QUEEN'S BENCH DIVISION (CROWN OFFICE LIST)

R v Independant Television Commission, Ex parte Church of Scientology and
Another

CO/227/96, (Transcript: Smith Bernal)

JUDGE: Dyson J

DATE: 22 May 1996

Lord Lester and M Fordham for the Respondent; M Beloff QC, P Pannick QC and
R Singh for the Applicants
Allen & Overy; Hodkin & Co, West Sussex

DYSON J

This application arises from the manner in which the respondents, whom I
will call the ITC, exercised their statutory functions under the
Broadcasting Act 1990.

The relevant statutory context is as follows: s.9(1)(a) of the 1990 Act
imposes a duty on the ITC to draw up a Code:

"Prescribing the advertisements and methods of advertising or sponsorship to
be prohibited, or to be prohibited in particular circumstances".

Paragraph 11 of the ITC Code of Advertising Standards and Practice
states:"Subject to the generality of the Code, religious advertising is
governed by the rules set out in Appendix 5". Appendix 5 regulates religious
advertising, primarily by reference to its content. But at para 5 it states:

"No advertising is acceptable from bodies--

(ii) whose rites or other forms of collective observance are not normally
directly accessible to the general public".

Following a complaint to it, as to the acceptability of advertising on
television by and on behalf of the Church, the ITC entered into
communications with both applicants. It notified the first applicant that it
intended to find that there was insufficient direct access to its activities
to qualify it as a religious advertiser, and it told the second applicant
that it too was not entitled to advertise because it was an organisation
associated with the first applicant.

Submissions were made on behalf of the applicants to the effect that para
5(ii) of the Code did not apply since the services and activities of the
Church were normally directly accessible to the general public.

On 3 November 1994, the ITC rejected those submissions. The letter included
the following:

"Turning specifically to the Church's letter of 26th April, after careful
further consideration of the material in that letter, we are not persuaded
that the meetings or the services of the Church, taken as a whole, are
generally freely accessible to the public cost-free, and sufficiently well
publicised in the sense intended and required by rule 5(ii) of Appendix 5".

On 21 February 1995 the ITC prohibited advertisement on various channels by
the second applicant for one of its best selling books. On 17 March 1995
Sedley J gave leave to the applicants to apply for judicial review of these
two decisions.

The grounds relied upon were that the Code contravened the statutory scheme
and was vague and unreasonable, the decisions were irrational, the ITC had
referred to an inappropriate provision, the decisions contravened EC Law,
(this ground was used as a basis for a claim in damages), the decisions
contravened art 10 of the European Convention on Human Rights and that no
adequate reasons had been given.

Re-amended grounds for which leave has not yet been given sought to add two
further grounds, namely, that the decisions breached the rules of natural
justice and that the ITC had failed to take reasonable steps to inform
itself.

On 7 December 1995 there was served, on behalf of the applicants, some
additional evidence which included a detailed report by a Dr Wilson. Dr
Wilson, is a distinguished academic who has conducted research into minority
religious movements, including, in particular, the Church of Scientology. In
his report he said that scientology was a religion and that the public was
not denied access to the services, rites, meetings or courses of the Church.
He concluded that the rites and other forms of collective observance were
directly accessible to the public.

On 23 April 1996 the solicitors acting for the ITC wrote to the applicants'
solicitors a letter which included the following:

"Following service on our client of the new evidence shortly before the
hearing of the application, which was subsequently adjourned, the ITC has
(consistent with its duties as a public body) given full consideration to
the new evidence, in particular the expert evidence of Dr Wilson.

The Commission met on Thursday 18th April 1996. At the meeting a decision
concerning your clients' suitability as potential advertisers on television
was made, in the light of the new evidence. After a full and thorough
consideration of all the evidence now available to it the Commission decided
that the Church and New Era satisfy the requirement of rule 5(ii) of the
Code of Advertising Standards and Practice (the "Code") and, as such, are
suitable as potential advertisers on television, subject to their satisfying
the requirements of the Broadcasting Act 1990 and the original provisions of
the Code.

As to the pending application, your client will have to decide what it
wishes to do in light of the Commission's decision. We see little point in
wasting further time and costs in that application now proceeding in the
changed circumstances. In view of the fact that the application is listed to
be heard on 22nd May 1996, and to avoid wasting further costs, we look
forward to receiving within 7 days your confirmation that your clients'
application will be withdrawn".

