Essay: Statutory interpretation (CQN RTM Company Limited)

Word Count: 2387
Parties: CQN RTM Company Limited (Appellant), (1) Broad Quay North Block Freehold Limited (2) Broad Quay Management Company Limited (Respondents)
Court: Upper Tribunal (Lands Chamber)
Citation: [2018] UKUT 183 (LC)
Judges: His Honour Judge Hodge QC
Facts: the premises are part of a redeveloped site; located North of a central tower block.
It (and the building South of the tower block), comprises a small basement; two ground level commercial units; and residential flats. They are not inter-dependent; have no load-bearing connection, and; were constructed of different materials.
The two buildings adjoin in the basement by floor slabs; built of different materials and supported separately on different pillars. They join but are not connected.
A ramp of the underground car park and its ceiling are part of the structure of the car park; located underneath the tower block and the South building. However, part of the ramp is under the premises.
There is no visible division between the buildings.
Procedural History: On appeal from First-Tier Tribunal (FFT) Property Chamber (Residential Property).
Issue: was the building in question ‘structurally detached’, and therefore self-contained, regards s.72 (2) of the Commonhold and Leasehold Reform Act 2002?
Ratio: ‘structural’, in terms of ‘structurally detached’, means ‘appertaining or relating to the essential or core fabric of the building’.
Rationale: the court followed the approach in No 1 Deansgate and Albion on the meaning of ‘structurally detached’. The appeal is based on the application of law; it fails if the FTT’s reasons for its decision show it applied the correct law. As such:
1) The FTT’s judgment was not inadequately reasoned. It is clear they regarded the car park ceiling and its floor, or base, as a single structure;
2) It is clear why the FTT rejected the need for there to be a load-bearing connection between the two buildings; and
3) Whilst inter-dependency may constitute structural attachment; its absence does not conclude structural detachment.
Disposition: the appeal was dismissed.
Commentary: this case demonstrates the issues with statutory interpretation. Judges, lawyers, and the parties themselves, all interpret words in statutes differently; making it difficult to provide clarity and consistency in the law. Also, it makes it difficult for companies such as the one in this case to follow the law. From this, evidently ‘structurally detached’ requires statutory definition.
Introduction:
‘Interpreting any document is more of an art than a science’; the views of Lord Templeman. Statutory interpretation plays a dynamic role in every case passing through the Judiciary. Indeed, it is significant in every court in the land. As such, why is it so controversial?
Parliamentary Sovereignty is an entrenched principle of the British constitution. Certainly, courts accept Parliament are better equipped to make laws; they are the democratic arm of the state and courts should not prevent the will of the people. Thus, they always start with the literal approach when interpreting any statute. As Michael Zander stated; it is the ‘chief duty of the court when faced with a problem of statutory interpretation…to discover the intention of parliament’.
Oliver Wendall Holmes Jr. describes precedent metaphorically: ‘the life of the Law has not been logic; it has been experience’. Precedent conforms to respecting the Rule of Law by adhering to many of the eight sub-rules coined by Lord Bingham. Such as laws being clear and practicable and legal questions being resolved by application of the law, not by the discretion of judges.
Was literalism the best approach in CQN RTM Company Limited V Broad Quay North Block Freehold Limited? This essay addresses the evolution of literalism, purposivism and precedent; and their importance in the legal system.
The Literal Approach:
Ian McLeod described literalism as ‘a temporary aberration’ owing to Parliamentary Sovereignty and the progressive democratic reform in the late 19th-century. Leading judges to accept their role as being told what to do by Parliament; not the strict separation of powers envisaged by Montesquieu. Entrenched by Revolutionary activity between 1789 and 1848; illustrating consequences for judges who do not follow popular will. Consequently, literalism has been maintained for more than two centuries. Indeed, the principle was softened due to the accession to the European Union (EU); demonstrated by Pepper (Inspector of Taxes) v Hart establishing situations in which courts can look to pre-enactment materials in identifying intentions of Parliament.
Literalism was contested during Brexit discussions in 2016. The Supreme Court ruled in 2017 the Executive could not trigger Article 50 without Parliamentary approval. Part of the process leading to this decision was evaluating what the intention of Parliament was, regarding the EU, in the European Communities Act 1972. Thus, searching for the intentions of Parliament at the time of enactment, demonstrating literalism.
