QUEEN’s BENCH DIVISION

R v Secretary of State for Trade and others ex parte Anderson Strathclyde plc

See annotated version at 1983] 2 All ER 233

COUNSEL: J A Swift QC, Raymond Jack QC and Richard Fowler for Anderson.

Simon D Brown for the Secretary of State and the Minister of State.

Richard Southwell QC and Peter Roth for Charter.

SOLICITORS: Clifford-Turner (for Anderson); Treasury Solicitor; Linklaters & Paines (for Charter).

JUDGES: Dunn LJ And Mccullough J

DATES: 1, 2, 3 FEBRUARY 1983

[*235] 3 February 1983. The following judgments were delivered.

DUNN LJ.

This is an application by leave on behalf Anderson Strathclyde plc (Anderson) for judicial review of the decision of the Minister of State for Trade made on 21 December 1982 not to exercise one or more of the powers specified in Parts I and II of Sch 8 to the Fair Trading Act 1973 so as to prohibit the acquisition by Charter Consolidated plc (Charter) of the whole of the undertaking or assets of Anderson the Monopolies and Mergers Commission having concluded, pursuant to s 72 of the Fair Trading Act 1973 that such an acquisition may be expected to operate against the public interest.

The relief sought is first an order for certiorari to bring up and quash the decision of the Minister of State for Trade made on 21 December 1982, second an order of mandamus to require the Secretary of State for Trade to consider, according to law, the report of the commission, and five declarations.

Although the notice before the court contains numerous grounds for the relief, only two grounds were persisted in in this court: (1) that the minister misdirected himself in law as to the proper separation of functions as between the commission and the Secretary of State, in that he failed to appreciate that he was bound to accept the conclusion of the majority of the commission that the proposed merger may be expected to operate against the public interest; (2) in the alternative if, contrary to (1), the minister had a discretion to consider the majority conclusion of the commission and to overrule it, he took into account irrelevant considerations, namely that it was common ground that the proposed merger would not prejudice competition, and that it was no more than speculative to conclude that the merger might harm the public interest.

Before considering the two grounds on which relief is sought, I must deal with the background. In February and May 1980, by two separate purchases, Charter brought a total of 10,775,000 shares in Anderson, giving Charter a total holding of 28.434% of the equity.

On 30 April 1982 Charter informed Anderson of its intention to make a bid for Anderson’s remaining shares in the afternoon of that day. On 4 May 1982 Anderson informed Charter that its board had unanimously decided to reject Charter’s proposal that discussions should take place leading to an agreed bid. Charter’s Stock Exchange announcements were made immediately after and the offer documents were posted on 13 May 1982. On 2 June 1982 the Secretary of State for Trade, in exercise of his powers under s 75 of the Fair Trading Act 1973, referred the matter to the commission for investigation and report within six months. Thereupon the offer lapsed, though Charter are still interested in acquiring Anderson.

After the reference the commission took evidence from numerous witnesses and reported on 22 November 1982. The commission sat in a group of six. A majority of four was against the merger. At para 9.20 of the report (Cmnd 8771) they set out a summary of the adverse effects:

 “We conclude that the proposed merger may be expected to have an adverse effect upon the management, effectiveness and labour relations of Anderson Strathclyde, and that this would tend to diminish effective competition in the supply of goods, would be contrary to the interests of purchasers of goods in the United Kingdom and would not promote competitive activity by Anderson Strathclyde in markets outside the United Kingdom. We also conclude that both because it would affect employment within Anderson Strathclyde and because it would detract from the dynamism of business in the region, it may be expected to have an adverse effect upon employment in a relatively depressed part of the United Kingdom. These effects may be expected to operate against the public interest unless offset by some advantages.”

Their recommendation appears at para 9.24:

“The adverse effects which we set out in paragraph 9.20 are not offset by any advantages which the proposed merger would confer. Therefore, on balance we consider that the merger may be expected to operate against the public interest. The [*236] adverse effects arise directly from the proposed merger, and we cannot devise any action which could be taken for the purpose of remedying or preventing them if the merger took place. We therefore recommend that the merger should not be permitted.”