That is a brief outline of the background to today's proceedings. In the
result the application for judicial review of the two decisions, which the
applicants seek to impugn has become academic since the applicants are not
interested in pursuing their claim for damages.

The question of costs, however, is very far from academic. Mr Beloff submits
that the applicants have achieved not only a reconsideration of the impugned
decisions by the ITC, but a reversal of those decisions, that there is a
causal link between the proceedings for judicial review and the reversal of
the decisions, so that it is just that the applicants should recover their
costs of those proceedings, as the applicants have secured the outcome which
the proceedings were intended to produce.

He further submits that judicial review proceedings may become otiose in at
least three categories of case. These are:

(1) where the respondent, recognising the high likelihood of the applicant's
challenge succeeding, pre-empts his likely failure in the proceedings by
doing that which the challenge is designed to achieve;

(2) where the respondent, without prejudice to his view that there is a
reasonable prospect that the challenge will fail, decides to reconsider or
even reverse the decision under challenge, for example, to avoid the costs
of uncertain and expensive litigation or because new material has come to
light and;

(3) where the respondent decides to reconsider or reverse the decision
because new circumstances external to the parties have arisen (see the
helpful discussion by Simon Brown J in R v Liverpool City Council ex parte
Newman (1993) COD 65, The Times 3 November 1992, repeated by the same judge
in R v Holderness Borough Council ex parte James Robert Developments Ltd
(1992) 66 P&CR 46, [1993] 1 PLR 108, at page 51 of the former report.

Mr Beloff submits that the present case falls within the first category. He
points out that the finding that underpinned the decisions under challenge
was that the activities of the Church were not normally directly accessible
to the general public and this was a finding of fact. The facts relating to
accessibility were the same in November 1994 and February 1995 as they were
in April 1996. All that had changed was the ITC's perception and assessment
of those facts. The ITC had, before the dates of the impugned decisions,
been supplied with material from the Church which, if accepted, established
that the activities of the Church were normally directly accessible to the
general public. Even if ITC did not have sufficient material before it at
the time of the impugned decisions and/or required verification of the
material supplied by the Church from an independent source, it failed to
take the reasonable steps that it should have taken to acquaint itself with
the necessary further information and/or failed to seek such verification
for itself. Mr Beloff relies in this regard on what was said by Lord Diplock
in Secretary of State for Education and Science v Tameside Metropolitan
Borough Council [1977] AC 1014, [1976] 3 All ER 665, at 1065A to B of the
former report.

Before I turn to the submissions of Lord Lester I should refer to paragraph
two of the second affidavit of Mr Willis, sworn on behalf of the ITC, which
explains the decision conveyed to the applicants' solicitors in the letter
of 23 April 1996. What he says is this:

"First, I should like to make quite clear that the ITC's decision conveyed
to the Applicants in the ITC's letter of 23rd April 1996 was reached on the
merits, and in the light of the new material put forward by the Applicants
in December 1995. The ITC took the view that it had a continuing
responsibility and that, in the light of newly submitted material going to
the merits of the question, the matter should be revisited. As to the
grounds for impugning the legality, fairness and rationality of the original
decision, the ITC's position was and remains that those grounds were and are
misconceived, including the new grounds for which leave to re-amend is
sought. Mr Hodkin is quite wrong when he asserts that the ITC 'was simply
forced to conclude their original decision was irrational'. The Respondent
does not accept that the original decision, on the then material, was
irrational. Nor was the reconsidered decision based on the view that it
might be so characterised by a Court".

Mr Beloff does not suggest that this is not an honest and accurate statement
of the ITC's perception at the time of the later decision.

Lord Lester submits that the question whether the activities of the Church
were or were not normally directly accessible to the general public was a
matter for the judgment of the ITC on the material before it, at the time of
taking the decisions. Leaving aside challenges to the Code itself and points
involving EC Law, the impugned decisions would be upset only on Wednesbury
(Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB
223, [1947] 2 All ER 680) grounds. Mr Beloff's approach, he submits,
assimilates an error on the merits to Wednesbury irrationality, and that
that is wrong in principle (see Tameside case [1977] AC 1014, 1074H per Lord
Russell and Harley Development Inc v Commissioners of Inland Revenue [1996]
STC 440, [1996] 1 WLR 727, at page 737G to H of the latter report per Lord
Jauncey).

