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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Darroch & Anor v Football Association Premier League Ltd [2016] EWCA Civ 1220 (02 December 2016) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2016/1220.html Cite as: [2016] WLR(D) 658, [2017] LLR 290, [2016] EWCA Civ 1220, [2017] Lloyd's Rep FC 65, [2017] 4 WLR 6

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Mr Justice Foskett & Mrs Justice Carr
CO462811

		Royal Courts of Justice Strand, London, WC2A 2LL
		02/12/2016

Lord Justice Burnett:

1. The issue which arises in this appeal is whether the Divisional Court, having quashed the appellants' convictions in the Hull and Holderness Magistrates' Court for 22 offences contrary to section 297 of the Copyright, Designs and Patents Act 1988 ("the 1988 Act"), was wrong to refuse to order Football Association Premier League Limited ("the League") to pay their costs in the Magistrates' Court. The application was made for a civil costs order pursuant to section 51 of the Senior Courts Act 1981 ("the 1981 Act") against the League as a non-party to the criminal proceedings rather than a criminal costs order pursuant to the Prosecution of Offences Act 1985 ("the 1985 Act"). The appellants relied upon the decision of the High Court in Murphy v Media Protection Services Ltd (No 2) [2012] EWHC 529 (Admin); [2013] 3 CMLR 46 for the proposition that in complex criminal proceedings coming before the High Court there is power pursuant to section 51 of the 1981 Act to make a civil costs order in respect of the underlying criminal proceedings in the Magistrates' Court (or Crown Court).
2. The approach identified by Stanley Burnton LJ in the Murphy case was followed by the Divisional Court (Foskett J and Carr J) but the application for non-party costs pursuant to section 51 of the 1981 Act was nevertheless refused on the basis that the circumstances of the case did not meet the threshold of exceptionality set in Murphy.
3. A prior question arises. Does the Court of Appeal lack jurisdiction to hear this appeal because it is a criminal cause or matter? Appeals from the High Court in criminal causes or matter lie not to the Court of Appeal but to the Supreme Court.

The Facts

4. The appellants are publicans based in Kingston upon Hull. On 16 February 2011, following a two day trial, they were convicted of 22 offences contrary to section 297 of the 1988 Act of dishonestly receiving a programme with intent to avoid payment. The offences arose from the streaming of Barclays Premier League football matches into their pubs where they were watched by customers. Such matches were available for viewing in the United Kingdom on subscription or pay to view services from BSkyB. BSkyB paid the League for the rights to broadcast. The streaming service was provided by another cheaper supplier from outside the United Kingdom. The appellants were fined a total of £66,000 and ordered to pay prosecution costs assessed at £25,000. The appellants had advanced defences in part based upon EU law which the District Judge rejected.
5. The appellants had been arrested in February 2010 following police raids on the pubs they ran. No action was taken by the police. The reality in such cases is that neither the police nor the Crown Prosecution Service investigates or prosecutes for alleged breaches of section 297 of the 1988 Act for lack of resources. Prosecutions were brought privately by Media Protection Services Limited ("Media Protection") which was remunerated under a contract with the League. Media Protection instructed solicitors and counsel to prosecute the cases. As was recognised in Media Protection Services Limited v Crawford [2012] EWHC 2373 (Admin), [2013] 1 WLR 1068 at paragraph 44, Media Protection was independent of the League and carried out its own commercial activity.
6. The appellants appealed by way of case stated to the High Court relying upon EU law. In those proceedings Media Protection was the respondent because it was the prosecutor. The Divisional Court had considered a number of EU law points arising out of section 297 of the 1988 Act in the course of the litigation in which the judgment on costs in the Murphy case formed part. Before the appeal by case stated could be heard, a series of questions on EU law had been referred to the Luxembourg court in that litigation. In those circumstances, the hearing of the appeal was delayed until after the Luxembourg judgment was available. The Grand Chamber delivered its judgment on 24 February 2012. In October 2011, a prosecution under section 297 of the 1988 Act was brought against Mr and Mrs Crawford in Chester Magistrates' Court. It was argued that the proceedings were a nullity because the informations had been laid by an employee of Media Protection who was not authorised to do so under the Legal Services Act 2007. The District Judge accepted that argument. His conclusion was upheld by the Divisional Court in the Crawford judgment to which I have referred.
7. The appeal by way of case stated in the matter before us came on for hearing before Treacy LJ and Nicol J on 20 May 2014. In the meantime Media Protection had gone into liquidation, no doubt as a fall out from the finding in the Crawford case. The individual who laid the 22 informations against the appellants was the same as had laid the informations against Mr and Mrs Crawford. Despite the parties' continuing interest in the EU points and the impact of the judgment of the Luxembourg Court, it was clear to all that the underlying proceedings in the Magistrates' Court were defective and the convictions could not stand. The defect in the laying of the informations formed no part of the case stated. Therefore the court treated the proceedings as an application for judicial review of the convictions, waived all formalities and quashed the convictions with a direction that the Magistrates' Court should enter not guilty decisions on all 22 informations. In that way the fine and costs orders made in the Magistrates' Court fell away. The question of costs of the High Court proceedings was dealt with as follows:

