Case No: QBCOF 1998/1406/4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE LAWS
Royal Courts of Justice
Strand
London WC2

Date: Friday 23rd July 1999

B e f o r e:

LORD JUSTICE SIMON BROWN

LORD JUSTICE CHADWICK

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MR JUSTICE RATTEE

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LlGHTFOOT

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THE LORD CHANCELLOR

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(Handed Down Transcript of Smith Bernal Reporting Limited,
180 Fleet Street, London EC4A 2HD
Tel: 0171 831 3183
Official Shorthand Writers to the Court)
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MR R ALLEN QC and MR A WHITE (Instructed by the Solicitor, the Public Law Project) appeared on behalf of the Appellant.

MR P SALES (Instructed by the Treasury Solicitor) appeared on behalf of the Respondent.

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J U D G M E N T

Lord Justice Simon Brown:

1.	Some 20,000 bankruptcy orders are made each year.   Over half are made on petitions presented by the debtors themselves, people unable to pay their debts.   The benefits of such orders are plain.   Their immediate effect is to release the debtor from importunate creditors, from the bailiffs’ knock on the door.   In the longer term (after three years) the bankrupt will generally be discharged, released from all his debts.   Such petitions can only be presented, however, on payment of a deposit (since 1994, £250) as security against the fees which the official receiver will incur, once the order is made, in examining the debtor’s affairs and administering his assets.   No one, however indigent, is exempt;  there are no circumstances in which the deposit may be remitted.
2.	The appellant, Mrs Lightfoot, is unable to pay this deposit.   She has debts of nearly £60,000 and no significant assets.    She simply cannot raise the money.   Nor is she alone in this predicament.   Rather it appears that large numbers of debtors are similarly placed.   It is, indeed, apparently for this reason that the great majority of those wishing to petition for bankruptcy do not in fact do so.   To them, therefore, is denied what Lord Jauncey in Re Smith (A Bankrupt) [1990] 2 AC 215 at 237 called “the importance of the rehabilitation of the individual insolvent.”   They face instead a lifetime of unrelieved indebtednes.
3.	These circumstances, submits Mr Allen QC, bring the case within the principle established by the Divisional Court in R v Lord Chancellor ex parte Witham [1998] QB 575:  the principle that access to the courts is a constitutional right at common law which can only be abrogated by a specific statutory provision in primary legislation or by subordinate legislation whose vires  in primary legislation specifically confers the power to abrogate.   The primary legislation here, submits Mr Allen, is no more apt than it was in Witham to confer upon the Lord Chancellor the power to deprive the poor of their constitutional rights.   Nor, he submits, is the appellant’s right to present her own petition in bankruptcy any less a constitutional right than was Mr Witham’s right to bring proceedings for malicious falsehood and libel.   Indeed, he argues, it is the same right, the right of access to the court.   The particular purpose of such access, he submits, is immaterial as is the distinction between the court fees which constituted the obstacle in Witham and the official receiver’s fees which constitute the obstacle here.
4.	It was this second limb of the argument (the appellant’s contention that she is being denied a constitutional right) which failed below and it is convenient at once to set out the determinative passages in Laws J’s judgment of 31st July 1998 (now reported at [1999] 2 WLR 1126 and [1998] 4 AER 764):
"Access to justice is a fundamental requirement of the rule of law.   Its imperative rests upon the need for objective and independent adjudication of disputes between man and man, and between man and state.   This was the sense in which the phrase was used in ex p Witham, as was the expression ‘access to the Queen’s courts’;  no distinction was intended, as I hope the context of those expressions’ use makes clear.   The subordinate order complained of in ex p Witham offended against this imperative.   It constituted a general prohibition of indigent litigants from the door of the court, whatever their dispute.   But it by no means follows that every case where access to court procedures is envisaged by statute gives rise to a constitutional right.”   (page 773 (b) - (d)).