A minority of two, including the chairman, on the same day signed a statement of dissent. They found no reason why the merger should not go forward. The statement of dissent forms part of the report. In para 9.42 the minority said:

“In our judgment, the evidence does not justify such a conclusion [that is to say the conclusion of the majority] on any point in this inquiry. The Fair Trading Act confers upon the Secretary of State far-reaching powers exercisable in case of a report of the Commission that a proposed merger may be expected to operate against the public interest. The Commission is required to base such a report on ‘particular effects, adverse to the public interest, which in the opinion of the Commission [the proposed merger] may be expected to have’: s 73(1)(b). If the intention of Parliament is judged, as it must be, from the language of the Fair Trading Act, we do not consider that the general possibilities and risks upon which the recommendation in this case is based amount to such material as Parliament intended should lead to ministerial intervention.”

On 21 December 1982 a letter was sent from the Scottish Economic Planning Department, Industrial Development Division, which is part of the Scottish Office, to the chief executive and deputy chairman of Anderson. The letter reads:

“You will wish to know what decision the Government has come to on the recommendation of the Monopolies and Mergers Commission. The following is the relevant extract from the public announcement made at 10.30 a.m. today: ‘Ministers have considered this Report with great care. The decision has been taken that, in all the circumstances of this case, it would not be right to stop the merger. But in leaving Charter to renew their bid, an assurance is being sought from them that Anderson Strathclyde will remain a Scottish Company with its registered office in Scotland.’ A full copy of the Press notice will be available later today and we shall forward a copy to you as soon as possible thereafter.”

The press notice, which was dated the same day, is in the following terms:

“The proposed merger between Charter Consolidated plc and Anderson Strathclyde plc. Monopolies and Mergers Commission report published.

“The proposed merger between Charter Consolidated plc and Anderson Strathclyde plc should be allowed to go ahead. Mr Peter Rees, Minister for Trade, announced this today on the publication of the Monopolies and Mergers Commission report on the proposed merger. An assurance is however to be sought that Anderson Strathclyde will remain a Scottish company, with its registered office in Scotland. Mr Rees said: ‘The Monopolies and Mergers Commission concluded by a majority of four to two that the proposed merger might be expected to operate against the public interest and recommended that it should not be allowed. Careful consideration has been given to the majority report, together with the powerful dissenting report of the minority, which included the Chairman of the MMC. The Director General has also given advice, which the Fair Trading Act requires to be taken into account: he has strongly recommended against preventing the merger. It is common ground that the merger would not prejudice competition. The sole question is whether the merger would harm other aspects of the public interest. In this connection the arguments based on possible industrial implications in Scotland require a particularly sensitive approach. But, taking all these matters into account, it is no more than speculative to conclude that the merger might harm the public interest. It is for these reasons that the decision has been reached that, in all the circumstances of this case, it would not be right to stop the merger. But in case Charter renew their bid [*237] an assurance is being sought from them that Anderson Strathclyde will remain a Scottish company with its registered office in Scotland.’”

On 12 January Anderson made an ex parte application for leave to apply for judicial review, which was granted by Glidewell J.

A fundamental point was taken in the course of the proceedings in this court by Mr Jack QC, one of the counsel for Anderson. He submitted that the Secretary of State had wrongly divested himself of his function under s 73 of the Fair Trading Act 1973 and had purported to transfer that function to the Minister of State for the Department of Trade. It was said that in those circumstances the case could be distinguished from the line of authority starting with Carltona Ltd v Comrs of Works [1943] 2 All ER 560, in that in this case the Minister of Trade was not purporting to stand in the shoes of the Secretary of State, who would retain responsibility for the decision, but was purporting himself to exercise powers that could only be exercised by the Secretary of State and to take full responsibility for the decision. Mr Jack said that consequently the decision was not the decision of the Secretary of State and was null and void and of no effect.

Mr Jack said that if he was wrong and the Secretary of State had retained responsibility for the decision, at the time that it was made he himself possessed a shareholding in Charter and it might be possible to submit that this was enough to vitiate the decision, although Mr Jack did not in fact make any such submission. If it had been made it would have been unsound. Before the decision could be vitiated it would be necessary to show that the Secretary of State had allowed his shareholding to influence his decision. Every action which the Secretary of State took in this case demonstrates to the contrary.

Mr Jack conceded that the evidence in support of the necessary factual basis of his fundamental submission, namely that the Secretary of State had divested himself of his decision-making function and referred it to the minister, was contained in the true meaning of certain statements made and answers given by ministers in both Houses of Parliament and reported in Hansard.