Even if, which Lord Lester disputes to be the case, the impugned decisions
and the April 1995 decision had been reached on precisely the same material,
that would only indicate that one of them was wrong on the merits and not
that it was irrational. The assessment made by the ITC leading to the
decisions under challenge, was not irrational. A careful investigation was
undertaken by it. It is sufficient for me to refer to paras 7 to 20 of the
affidavit of Andrew Wilson sworn on 17 May 1995 without quoting from it.

The present case, submits Lord Lester, falls into the second of the three
categories referred to by Mr Beloff. The Wilson report was new material. It
is true that it was supportive of the applicants' previous representations,
but the crucial point was that it came from an authoritative independent
source. As for Mr Beloff's point that the ITC should have obtained its own
independent report before reaching the original decisions, Lord Lester
submits that there was no such duty. A decision-maker's duty to take
reasonable steps to acquaint itself of relevant information is no more than
an aspect of the duty to avoid Wednesbury unreasonableness, and involves
identifying matters so obviously relevant that if regard is not had to them
the resulting decision will be outwith the intention of the statute which
confers the power of decision. The facts of this case come nowhere near
giving rise to such an obligation on the part of the ITC.

Finally, Lord Lester submits that as a matter of principle the Court should
be slow to award applicants their costs simply because they achieve the
outcome that the proceedings were intended to achieve, since otherwise
decision-makers will be discouraged from reconsidering decisions if new
material is forthcoming which suggests that the original decision, although
lawful, may have been wrong on the merits.

Neither counsel invited me to determine the substantive issues that were in
play in the judicial review proceedings as a step along the route to
deciding the question of costs. It is clear that I have the jurisdiction to
determine those issues for the purpose of deciding costs (see ex parte James
Robert Developments Limited), although, in my judgment, particularly in a
case of considerable complexity such as the present, the Court should be
very slow indeed to embark on such an exercise. Having regard to the way in
which the application has been argued, it is unnecessary to determine the
substantive issues and with a sigh of relief I decline to do so.

In my judgment, Mr Beloff's approach is somewhat simplistic. I accept his
three categories of case. The existence of different categories of case
shows that the mere fact that the applicants have achieved a good result in
the litigation is not, without more, necessarily a reason for awarding them
their costs. No doubt it is for that reason that Mr Beloff submits that this
is a category one case, ie. that the ITC has recognised the high likelihood
of the challenge succeeding. The difficulty with this submission is that the
evidence of Mr Willis shows that, subjectively, the ITC did not agree to
reverse the earlier decisions because it recognised a high likelihood or,
indeed, any likelihood, that the challenge would succeed.

Looking at the matter objectively, but without determining the issues
substantively, I am far from persuaded that the challenge to the decisions
on Wednesbury grounds would have succeeded. It might have done, but I am not
prepared to go further than that. I might well have decided that:

(1) on the material available to it at the time, it was reasonable in the
Wednesbury sense for the ITC to conclude as it did, and

(2) it was also reasonable in that sense to reach its decisions without
itself commissioning or requiring the applicants to commission an
independent report or seeking further information.

In my view, the mere fact that there has been a favourable reconsideration
of a decision on the merits in the course of judicial review proceedings
will rarely without more entitle an applicant to his costs. If the Court is
able, on the material before it, to conclude that the application for
judicial review would probably have been successful and that it was for that
reason that the respondent conceded the relief sought by agreeing to
reconsider or even reverse the decision, then on the face of it the
applicant may well be entitled to his costs.

It may be possible to determine that an application for judicial review
would or would probably not have been successful, by a cursory glance at the
material. Sometimes this will not be possible. The Court will, of course,
always be alive to the crucial distinction between an attack on the
lawfulness of a decision and a challenge to the merits of the decision. The
Court will also, no doubt, bear in mind the public interest in ensuring so
far as possible that decision-makers are not discouraged from reconsidering
decisions during the course of judicial review proceedings if circumstances
arise which justify their reconsideration.

It must never be forgotten, however, that the award of costs is a matter of
discretion for the Court, and it would be wrong to seek to lay down rigid
guidelines for the exercise of that discretion. In the present case I am in
no doubt that, largely for the reasons advanced by Lord Lester, the
applicants should not be awarded their costs of these judicial review
proceedings and that the right order is that there should be no order as to
costs. I will hear counsel on the question of the costs of today's hearing.

Judgment accordingly