"1. There shall be no order for the costs of the appeal or any application for Judicial Review made herein.

2. So far as the costs of proceedings below are concerned, the Claimants shall have 21 days from today to file and serve written submissions.

3 If the Claimant seeks an order that anyone other than the Magistrates' Court or the said Mr Hoskin or the interested party be required to pay all or any part of those costs, they shall issue and serve an application notice within the same period."

8. Mr Hoskin was the employee of Media Protection who had laid the informations; and the interested party referred to in the order was Media Protection. The appellants had no intention of applying for their costs against the Magistrates' Court, the technical defendant in the judicial review proceedings, or against Mr Hoskin. There was no point in doing so against Media Protection. There was no prospect of recovery even if an application were successful. In any event, the prosecution is not routinely liable to pay the costs of a successful defendant in the Crown Court or Magistrates' Court. The appellants did not ask the Divisional Court to make a defendant's costs order under section 16 of the 1985 Act. This was a case in which the informations were laid before the substantial changes (and restrictions) were made in the availability of meaningful costs orders from central funds under the 1985 Act by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. It was the intention of the appellants to seek from the High Court a civil order for costs against the League of the Magistrates' Court proceedings relying upon the approach of Stanley Burnton LJ in the Murphy case. Such an application would require an extension of the jurisdiction identified in that case. There, the court made a civil costs order against the prosecutor, Media Protection, and was not concerned with a third party costs order.
9. The application against the League followed. The judgment of the court, prepared by Carr J, was handed down on 15 December 2014.

The Jurisdiction of the Court of Appeal

10. Section 18(1) of the 1981 Act provides:

"No appeal shall lie to the Court of Appeal –

(a) except as provided by the Administration of Justice Act 1960, from any judgment of the High Court in any criminal cause or matter."

Section 151 defines "cause" as any action or any criminal proceedings and a "matter" as any proceedings in court not in a cause. By section 1 of the Administration of Justice Act 1960 the right of appeal is to the Supreme Court. None of the exceptions provided by that act is in play. Such an appeal may be brought in the Supreme Court only if the High Court certifies one or more points of law of general public importance and with the leave of the High Court or the Supreme Court.