Neither the Secretary of State nor the minister filed an affidavit in this court, but counsel for both of them made an admission of the following facts for the purpose of these proceedings. Counsel admitted that because of the Secretary of State’s small shareholding in Charter, which, together with other share certificates, he had deposited with his bank with instructions not to deal in any of them so long as he holds ministerial office, the Secretary of State felt that he had disqualified himself from personally taking the decision in this case, concluding that it was more appropriate and in accordance with the recognised proprieties for the decision to be taken by the minister. In making that admission counsel made it plain that he did not accept either that the Secretary of State had divested himself of his statutory function by transference to the minister or otherwise, or that the Secretary of State had declined Parliamentary responsibility for the decision.

The question then arose whether this court could refer to Hansard so that Mr Jack could make good the factual basis of his submission. Counsel for the Secretary of State and the minister left that decision to the court, while pointing out the difficulty caused by the decision in Church of Scientology of California v Johnson-Smith [1972] 1 All ER 378, [1972] 1 QB 522. Counsel said that he was quite prepared to take the court through the relevant entries in Hansard which, he said, on a fair reading of all of them demonstrated that, taken as a whole, they formed no factual basis for Mr Jack’s submission.

The Church of Scientology case was a libel action. The defendant was a member of Parliament. The libel was alleged to have been published in the course of a television broadcast. The defendant pleaded fair comment on a matter of public interest and privilege. The plaintiffs, in reply, sought to rely on certain statements by the defendant in Parliament as showing malice. In order to prove those statements the plaintiffs applied to the judge to introduce the relevant extracts from Hansard as evidence at the trial.

Browne J excluded the evidence. In his judgment he reviewed the authorities and said that in his view the two relevant sub-paragraphs of the reply— [*238]

“must involve a suggestion that the defendant was, in one way or another, acting improperly or with an improper motive when he did and said in Parliament the things referred to in those sub-paragraphs. I accept the Attorney-General’s argument that the scope of Parliamentary privilege extends beyond excluding any cause of action in respect of what is said or done in the House itself. And I accept his proposition which I have already tried to quote, that is, that what is said or done in the House in the course of proceedings there cannot be examined outside Parliament for the purpose of supporting a cause of action even though the cause of action itself arises out of something done outside the House. In my view, this conclusion is supported by both principle and authority.”

(See [1972] 1 All ER 378 at 381, [1972] 1 QB 522 at 529–530.)

The judge then went on to cite Ex p Wason (1869) LR 4 QB 573, which shows that the same principle applies to criminal proceedings as to civil proceedings. The judge added ([1972] 1 All ER 378 at 382, [1972] 1 QB 522 at 531):

“But the Attorney-General limited what he said about the probable attitude of Parliament to the use of Hansard by agreement by saying that Hansard could be used only for a limited purpose. He said it could be read simply as evidence of fact, what was in fact said in the House, on a particular day by a particular person. But, he said, the use of Hansard must stop there and that counsel was not entitled to comment on what had been said in Hansard or to ask the jury to draw any inferences from it.”

Citations from Hansard in the courts have always been a delicate area, because of the constitutional importance of Parliament retaining control over its own proceedings and because of the extent of Parliamentary privilege. It was formerly necessary for a petition to be presented to the House for reference to be made to reports of proceedings of the House of Commons in Hansard. No such petition was necessary before reports of proceedings in the House of Lords were referred to in court. But on 31 October 1980 the House of Commons passed the following resolution:

“That this House while reaffirming the status of proceedings in Parliament, confirmed by Article 9 of the Bill of Rights, gives leave for reference to be made in future Court proceedings to the Official Report of Debates and to the published Reports and evidence of Committees in any case in which, under the practice of the House, it is required that a petition for leave should be presented and that the practice of presenting petitions for leave to refer to Parliamentary papers be discontinued.”

So it is not now necessary for a petition for leave to be presented before extracts from Hansard are referred to in court. But the question remains: for what purpose may Hansard be used in court?

Article 9 of the Bill of Rights (1688) provides:

“That the freedome of speech and debates or proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament.”