"In my judgment the 1986 order, and specifically the articles complained of, infringe no constitutional right.    The provisions in question belong to a self-standing statutory scheme designed both for the fair treatment of creditors and for the relief of debtors.   If the scheme (or its predecessors) had never been enacted, the rule of law would not itself in the least be affronted.   It is not concerned with the adjudication of general disputes.   Its premise is that the debts are already owed.   It constitutes a benign administrative system to make fair and practical sense of the case where the debtor, by his own fault or not, cannot pay his undisputed creditors.   This is illustrated not only by the procedures undertaken when a bankruptcy order is made, but also by the provisions contained in ss.252, 273, 274 and 275, ... .   And the plain fact is that Parliament has provided the statutory bankruptcy scheme on terms that a petitioner, by paying a deposit which may well not be refunded (though in some circumstances it may:  art 11 of the 1986 order), should contribute to the cost of its administration.   It is a system which by the measures enacted happens to be under control of the court.   But it is perfectly possible in theory to envisage a system, designed for the same ends, which would be run by administrators under a government department;  though in that case, no doubt final decisions taken under the scheme would be subject to the judicial review jurisdiction if no other judicial remedy were provided.   But such a scheme could not, I think, be objected to on the grounds that a candidate for its benefits was required to pay a fee or lodge security before being allowed to invoke it.”  (page 774 (c) - (g))."

5.	The appellant must needs challenge that conclusion and does so, as indicated,  by contesting the suggested relevance of the difference between court fees and the costs of administering the bankruptcy order, and the suggested distinction between the court’s general function in adjudicating disputes and its function here in controlling personal bankruptcies.   The respondent for his part supports Laws J’s judgment on this issue but contests his rejection of an alternative basis for upholding the vires of the deposit requirement, namely by reference to the bankruptcy scheme’s legislative history.   This history, submits Mr Philip Sales, demonstrates that when Parliament enacted the 1986 Act - brought into effect on the same date as the 1986 Order and the 1986 Rules (as well as a raft of other supporting legislation) to form a complete code of insolvency law - it did so knowing full well that the deposit requirement had applied without exception to every petitioner for bankruptcy for over a century, and clearly intending that there would be power in the Lord Chancellor to continue this requirement under the new code.

6.	Laws J regarded the legislative history as supporting his view “that the bankruptcy system is a self-standing administrative scheme different in kind from the constitutional right described in ex p Witham” (page 775 (b)-(c)), and that it constitutes “a piece of benign - and, certainly, very important - self-standing machinery;  it is not about access to justice” (page 778 (a)-(b)).   But he rejected Mr Sales’ argument that it demonstrated “a clear and specific intention by parliament to provide for the payment of security as a pre-condition of the issue of a bankruptcy petition:  sufficiently specific to override the indigent petitioner’s constitutional right of access to the court if (contrary to his primary contention, which I have upheld) such a right is in truth engaged.”  (page 776 (d)-(e)).   Essentially he rejected the argument because “the premise of the regulation’s use as an aid to construction must be that there is some ambiguity or lack of clarity in the main Act;  and ... such a circumstance would rule out the possibility that it might authorise interference with constitutional rights.”  (page 777 (j)).

7.	These then are the main battle lines of the debate.   They do not, however, exhaust the argument.   Mr Allen further contends that the deposit requirement constitutes a violation of the appellant’s rights under Article 6(1) of the ECHR to a fair hearing in the determination of her civil rights and obligations, and under Article 14 in that she is discriminated against in her enjoyment of the Article 6(1) right on the ground of (her lack of) property.   This contention was pleaded but not argued below.   Roch LJ, however, expressly adverted to it when granting leave to appeal and it has been developed before us without objection.   Mr Sales disputes that the Convention is breached by this requirement but in any event submits that the Convention cannot presently be invoked save only to resolve an ambiguity in the legislation (see R v Secretary of State for the Home Department, ex parte Brind [1991] 1 AC 696) and, assuming such ambiguity to exist, he argues that it would be altogether more appropriate to determine Parliament’s true intention by reference to the long and consistent legislative history of these provisions than by looking to a Convention only half as old.