11. The provision now found in section 18 of the 1981 Act first appeared in section 47 of the Judicature Act 1873. Although the word "judgment" is used it has been interpreted as applying to all orders made in a criminal cause or matter: see R v Steel (1876) 2 QBD 37 and Ex parte Alice Woodhall (1888) 20 QBD 832.
12. The question whether the Court of Appeal was the proper destination of an appeal from the refusal by the High Court to make the order for costs sought by the appellants was not raised in the respondent's notice, but being a question of jurisdiction, was raised by this court itself.
13. In helpful written submissions from the parties Mr Millett QC on behalf of the League observed that "to be frank, the significance of the jurisdictional point regarding the Court of Appeal was not appreciated by the parties, by the Divisional Court on the permission application, or the Court of Appeal on the permission application." The point having been raised, he submits that it is not arguable that this appeal is brought other than in a criminal cause or matter. Mr Roughton for the appellants readily accepted that the appeal by way of case stated was a criminal cause or matter. He disputed that the judicial review proceedings, which were necessary as a formality to quash the convictions, were other than civil proceedings. Furthermore, he submitted that they were not a criminal cause or matter. As a result, any disposal of the costs application was similarly not in a criminal cause or matter. In any event, the underlying criminal proceedings were concerned to vindicate the League's intellectual property rights. Alternatively, he submitted that costs applications are collateral to the main proceedings. Thus even if the proceedings constituted a criminal cause or matter, the determination of the question of costs is properly characterised as civil. Moreover, the enforcement of an order for costs is by way of civil recovery and not, as with a fine, by a term of imprisonment in default.
14. There is no doubt that the appeal against conviction by way of case stated was a criminal cause or matter. The fact that the appeal was converted into judicial review proceedings to enable the convictions to be quashed for a reason not encompassed within the case stated in my judgment could not deprive them of their colour for the purposes of section 18 of the 1981 Act. The proceedings themselves, although civil, were a criminal cause or matter for that purpose. There are many circumstances in which decisions in criminal cases or with respect to criminal investigations are challenged in judicial review proceedings but are treated as criminal causes or matters for the purposes of rights of appeal. Examples include Carr v Atkins [1987] QB 963; R (Aru) v Chief Constable of Merseyside Police [2004] EWCA Civ 199, [2004] 1 WLR 1697; and Panesar v Her Majesty's Revenue and Customs [2014] EWCA Civ 1613, [2015] 1 WLR 2577.
15. On occasion the boundaries of the definition of "criminal cause or matter" have been difficult to identify. They have been considered in a series of cases in the House of Lords, Court of Appeal and High Court. A comprehensive review of the relevant authorities was undertaken by Lord Neuberger of Abbotsbury MR in R (Guardian News and Media Ltd) v City of Westminster Magistrates' Court [2011] EWCA Civ 1188; [2011] 1 WLR 3253. A number of the authorities were difficult to reconcile. That case concerned an application by a newspaper to the Magistrates' Court for disclosure of documents which had been referred to in the course of extradition proceedings. The application was unsuccessful and was followed by an appeal to the High Court by way of case stated, with parallel judicial review proceedings. The Court of Appeal accepted jurisdiction in a subsequent appeal because the application for disclosure was wholly collateral to the extradition proceedings: see paragraphs 36 to 39 of Lord Neuberger's judgment. For that reason the application was not a criminal cause of matter. Similarly, in Government of the United States of America v Montgomery [2001] UKHL 3; [2001] 1 WLR 196 the House of Lords concluded that an order made in the High Court under Part VI of the Criminal Justice Act 1988 restraining assets in this jurisdiction, in aid of enforcement of a confiscation order obtained in the United States following a conviction for fraud, was not a criminal cause or matter. An appeal lay to the Court of Appeal from a decision of the High Court.
16. Mr Roughton argued that a costs order should be viewed in the same light. In paragraphs 18 and 19 of his speech Lord Hoffmann, with whom all other members of the Committee agreed, said:

"18. Most of the cases on the subject concern orders made with a view to a criminal prosecution, such as for extradition (R v Governor of Brixton Prison, Ex parte Levin [1997] AC 741) or the issue of a witness summons (Day v Grant (Note) [1987] QB 972 ) or the production of documents (Carr v Atkins [1987] QB 963) or else decisions of superior courts by way of appeal from or judicial review of orders in criminal proceedings. Apart from some problems caused by Lord Denning's "test" in R v Southampton Justices, Ex parte Green [1976] QB 11, 15, to which I have referred above, they have caused little difficulty. The present case, however, concerns the enforcement of an order made in criminal proceedings.

19. My Lords, it may be right, and possibly in most cases would be right, to regard orders made by way of enforcement of orders made or to be made in criminal proceedings as part and parcel of those proceedings. This was certainly the case in R v Steel 2 QBD 37."