That article has been widely construed, as Browne J showed in Church of Scientology of California v Johnson-Smith [1972] 1 All ER 378 at 381, [1972] 1 QB 522 at 530. He said:

“It will be observed, and, indeed, the Attorney-General said, that the basis on which Blackstone puts it is that anything arising concerning the House ought to be examined, discussed, and adjudged in that House and not elsewhere (1 Bl Com (17th edn, 1830) 163). The House must have complete control over its own proceedings and its own members. I also accept the other basis for this privilege which the Attorney-General suggested, which is, that a member must have a complete right of free speech in the House without any fear that his motives or intentions or reasoning will be questioned or held against him thereafter. So far as the authorities are [*239] concerned it will be seen that the words used are very wide. In the Bill of Rights (1688) itself the word is ‘questioned’: ‘freedome of speech and debates or proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament.’ Blackstone uses the words ‘examined discussed or adjudged’: they ought not to be examined discussed or adjudged elsewhere than in the House.”

In my judgment there is no distinction between using a report in Hansard for the purpose of supporting a cause of action arising out of something which occurred outside the House, and using a report for the purpose of supporting a ground for relief in proceedings for judicial review in respect of something which occurred outside the House. In both cases the court would have to do more than take note of the fact that a certain statement was made in the House on a certain date. It would have to consider the statement or statements with a view to determining what was the true meaning of them, and what were the proper inferences to be drawn from them. This, in my judgment, would be contrary to art 9 of the Bill of Rights. It would be doing what Blackstone said was not to be done, namely to examine, discuss and adjudge on a matter which was being considered in Parliament. Moreover, it would be an invasion by the court of the right of every member of Parliament to free speech in the House with the possible adverse effects referred to by Browne J.

On those grounds we refused Mr Jack’s application to refer to the extracts from Hansard, although we had already read them de bene esse since they were exhibited to an affidavit and proved themselves.

Mr Jack then applied for an adjournment to enable him to adduce further evidence, and to consider an application under RSC Ord 73, r 8 for leave to administer interrogatories to the Secretary of State. We also refused this application. It was made at an extremely late stage, at the close of the applicants” case, and the applicants must or should have known, from the very outset, the difficulties of proof with which they were faced, having regard to the decision in the Church of Scientology case.

The Fair Trading Act 1973 contains provisions which emphasise the importance of expedition on a reference by the Secretary of State to the commission in respect of a merger. The reason is almost too obvious to mention. Take this case. It is in the interests of the shareholders of both Anderson and Charter that a decision should be made, one way or the other, in the shortest possible time. The Take-Over Panel of the City of London are concerned that the legal position should be defined without delay. Proceedings for judicial review are not designed for detailed inquiry into contested facts. It is for the applicants to take all proper steps to put the facts on which they rely in support of the relief claimed before the court at the first opportunity. There is no reason to suppose that in view of their failure, after nearly six weeks from the announcement of the decision, to adduce further evidence on this issue they should be able to do so after a further adjournment, which would inevitably have to be a short one, and there is no reason to suppose that there is any ground for allowing an application to interrogate the Secretary of State.

After we announced our decision refusing the adjournment, Mr Jack conceded that he could not support his submissions as there was no factual basis on which he could do so.

I now turn to consider the submissions of leading counsel for Anderson. This involves a consideration of the detailed provisions of the Fair Trading Act 1973. Part V of the Act deals with mergers. The Secretary of State may refer a merger to the commission where it appears to him that it is or may be the fact that arrangements are in contemplation which, if carried into effect, will result in a merger situation qualifying for investigation: see s 75. A merger situation qualifying for investigation is defined in s 64(1) as being either (and I use a shorthand expression) a “monopoly situation”, or when the value of the assets taken over exceeds £15m, which has been increased by statutory instrument from the £5m mentioned in the Act. There is no monopoly situation here. The only ground for the reference is that the assets of Anderson to be taken over exceed £15m. [*240]

On a merger reference the commission is required to investigate and report on two questions: (a) whether a merger situation qualifying for investigation has been created, and (b) if so, whether the creation of that situation may be expected to operate against the public interest: see s 69.

The reference is required to specify a date, not exceeding six months, within which the report is to be made. No action is to be taken in relation to the report unless it is made before the end of the specified period or as extended by the Secretary of State up to a further three months: see s 70. Section 72 of the Act, so far as is material, is in the following terms:

“(1) In making their report on a merger reference, the Commission shall include in it definite conclusions on the questions comprised in the reference, together with—(a) such an account of their reasons for those conclusions, and (b) such a survey of the general position with respect to the subject-matter of the reference, and of the developments which have led to that position, as in their opinion are expedient for facilitating a proper understanding of those questions and of their conclusions.