8.	Essentially, therefore, three issues fall for consideration:
1.	What is the nature of a debtor’s right to petition the court for his own bankruptcy?  In particular is it a constitutional right of the kind identified in Witham?
2.	If so, does the legislation permit its abrogation by the imposition of an unremittable deposit requirement?
3.	Are Articles 6 and/or 14 of the Convention breached and, if so, does this conclusion affect the outcome of issues 1 or 2?

9.	Before addressing these issues it is convenient first to sketch in the relevant legislation.   Its history I shall refer to in a little detail.   So far as the present position is concerned, however, I shall set out only the most directly relevant provisions, leaving any interested reader to the fuller description of the scheme contained in the judgment below.

Legislative History
10.	The role of the official receiver in supervising bankruptcies dates back to the Bankruptcy Act 1883.   S.127(1) of that Act empowered the Lord Chancellor, with the concurrence of the President of the Board of Trade, to “make, revoke and alter general rules for carrying into effect the objects” of the Act, s.127(2) providing that all general rules made under the section “shall have effect as if enacted by this Act”.   S.128 empowered the Lord Chancellor, with the sanction of the Treasury, to prescribe a scale of fees to be charged in respect of proceedings under the Act.   Rule 128 of the Bankruptcy Rules, made pursuant to s.127, provided that:
"(1)	Upon the presentation of a petition either by the debtor or by a creditor the petitioner shall deposit with the official receiver the sum of £5, and such further sum (if any) as the court may from time to time direct, to cover the fees and expenses to be incurred by the official receiver.

(2)	The official receiver shall account for the money so deposited to the creditor, or, as the case may be, to the debtor’s estate ..."

11.	Both the 1883 Act and the 1883 Rules came into effect on the same day.

12.	The 1883 Rules were revoked and replaced by the 1886 Rules, also made under s.127 of the 1883 Act.   Rule 147 of the 1886 Rules re-enacted the requirement for a deposit and for the first time provided that no petition should be received unless the receipt of the official receiver for the deposit payable on the presentation of the petition was produced to the proper officer of the court.

13.	The various Bankruptcy Acts were consolidated in the Bankruptcy Act 1914, s.168(3) whereof provided:
"Until revoked or altered under the powers of this Act, any fees prescribed and any general rules and orders made under the Bankruptcy Acts 1883 to 1913 ... which are in force at the commencement of this Act, shall continue in force, and shall have effect as if made under this Act."

14.	The 1914 Act contained rule-making powers in general terms similar to those under the 1883 Act, s.132(1) empowering the Lord Chancellor, with the concurrence of the President of the Board of Trade, to make general rules for carrying into effect the objects of the Act, and s.132(2) providing that all such rules “shall have effect as if enacted by this Act.”   S.133 re-enacted the power contained originally in s.128 of the 1883 Act, empowering the Lord Chancellor, with the sanction of the Treasury, to prescribe a scale of fees to be charged in respect of proceedings under the Act.   The Bankruptcy Rules 1915, made under s.132, replaced those made under the 1883 Act and came into operation on the same day as the 1914 Act.   Rule 149(1) again provided that a petition could not be received by the court until a deposit to cover the fees and expenses to be incurred by the official receiver had been deposited with him.

15.	New Bankruptcy Rules were made in 1926, 1952 and 1976, in each case under s.132 of the 1914 Act.   The 1926 Rules for the first time required different deposits to be paid respectively by debtor petitioners and creditor petitioners.   The 1976 Rules increased those deposits respectively to £50 and £90.   

The Present Legislation
The Insolvency Act 1986
16.	S.264(1)(b) enables an individual debtor to present his own petition in bankruptcy.	 S.264(2) read with s.272(1) enables the court then to make a Bankruptcy Order if it is satisfied that the debtor is unable to pay his debts.   Where an order is made, the bankruptcy continues until the individual is discharged (s.278), generally after three years (s.279(2)(b)), the effect of discharge being that subject to certain qualifications the bankrupt is released from all his bankruptcy debts (s.281).   Once the bankruptcy takes effect, it is the official receiver’s duty to protect the estate and investigate the bankrupt’s conduct and affairs.   This he does under the court’s general control (s.363(1)).

