies. Evaluate its wisdom. (Look at both sides of the argument). ANSWER Introduction This paper discusses the rule established in the 1993 House of Lords case of Pepper (Inspector of Taxes) v Hart[1] and its current application. The rule is evaluated and conclusions are drawn. In essence, this rule of interpretation provides that where primary legislation is deemed to be obscure or ambiguous and its meaning is difficult to ascertain the courts may, where certain conditions are met, take into account statements made in Parliament by the promoters of the relevant Bill in construing and applying the legislation. The case can be considered as groundbreaking given the previous status of Article 9 of the Bill of Rights 1689, which provides: “…the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament..” Until the Pepper v Hart decision, the use of Hansard for the purpose that the decision advocates would have been considered to contravene the rule of Parliamentary privilege.. Article 9 has long been considered one of the great foundation principles and ultimate guarantors of Parliamentary democracy in that it protects members of each House of Parliament, giving them the right to completely unfettered free speech and the power to debate absolutely freely. It is submitted that there is clearly a good and strong historical rationale for this rule. When the Bill of Rights was adopted in 1689 Parliamentary democracy was in its infancy and concerns about the independence of members of Parliament was both profound and well founded. That said however, prior to the decision in Pepper v Hart there was clearly room for the adaptation of the Article 9 principle to accommodate modern conditions. Pepper (Inspector of Taxes) v Hart (1993) The case concerned a question as to the correct interpretation of a tax law provision. The statutory definition of the disputed expression was ambiguous. Relying on the wording in the Act, the Inland Revenue had imposed tax at a certain level, whereas during the Committee Stage of the Finance Bill that included the provision, in the House of Commons the Financial Secretary to the Treasury suggested a different interpretation that was more favourable to the party in this case. The House of Lords ruled that clear statements made in Parliament regarding the purpose of legislation in the course of its enactment may well be used by courts so as to guide the construction of unclear statutory provisions. It is submitted that this ruling is well founded given that the use of such statements does not amount to questioning a proceeding in Parliament and therefore does not contravene Article 9 of the Bill of Rights. It can in fact be argued that quite apart from questioning or subjugating the independence of Parliament and its debating process, the courts would merely be giving true effect to exactly what was said and done at Parliament.. In Lord Browne-Wilkinson words: “I trust when the House of Commons comes to consider the decision in this case, it will be appreciated that there is no desire to impeach its privileges in any way.. Your Lordships are motivated by a desire to carry out the intentions of Parliament in enacting legislation and have no intention or desire to question the processes by which such legislation was enacted or of criticising anything said by anyone in Parliament in the course of enacting it. The purpose is to give effect to, not thwart, the intentions of Parliament.’ Given the principle of Parliamentary sovereignty it is hard to imagine how the ruling in Pepper v Hart could thwart the intentions of Parliament. In providing more information as to the intentions of Parliament the ruling can serve only to enhance the accuracy with which the fruit of Parliamentary endeavour is applied by the courts. Most significant is the view of Parliament itself. The Joint Parliamentary Committee on Parliamentary Privilege found the ruling in Pepper v Hart acceptable.[2] While stressing that Parliament must be diligent and vigilant in protecting free speech, and stating that every departure by the courts must be thoroughly scrutinised, the Joint Committee came to the conclusion that the Pepper v Hart decision was “unobjectionable”. It reasoned that this use of Parliamentary proceedings is “benign” and this finding is supported by this commentator. The Committee recommended that Parliament should not seek to disturb the decision in the 1993 case although it should remain careful to ensure that the consequences of the decision did not lead “to any general weakening of the prohibition contained in Article 9”.