17. Nonetheless, Lord Hoffmann continued by rejecting the submission that the nature of the proceedings in which the original order was made will necessarily determine whether the machinery of enforcement through the courts is a criminal cause or matter. There was no question but that the underlying confiscation order was a criminal cause or matter. The question was whether enforcement proceedings under the 1988 Act were similarly a criminal cause or matter. For reasons set out in the paragraphs 20 to 23 of his speech Lord Hoffmann concluded that the enforcement proceedings were essentially civil in character. He considered it significant that the powers were conferred upon the High Court rather than the Crown Court or Magistrates' Court. The powers either mirrored or were expressed by reference to the civil jurisdiction for recovery of debt and determination of proprietary disputes. Furthermore, the enforcement mechanisms might give rise to proprietary disputes with third parties.
18. In my view the circumstances of the Montgomery case provide no parallels with the making of a costs order in proceedings properly characterised as a criminal cause or matter for the purposes of section 18 of the 1981 Act. The determination of an application for costs by either party at the end of an appeal by way of case stated or a claim for judicial review is an inherent part of the exercise of the jurisdiction. There would be a startling consequence if the appellants' submission were correct. Many appeals by way of case stated or claims for judicial review which are criminal causes or matters result not only in an order determining the substance of the matter but also an order in relation to costs. There could not sensibly be different appeal routes for those two aspects of the same order of the High Court.
19. In observing that ordinarily the enforcement of an order obtained in criminal proceedings would be considered part and parcel of those proceedings, and thus a criminal cause or matter, Lord Hoffman referred to the case of Steel. That was a costs case. A private prosecution for criminal libel resulted in a judgment for the defendants with costs against the prosecutor. Those costs were taxed (subject to a detailed assessment in today's language) by the Master of the Crown Office. The defendants appealed to the High Court against the order made on taxation but were unsuccessful. They appealed to the Court of Appeal. The court concluded by reference to section 47 of the Judicature Act 1873 that it lacked jurisdiction because the judgment in the High Court was in a criminal cause or matter. An appeal in relation to taxation arising out of the costs order was a criminal cause or matter.
20. If a matter relating to the taxation and thus enforcement of a costs order was to be treated as a criminal cause or matter, then the underlying costs order must necessarily be so also.
21. The cases of Steel and Montgomery are authority for the proposition that the order determining an application for costs and made in proceedings which are themselves a criminal cause of matter may not be appealed to the Court of Appeal because that order is, for the purposes of section 18(1) of the 1981 Act, a judgment of the High Court in a criminal cause or matter. As I observed in the Panesar case:

"I acknowledge that the authorities on the meaning of "criminal cause or matter" have given rise to some uncertainty and, as Lord Neuberger recognised in the Guardian case, some incoherence. It does not follow from the proposition that in some cases it is difficult to determine whether given proceedings are a "criminal cause or matter" that the same difficulty arises in all cases."

22. It is clear that the order made on the application for costs in this case was a criminal cause or matter as were the judicial review proceedings in which it was made. The Court of Appeal has no jurisdiction to entertain this appeal and in my judgment it falls to be dismissed.

The Underlying Substance of the Appeal

23. Mr Millett QC submits that the High Court had no power to make the order sought by the appellants. Given my conclusion on the first issue, what follows is obiter. Nonetheless, the issue has practical importance which leads me to explain my views on the question.
24. Stanley Burnton LJ recorded the material submissions in the Murphy case at paragraphs 7 and 8 of his judgment, with which Barling J agreed:

"7. It is common ground that this Court has power to order costs here and below pursuant to sections 28A and 51 of the Senior Courts Act 1981. We have referred to the power under, in particular, section 51 as the civil regime. Section 28A confers power on this Court, on an appeal by way of case stated by the magistrates' court or the Crown Court to "make such … order in relation to the matter (including as to costs) as it thinks fit". Section 51(1) provides that subject to the provisions of the 1981 Act or any other enactment or to rules of court, the costs of and incidental to all proceedings in (among others) the High Court shall be in the discretion of the court. Subsection (5) provides that nothing in subsection (1) shall alter the practice in any criminal cause or matter.

8. It was not suggested by Mr Mellor QC, for the respondent, that there is any provision of the 1981 Act, or any other enactment or rule of court, or practice in criminal causes or matters, that constrains the exercise of the power or the discretion of the Court under section 51. However, he submitted that this being a criminal cause or matter, the appropriate jurisdiction for the Court to exercise is that under to section 19 of the Prosecution of Offences Act 1985 and Regulation 3 of the Costs in Criminal Cases General Regulations 1986 and/or pursuant to section 16 of the Prosecution of Offences Act 1985. We have referred to this jurisdiction as the criminal costs regime."