“(2) Where on a merger reference the Commission finds that a merger situation qualifying for investigation has been created and that the creation of that situation operates or may be expected to operate against the public interest … the Commission shall specify in their report the particular effect, adverse to the public interest, which in their opinion the creation of that situation … have or may be expected to have and the Commission—(a) shall, as part of their investigations, consider what action (if any) should be taken for the purpose of remedying or preventing those adverse effects, and (b) may, if they think fit, include in their report recommendations as to such action.”

I need not read sub-s (3).

Section 73 is in the following terms:

“(1) The provisions of this section shall have effect where a report of the Commission on a merger reference has been laid before Parliament in accordance with the provisions of Part VII of this Act, and the conclusions of the Commission set out in the report, as so laid,—(a) include conclusions to the effect that a merger situation qualifying for investigation has been created and that its creation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest, and (b) specify particular effects, adverse to the public interest, which in the opinion of the Commission the creation of that situation, or (as the case may be) those elements in or consequences of it, have or may be expected to have.

“(2) In the circumstances mentioned in the preceding subsection the Secretary of State may by order made by statutory instrument exercise such one or more of the powers specified in Parts I and II of Schedule 8 to this Act as he may consider it requisite to exercise for the purpose of remedying or preventing the adverse effects specified in the report as mentioned in the preceding subsection; and those powers may be so exercised to such extent and in such manner as the Secretary of State considers requisite for that purpose.

“(3) In determining whether, or to what extent or in what manner, to exercise any of those powers, the Secretary of State shall take into account any recommendations included in the report of the Commission in pursuance of section 72(2)(b) of this Act and any advice given by the Director under section 88 of this Act.”

Section 82(3) provides:

“… if … (b) on a reference to the Commission … a member of the … Commission … dissents from any conclusions contained in the report on the reference as being conclusions of the … Commission, the report shall, if that member so desires, include a statement of his dissent and his reasons for dissenting.” [*241]

Section 84 provides:

“(1) In determining for any purposes to which this section applies whether any particular matter operates, or may be expected to operate, against the public interest, the Commission shall take into account all matters which appear to them in the particular circumstances to be relevant and, among other things, shall have regard to [and there are then set out five matters].

“(2) This section applies to the purposes of any functions of the Commission under this Act … ”

So that relates back to the previous sections to which I have referred which set out the functions of the commission, in particular s 72. Section 86(1) provides:

“… a copy of every report of the Commission … on a merger reference … shall be transmitted by the Commission to the Director [ie the Director General of Fair Trading] and the Minister or Ministers to whom any such report is made shall take account of any advice given to him or them by the Director with respect to a report of which a copy is transmitted to the Director under this section.”

Section 88 deals with action by the Director General in consequence of a report of the commission on a merger reference. I need do no more than refer to it. Section 91(2) provides:

“Before making any order under … section 73 of this Act … the Minister proposing to make the order shall publish, in such manner as appears to him to be appropriate, a notice [It then sets out what the notice has to contain, which includes a statement:] that any person whose interests are likely to be affected by the order, and who is desirous of making representations in respect of it, should do so in writing … before a date specified in the notice … and the Minister shall not make the order before the date specified in the notice … and shall consider any representations duly made to him in accordance with the notice before that date.”

Schedule 8 lists the powers exercisable by orders under s 73. Part 1 of the schedule contains the relevant powers. Those are orders which the Secretary of State is empowered to make.

The submission of leading counsel for Anderson was that on the true construction of the Act, if the commission or the majority of the commission conclude, as they did in this case, that a merger situation may be expected to operate against the public interest, and if they specify in their report, as they did, the particular effects adverse to the public interest which in their opinion the creation of the merger situation may be expected to have, then the Secretary of State is bound by that conclusion and his discretion is limited to a choice of which order may be made under Sch 8.

I cannot accept that submission. The words “the Secretary of State may by order” in s 73(2), and the words “in determining whether, or to what extent or in what manner” in s 73(3) indicate that the Secretary of State has a complete discretion whether to make any order or whether to make no order at all. Counsel’s construction would have required quite different words in sub-ss (2) and (3) to the words that we find.