On the topic of EU law, the European Court of Justice (ECJ) focuses on purposivism, not literalism. Largely because member states use different languages, and are based on completely different legal systems and constitutions. In fact, many judgments in the ECJ operate against the literal meaning, illustrated by Commission v Kingdom of the Netherlands arguing the question which the claim was based could not ‘be decided by reference to the [text]’. Instead, related to the objective of the procedure in question. Showing, while literalism can be considered the ‘best’ approach in one legal system, or one particular case, it is in no way universal.
However, in English law, many judges will not depart from literalism as they are concerned not to usurp the Legislature. Despite this, it has been seen to defeat intentions of Parliament. Demonstrated by Whitley v Chappell where a person impersonating a dead person in an election was not convicted, as dead people are not entitled to vote. Suggesting, the law does not take into account the consequences. Contrastingly, Duport Steel v Sirs demonstrates the commitment to Parliamentary Sovereignty as per this case courts cannot depart from the literal meaning even if it results in an absurd outcome. Showing it does respect significant constitutional principles: it is for Parliament to address and amend such legislation, not the courts. Thus, if repugnant outcomes are caused by legislation; it is up to Parliament to recognise this and act accordingly. Shown by Fisher v Bell which prompted the enactment of s1 Restriction of Offensive Weapons Act 1961.
Despite this, tax legislation demonstrates how literalism is difficult in its application. Particularly, the fact tax legislation is highly complex entrenches the difficulty of ascertaining the actual intentions of Parliament. Moreover, the precedent set has not provided a clear and consistent framework for future cases to follow; adding to the overall problem. Suggesting, literalism is not the best approach in this situation.
Literalism is evident throughout CQN RTM Company Limited. The Commonhold and Leasehold Reform Act 2002 did not provide a definition for ‘structurally detached’; as such the definition was developed by case law. The appellant argued ‘…those words should be given their ordinary meaning’, following literalism.
Moreover, the cases referred to in the judgment used literal interpretation; Parsons v Gage stated: ‘as a matter of ordinary English, I should regard the meaning as reasonably plain…’. In Pearlman v Harrow School Eveleigh LJ referred to the judge at first instance, stating he felt he ‘had the right conception of what Parliament meant by ‘structural’; referring specifically to Parliament’s intentions. In Albion Residential Limited v Albion Riverside Residents RTM Company Limited the respondents used the purposive approach. But, the Upper Tribunal (UT) considered such approach as inappropriate; stating it is better to remain with the literal approach, as it is the best way to avoid ‘disputes or uncertainty’.
The Purposive Approach:
Purposivism first resurfaced after Heydon’s Case, during the period after World War Two. Bourne v Norwich Crematorium Ltd illustrated purposivism actually contributes to the effectiveness of interpreting statutes; a previously disapproved view.
Lord Denning and Lord Diplock ‘championed’ the purposive construction of statutes. Recognising the benefits of such approach allowing the law to evolve with contemporary society. Demonstrated by R v Secretary of State for Health which furthered the purposive approach, and related to advances in genetic technology. Lord Steyn observed as Parliament passes legislation, knowing it will be in place for many years, it leaves opportunity for it to cover scientific developments unknown to Parliament at the time of enactment. Fitzpatrick v Sterling Housing Association Ltd illustrates Denning and Diplock’s point by example of same-sex relationships. In the judgment, Lord Nicholls discussed how the word ‘family’ was left by Parliament to be flexible related to the changing approach as to what constitutes a family.
Despite this, in CQN RTM Company Ltd the approach decided by Judge Hodge was largely the literal approach. Entailing while the purposive approach may now be more common, literalism is still used to the foremost extent. Entrenched in Albion, where the respondents used the purposive approach but the UT did not consider that such approach was appropriate.
Contrastingly, it was used in the case by the appellants. Arguing, ‘structural abutment’ was not a basis for distinguishing No.1 Deansgate (Residential) Ltd v No.1 Deansgate RTM Co Ltd seeing as the word ‘structural’ was intended to qualify the word ‘detached’ in some significant manner; thus, looking at other words in the statute and therefore demonstrating purposivism. It was also stated ‘it is necessary to afford a meaning to structurally attached in that context’ when considering the purpose of s72 (2). Moreover, it is clear the FTT in CQN RTM Company Ltd used the purposive approach when they stated: ‘one must interpret the wording of the statute and then apply that meaning to the facts’.