25. Having accepted that there was a power to make the order sought, the Lord Justice formulated a test of exceptionality which governed its exercise. I have come to the conclusion, in respectful disagreement with Stanley Burnton LJ, that the Divisional Court has no power under section 51 of the 1981 Act to make the order for which the appellants contended in that case in respect of the costs below.
26. In my judgment section 51 of the 1981 Act does not empower the High Court, on an appeal by way of case stated, or a claim for judicial review that seeks to quash convictions, to make a civil costs order in respect of costs incurred in the underlying criminal proceedings in the Crown Court or Magistrates' Court. As is apparent from the quotation above, the conclusion which confirmed the power of the High Court proceeded on a concession relating to section 51. In my view that concession was wrongly made. Section 51 provides:

"Costs in civil division of Court of Appeal, High Court and county courts.

(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in—

(a) the civil division of the Court of Appeal;

(b) the High Court; and

(c) any county court,

shall be in the discretion of the court.

(2) Without prejudice to any general power to make rules of court, such rules may make provision for regulating matters relating to the costs of those proceedings including, in particular, prescribing scales of costs to be paid to legal or other representatives or for securing that the amount awarded to a party in respect of the costs to be paid by him to such representatives is not limited to what would have been payable by him to them if he had not been awarded costs.

(3) The court shall have full power to determine by whom and to what extent the costs are to be paid.

(4) In subsections (1) and (2) "proceedings" includes the administration of estates and trusts.

(5) Nothing in subsection (1) shall alter the practice in any criminal cause, or in bankruptcy. …"

27. The first question is whether costs incurred in the lower court from which an appeal is brought are "costs of and incidental to" the proceedings in the High Court for the purposes of subsection (1). Section 51 limits the power to award costs to those "of and incidental to" the proceedings in the Court of Appeal, High Court or County Court, as the case may be. It could not be suggested that the costs incurred by the appellants in the Magistrates' Court are costs of the proceedings in the High Court. It follows that unless they are costs incidental to those proceedings no question of their recoverability under section 51 can arise. In my opinion they are not costs incidental to the proceedings in the High Court.
28. The general approach to the meaning of that term is found in Re Gibson's Settlement Trusts, Mellors v Gibson [1981] Ch 179 but none of the features identified by Sir Robert Megarry VC in that case is relevant in this appeal. In Wright v Bennett [1948] 1 KB 601, on considering an earlier version of the same provision, the Court of Appeal held that "one has to treat proceedings below as a separate proceeding … from the proceedings here": per Somervell LJ at 606.
29. It follows that the term "of and incidental to" is not apt to include the costs of the proceedings from which an appeal is brought. Appeal courts have power to make orders in respect of the costs in underlying proceedings because it is expressly conferred by legislation or by the rules. By virtue of section 15(3) of the 1981 Act the Court of Appeal is conferred with all the jurisdiction of the court or tribunal from which an appeal is brought. Section 28A of the 1981 Act has similar effect for the High Court hearing appeals by way of case stated. CPR Part 52.10 confers like power on any civil court exercising an appellate jurisdiction (including the High Court on an appeal by way of case stated). Thus when an appeal court makes an order in respect of the costs incurred in the underlying proceedings it is not using power conferred by section 51 but express power conferred elsewhere.

Appeals by way of case stated

30. In an appeal by way of case stated the power to award costs is found in section 28A of the 1981. As material, that provides:

"Proceedings on case stated by magistrates' court or Crown Court.

(1) This section applies where a case is stated for the opinion of the High Court—

(a) by a magistrates' court under section 111 of the Magistrates' Courts Act 1980; or

(b) by the Crown Court under section 28(1) of this Act.

(2) The High Court may, if it thinks fit, cause the case to be sent back for amendment and, where it does so, the case shall be amended accordingly.

(3) The High Court shall hear and determine the question arising on the case (or the case as amended) and shall—

(a) reverse, affirm or amend the determination in respect of which the case has been stated; or

(b) remit the matter to the magistrates' court, or the Crown Court, with the opinion of the High Court,

and may make such other order in relation to the matter (including as to costs) as it thinks fit.