His construction would also give power to the majority of the commission to decide whether a merger situation was adverse to the public interest, and is inconsistent with the provision in s 82(3) that a statement of dissent should be included in the report, indicating that the Secretary of State is entitled to take into account the whole report including the statement of dissent. It is also inconsistent with the duty placed on the Secretary of State, under s 86(1), to take account of the advice of the Director General and with his duty, under s 91(2), to consider representations made after notice and before making his order. As counsel for the Secretary of State and the minister said, if leading counsel for Anderson is right the Secretary of State would be unable to take action if there were a change of circumstances after publication of the report. [*242]

In my judgment, the Act read as a whole shows that the Secretary of State is not bound by the conclusions of the majority of the commission, that he has a wide discretion in deciding whether to make any order at all, and in exercising that discretion he is entitled to take into account all the relevant circumstances, and to consider the opinion of the minority of the commission, and also representations and advice from persons other than members of the commission.

There is another point. Leading counsel for Anderson urged on us a purposive construction of this statute. The Act itself places a limitation on freedom of contract. On counsel’s construction the right to limit freedom of contract would be vested in a majority of the commission, who are not directly responsible to Parliament, rather than in the Secretary of State who is directly responsible to Parliament. I cannot believe that that was the intention of Parliament.

Counsel sought to support his construction by reference to the Monopolies and Mergers Act 1965, which was the forerunner of the 1973 Act. He drew attention to the differences in wording of certain of the sections of that Act as compared with the provisions of the 1973 Act. He submitted that the 1973 Act showed a development in competition law so as to give more power to the commission. I do not find any assistance to be derived from looking at a different Act in order to construe the Act with which we are concerned. Indeed, I am doubtful if we should do so.

In Farrell v Alexander [1976] 2 All ER 721 at 725-726, [1977] AC 59 at 72 Lord Wilberforce said:

“Lord Diplock and Lord Simon of Glaisdale [in Maunsell v Olins [1975] 1 All ER 16, [1975] AC 373] 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 on 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 Comrs v Joiner [1975] 3 All ER 1050, [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.”

I find no difficulty, using what I believe to be “classical methods of construction”, in resolving the question which arises in this case from the words of the statute itself.

Assuming, however, that he was wrong on his first point of construction, leading counsel for Anderson nevertheless sought to challenge the exercise of the minister’s discretion on Wednesbury principles, by saying that the minister had taken into account two matters which he should not have taken into account: see Associated Provincial Picture Houses Ltd v Wednesbury Corp [1947] 2 All ER 680 at 682-683, [1948] 1 KB 223 at 228–229.

The first was the sentence in the press notice where it is stated: “It is common ground that the merger would not prejudice competition.” What the majority in their report said was that there would be no direct prejudice to competition, but because of the adverse effects which the merger might be expected to have, both on the management and labour of Anderson, there was likely to be an indirect effect on competition. [*243]

Counsel submitted that the press notice showed that the minister had misunderstood that and had proceeded on a wrong basis, namely that the merger would not prejudice competition. In fact, on the second page of the press notice the minister summarised the conclusions of the majority. He referred to certain paragraphs of the report by number, and he said:

“The majority concluded that the proposed merger might be expected to be against the public interest, to the extent that the management of the two companies might not mix well, which might lead to a loss of management effectiveness in Anderson, with an accompanying loss of morale. Labour relations could also be affected to the extent that conditions were created in which the present degree of co-operation of the labour force was not forthcoming. From that the majority also took the view that if the proposed merger had these effects, there might be consequential effects on employment in Scotland, both in Anderson’s own works and possibly among suppliers. Even if these effects were not to materialise, there remains the possibility of adverse effects on the region.”

He was, it seems to me, saying that the business of Anderson would be adversely affected by the merger which would inevitably make it less competitive.

In my view there is no ground for saying that the minister did not understand the basis on which the majority reported.

The second ground on which it is said that he took into account a matter which he should not have taken into account was to be inferred from the statement, “it is no more than speculative to conclude that the merger might harm the public interest”.

Leading counsel for Anderson referred us to passages in their report in which the majority specifically refer to the evidence in support of their conclusions, and he said in those circumstances the minister was wrong to say that their conclusion was “no more than speculative”. But on the basis which I have held to be the true basis, that the Secretary of State was entitled to have regard to the note of dissent, it is necessary to look at that. The two dissenting members of the commission said, in effect, that the evidence was insufficient to support the conclusion to which the majority had come.