A number of aids can be taken into account when considering interpretation; either internal or external. While rare, a statute may contain an ‘express purpose section’; examples perhaps including the Children Act 1989 and the Arbitration Act 1996 which give guidance in how interpretation could be addressed. Stephens v Cuckfield Rural District Council illustrates internal aids in context, as it referred to marginal notes in the judgment. Additionally, in CQN RTM Company Ltd the appellant submits s72 (3) must be considered when looking at the definition of ‘structurally detached’; thus, looking to other provisions in the act, an example of an intrinsic aid.
The use of extrinsic aids is demonstrated in CQN RTM Company Ltd relating to the meaning of ‘structure’; ‘structural’ and; ‘structurally’, using ‘Stroud’s Judicial Dictionary of Words and Phrases (8th edition)’. Similarly, No.1 Deansgate used the Oxford Dictionary to help with the definition of ‘structurally’.
Looking at related statutes is another aspect of the purposive approach. In terms of whether another statute is ‘in pari materia’; therefore, on the same subject. Shown in CQN RTM Company Limited where the appellants used the 1993 act to assist with the current definition in the 2002 act.
Precedent:
Judicial precedent is a common law doctrine and a key principle in English Law. Richard Buxton stated the purpose of the law is to solve disputes; not reform the law. Precedent aims to achieve consistency, which is important regarding the notion of formal justice: similar cases should be decided in the same way. Without precedent, Cardozo believed judges would have to undertake an evaluation of the law every time a new case arose. However, there is tension between consistency and authority in the law; and the law being responsive.
The strict reliance on stare decisis was evident in Cassell and Co Ltd V Broome. Lord Hailsham stated the Court of Appeal could not advise judges to ignore decisions of the Lords; courts must ‘accept loyally the decisions of the higher tiers’. Similarly, in CQN RTM Company Ltd the First Tier Tribunal (FTT) was bound by vertical stare decisis to follow decisions by the UT. However, they distinguished on the basis of different material facts: ‘the Tribunal agrees with the Respondents that No 1 Deansgate is distinguishable…’. Although the decision on whether or not to distinguish was contested by the appellants. Showing, the role precedent plays can be unclear.
All courts will attempt to follow decisions made in the same level court; such as different divisions of the same court. Shown whereby Judge Hodge followed horizontal precedent: ‘whether or not it is strictly binding upon me, I consider that I should follow the approach of this Tribunal…’. Generally, judges are bound to follow if the case facts are the same, or similar; in ‘the interests of legal certainty’.
Persuasive precedent was also evident. Persuasive precedent meaning the court is not obliged to follow it but may consider aspects of the judgment when deciding its own. Shown by Albion where it was stated by the appellant the observations by the tribunal, in that case, are persuasive, regarding the ‘purpose of the qualifying definition’. This is regarded as persuasive as the material facts of the two cases were different. If the material facts of the two cases were the same, or similar, it would have been binding precedent due to the hierarchy of the courts.
Conclusion:
Statutory interpretation is a controversial and complex; yet critical part of the English legal system. It is approached differently by other common law jurisdictions and civil law systems. Indeed, the nature of the British constitution has a significant impact on how statutory interpretation operates.
Regarding CQN RTM Company Ltd, was literalism the best approach in determining what ‘structurally detached’ meant? No single approach of statutory interpretation can ever be regarded the best approach; there are aspects of each that are better, and worse than others. Overall, it would appear the use of literalism was the best approach in determining this case; particularly as Judge Hodge was aiming to provide the consistency that cases related to this legislation had not provided. Moreover, precedent played a significant role throughout the judgment. From previous cases, a number of ‘propositions’ were drawn up to be followed in future cases; providing the framework of rules precedent is supposed to provide.
Still, the argument of literalism versus purposivism is a contemporary one. Alexander Hamilton illustrated an activist approach; ‘laws are a dead letter without courts to expound and define their true meaning and operation’. Contrastingly, Sonia Sotomayor illustrates a non-activist approach; the ‘task of a judge is not to make the law – it is to apply the law’. Surprisingly, the latter is the view of a current Supreme Court Justice; whereas the former demonstrates a 16th-century view. Thus, the views on different types of statutory interpretation are and will continue to be, dynamic.