(4) Except as provided by the Administration of Justice Act 1960 (right of appeal to Supreme Court in criminal cases), a decision of the High Court under this section is final."

31. This is the latest iteration of the powers of the High Court on an appeal by way of case stated, which derives from sections 6 and 7 of the Summary Jurisdiction Act 1857 ("the 1857 Act"). As Stanley Burnton LJ indicated, on an appeal by way of case stated, this provision empowers the High Court to make orders in respect of the proceedings in the Magistrates' Court or Crown Court (as the case may be) in accordance with the criminal costs regime. By virtue of sections 16(6) and 21(1) of the 1985 Act when a court makes a defendant's costs order under section 16(5) of the 1985 Act, it automatically includes the costs of the proceedings below, unless express contrary provision is made. Costs in the court below against the prosecution, a legal representative or a third party, are governed by sections 19, 19A and 19B respectively of the 1985 Act. They can be made applying the same approach as those provisions dictate.
32. Even if the power were not conferred by section 28A of the 1981 Act the same result would be achieved by the application of CPR 52.10.

Judicial Review proceedings

33. The power to award costs in judicial review proceedings is found in section 51 of the 1981 Act. That power is circumscribed by both subsection (1) (subject to other statutory provisions) and subsection (5) (not to alter any practice in any criminal cause). Even if I am wrong in my earlier conclusion that section 51 of the 1981 Act is not concerned with the costs of proceedings from which an appeal is brought to the High Court, the terms of sections 51(1) and (5) provide a further negation of the power which the appellants asked the Divisional Court to exercise in this case. That is because the statutory provisions contained in the 1985 Act govern the circumstances in which an award of costs can be made in criminal proceedings against a non-party. Mr Roughton candidly accepted that the order for costs of the Magistrates' Court proceedings he sought against the League in the Divisional Court could not have been made by the District Judge himself. Section 19B of the 1985 Act, and the regulations made under the 1985 Act, enable such an order to be made if the court is satisfied that the non-party has been guilty of serious misconduct. There is no suggestion of any misconduct on the part of the League, still less serious misconduct. Similarly, the order of costs made in Mrs Murphy's favour in the underlying proceedings against the prosecutor could not have been made in the underlying proceedings. Such an application in the Magistrates' Court (or Crown Court) would be governed by section 19 of the 1985 Act.
34. The judicial review proceedings, whilst technically civil proceedings, are nonetheless a criminal cause or matter. One result is that a defendant's costs order may be made under section 16(5) of the 1985 Act, albeit, as I have already indicated, such orders have much reduced financial value since the legislative changes introduced in 2012. Where an application is made to quash a conviction together with the associated order for costs made in the underlying proceedings, the High Court might deal with the costs of the underlying proceedings pursuant to powers contained in sections 31(5) and (5A) of the 1981 Act. These provisions would allow the High Court, having quashed the order made, to substitute its own decision on costs in the underlying proceedings if there was only one decision which the Magistrates' Court could have made. It is undecided whether section 43(3) of the 1981 Act provides a wider power, in connection with judicial review of criminal proceedings, to substitute any order for costs which might have been made by the underlying court.

Conclusion

35. The Divisional Court in this case approached the question of civil third party costs against the League by applying the exceptionality test articulated in the Murphy case. In my opinion there is no jurisdiction under section 51 of the 1981 Act to make the order sought. That is so whether the challenge to the convictions is brought by the usual route of appeal by way of case stated or by a claim for judicial review.
36. I would dismiss the appeal.

Lady Justice Hallett

37. I agree.

Sir Brian Leveson, P

38. I also agree. Having determined that this court had no jurisdiction to hear this appeal, it might be thought to be inappropriate to enter into an analysis of its merits. In Murphy v Media Protection Services Ltd (No 2) [2012] EWHC 529 (Admin); [2013] 3 CMLR 46, however, the Divisional Court proceeded by way of concession as to jurisdiction and therefore dealt with the substantive argument, spelling out a test of exceptionality. In the circumstances, I entirely agree with Burnett LJ that it was sensible to analyse the decision in greater detail and I endorse his conclusions about it.