In my view, it was a matter for the minister, in his unfettered discretion, to choose between those two views, taking into account any other relevant matters including the advice which he received from the Director General. He preferred the view of the minority. Whether he was right or wrong about that is a matter of political judgment, and not a matter of law.

No reason has been shown which would entitle this court, on well-established principles, to interfere with his decision on a matter of that kind. We have not gone into, and it is no part of the function of this court to go into, the merits of whether or not this proposed merger should be allowed. Our sole function is to consider whether the minister, in refusing to stop the merger, acted lawfully. That involves answering two questions and two questions only. (1) Did the minister have the power under the Fair Trading Act 1973 to take the course he did? He did have that power. (2) In exercising the power, did he take into consideration any matter which he should not have taken into consideration? He did not. Accordingly, this application, in my view, must fail and be dismissed.

McCULLOUGH J.

I agree with each of Dunn JJ’s conclusions and with his reasoning. I shall, however, put into a few words of my own the view which I have formed about the construction of s 73 of the Fair Trading Act 1973, which is the one point on which my mind hesitated during the course of the argument.

Section 72(1) requires the Monopolies and Mergers Commission to reach “definite conclusions”. Although the word “opinion” is to be found in 572(2) in relation to particular effects perceived to be adverse to the public interest, the same subsection contemplates that the commission will “find” that a merger situation may be expected to operate against the public interest. [*244]

Further, s 84(1) treats the function of the commission in this respect as one of “determining” whether a particular matter may be expected to operate against the public interest. “Definite conclusions”, “find”, “determining”, these are all strong words.

I have in addition been exercised by the fact that s 73(3) provides that the advice given by the Director General, to which the Secretary of State has to have regard, is not the general advice which he may give in the circumstances contemplated by s 86 after a copy of the commission’s report has been transmitted to him, but the more limited advice which he must give under s 88, which deals primarily with the question of whether the adverse effects contemplated by the commission may satisfactorily be overcome by the obtaining of undertakings.

These features lend, I think, a measure of support to the argument of leading counsel for Anderson.

Be that as it may, the options given to the Secretary of State by s 73(2), and recognised by s 73(3), are expressed in the most unfettered terms. He may exercise one or more of his powers under Sch 8. He may obtain a suitable undertaking or undertakings. Or he may do nothing, that is nothing to prevent the adverse effects foreseen by the commission. This in turn implies that he may evaluate for himself the conclusions and opinions reached by the commission. Indeed, not only may he do so, he must.

I am fortified in this view by s 82(3), which contemplates that the Secretary of State shall be provided with a statement of dissent from any member of the commission who dissents from any “conclusion” contained in the report, the word is not “recommendation” but “conclusion”, and he may be provided with a statement of the reasons for his dissent. What purpose can lie behind this other than that the Secretary of State should evaluate both the conclusions and the reasoning of the minority? This must imply that the conclusions and reasoning of the majority must, likewise, be evaluated.

Had the intention of Parliament been as leading counsel for Anderson contends, I cannot accept that s 73(2) and (3) would have been worded as they have been. I would have expected to see a provision along the following lines (and I am not drafting): “In the circumstances mentioned the Secretary of State shall exercise such one or more of his powers under Sch 8 as he may consider it requisite to exercise for the purpose of remedying or preventing the adverse effects specified in the report, unless he is of the opinion that the said purpose will be achieved by such one or more undertakings as he has obtained.”

Despite the other provisions to which I have referred, I regard s 73(2) as unambiguous. If, contrary to my opinion, there is an ambiguity, in my judgment, it should be resolved in the way least calculated to lead to ministerial interference with the rights of private citizens, individual or corporate, to contract as they please.

lf it were permissible to draw any conclusion from a comparison of the wording of s 73 of the 1973 Act with that of s 3 of the Monopolies and Mergers Act 1965, the conclusion which I would draw would be that whereas by the earlier Act the Board of Trade was permitted to interfere to remedy or prevent mischiefs which it itself foresaw, the later Act cut down that power to interfere, confining it to the remedying and prevention of adverse effects which had been foreseen by the commission after investigation.

Finally, I would underline, as has Dunn LJ, the importance of remembering that this court has not been called on to decide whether or not the proposed merger would have adverse effects on the public interest. That evaluation was not for us. Our function was to see whether it has been demonstrated that the Secretary of State, if I may put it colloquially, broke the law in deciding as he did. In my judgment, he did not.

Application dismissed.