[3] Criticism of the Ruling in Pepper v Hart Steyn has argued that the only relevant intention of Parliament can be its intention to enact the statute exactly as printed. The necessary corollary of this simple and black letter analysis would appear to undermine the centrality of the reasoning in Pepper v Hart[4]. It can be contended that the record of Hansard does not display the will of Parliament, but merely its thought processes in arriving at its will and therefore there may be some substance to Steyn’s analysis. Lord Mackay dissented in the Pepper v Hart ruling. He reasoned that the effect of the ruling would be to coerce lawyers to refer to Hansard habitually in subsequent cases and that this would elongate and complicate proceedings. It is submitted that this concern has been to some extent rendered nugatory by advances in technology in recent years however. Internet searches of Hansard can now be carried out conveniently and at great speed. Lord Mackay was also concerned that the ruling might be abused by Parliamentarians aware of its consequences who are intent on manipulating the subsequent interpretation of an Act by making constant reference to some point in proceedings recorded in Hansard. Finally, Lord Mackay stressed that there was a significant risk of over-reliance on Hansard in statutory interpretation. That said however, the House of Lords, in the 2001 case of R v Secretary of State for the Environment, Transport and the Regions ex p. Spath Holme Ltd [5], stipulated that the Pepper v Hart conditions for admissibility must be strictly adhered to so as to limit the amount of Parliamentary material relied on by the courts. In the 2003 case of Wilson and others v Secretary of State for Trade and Industry the House of Lords endorsed the ruling of Pepper v Hart, confirming its parameters and accepting that its fundamental raison d’tre was to oblige the executive to honour the legitimate expectations it had created. It was found: “The court is called upon to evaluate the proportionality of the legislation, not the minister’s exploration of the policy options or of his explanations to Parliament. The latter would contravene Article 9 of the Bill of Rights..” Now of course Explanatory Notes are attached to every Bill and published alongside new Acts of Parliament. In the 2002 case R (Westminster City Council) v National Asylum Support Service,[6] Lord Steyn confirmed that he considered Explanatory Notes admissible even where the statute was clear. It is submitted that the most important consideration must be the determination of the will of Parliament. All other factors are subordinate to that. Concluding Commentary It is submitted that the rule in Pepper v Hart should be welcomed as an aid to the interpretation of statute. From a neutral point of view it is surely to the benefit of the overarching legal system that courts are permitted to use statements made in Parliament concerning the purpose of Bills as a means of guiding the interpretation of the ambiguous provisions of a statute. If there is clear guidance in a Bill as to the purpose of a provision it would seem nonsensical that judges are restricted from reliance upon it. The law in this regard should function as a single entity and not disparate and disengaged components. Balanced against this is the need to preserve absolutely the freedom of Parliamentarians to speak and debate without fear or favour in the pursuit of Parliamentary business.. However, it is argued that the rule in Pepper v Hart does not represent an unreasonable or unwarranted incursion into that freedom. If Parliamentarians are sufficiently motivated to speak on a Bill in Parliament with a view to that Bill becoming an Act of Parliament they should definitely be prepared for their words later to be used in understanding the purpose or substance of the new law ultimately passed. After all, we live in an open and free democracy. There is no good reason why ambiguous statutes should be left in the abstract ether when perfectly sound guidance may be available to inform the judge in the record of Hansard. In conclusion, despite the concerns of commentators such as Steyn, the ruling in Pepper v Hart is both sound and pragmatic. The wisdom of the ruling is solid and its democratic credentials are sovereign. One wonders why it took so long in the making. Those that make our laws should be prepared to have their relevant words considered when those laws fall for application in the courts and the proper course of action is uncertain. Parliament itself has ratified the decision, and that is the acid test.. THE END EXACT WORD COUNT FOR TEXT OF ANSWER ONLY : 1524 GLOBAL DOCUMENT WORD COUNT : 1624 BIBLIOGRAPHY Bill of Rights 1689 Littleboy C., Kerry R., Pepper v Hart, House of Commons Library, SN/PC/392, 22 June 2005 Steyn J., “Pepper v Hart; A Re-examination”, Oxford Journal of Legal Studies, Vol. 21, No 1, 2001, p66. Cases as footnoted drawn from original law reports 1

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Footnotes

[1] [1993] AC 593. [2] Littleboy C., Kerry R., Pepper v Hart, House of Commons Library, SN/PC/392, 22 June 2005, p.3. [3] Ibid, p.3. [4] Steyn J., “Pepper v Hart; A Re-examination”, Oxford Journal of Legal Studies, Vol 21, No 1, 2001, p.66. [5] [2001] 2 AC 349. [6] [2002] 1 WLR 2956.

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