17.	I come next to the relevant enabling sections and the rules and orders respectively made (whether intra vires or ultra vires is, of course, in dispute) pursuant to them:
S.412  provides:
"(1)	The Lord Chancellor may, with the concurrence of the Secretary of State, make rules for the purpose of giving effect to Parts VIII to XI of this Act.

(2)	Without prejudice to the generality of subsection (1), ... rules under this section may contain - (a) any such provision as ... corresponds to provision contained immediately before the appointed day in rules made under s.132 of the Bankruptcy Act 1914 ..."

Rule 6.42(1) of the Insolvency Rules 1986, made under s.412, provides:
"No [bankruptcy] petition shall be filed unless there is produced with it the receipt for the deposit payable on presentation."

S.415 provides:
"(1)	There shall be paid in respect of - (a) proceedings under Parts VIII to XI of this Act, and (b) the performance by the official receiver or the Secretary of State of functions under those Parts, such fees as the Lord Chancellor may with the sanction of the Treasury by order direct.   

(2)	… 

(3)	The Lord Chancellor may, with the sanction of the Treasury, by order provide for sums to be deposited, by such persons, in such manner and in such circumstances as may be specified in the order, by way of security for - (a) fees payable by virtue of this section ..."

18.	The Insolvency Fees Order 1986 was made by the Lord Chancellor under s.415(3).   I shall set out only the most material parts of Articles 8 and 9:
"8(1)	Before a ... bankruptcy petition can be presented the appropriate deposit (as specified in Article 9 below) must be paid to the court in which the petition is to be presented.   

(2)	That deposit is security - (a) for Fee No. 1 listed in Part 1 of the Schedule to this Order or Fee No. 2 listed in Part II of that Schedule as the case may be (each such fee being referred to in this order as “the administration fee”), or (b) where an insolvency practitioner is appointed under s.273 [in stipulated circumstances where, even though the debtor is unable to pay his debts, rather than make a bankruptcy order the court appoints an insolvency practitioner to prepare a report under s.274 as to the possibilities of a voluntary arrangement], for the payment of his fee under Article 12 below.   

9.   The appropriate deposit referred to in Article 8 is ... (b) in relation to a bankruptcy petition to be presented under s.264(1)(b), £100 [amended in 1994 to £250] ... "

19.	Detailed provisions are then contained in the Order as to how the deposit is to be applied.   It is fair to say that it represents a comparatively small part of the fees ordinarily payable to the official receiver or insolvency practitioner out of the estate.

20.	Against that background let me now turn to the issues already identified.

21.	x1.	Is the debtor’s right to present his own petition in bankruptcy a constitutional right?   Another way of formulating this issue is to ask whether the constitutional right of access to the courts identified in Witham is breached by the deposit requirement.   Laws J held not, on the basis that whereas a democratic state must provide free access to courts so that general disputes may be adjudicated, it need not do so for the purpose of enabling a debtor to benefit from a bankruptcy scheme.   The debtor petitions not so that the extent of his liabilities may be determined but rather so that he may eventually be relieved of them.

22.	Mr Allen criticises this approach.   Witham, he argues, supports no distinction between the concepts of access to justice and access to the courts.   True, many references in Laws J’s judgment in Witham are to “the right of access to justice”.   But there are many references also to “access to the courts”.   He relies in particular upon a pithy sentence in Rose LJ’s brief judgment:
"There is nothing in the section or elsewhere to suggest that Parliament contemplated, still less conferred, a power for the Lord Chancellor to prescribe fees so as totally to preclude the poor from access to the courts.” (His emphasis).

23.	Parliament, submits Mr Allen, by section 264(1)(b) gave the individual debtor a right to petition and thereby a right to rehabilitation.   It is not for the Lord Chancellor to remove that right in the case of the truly indigent by imposing a precondition they cannot satisfy.   The rule of law is no less engaged by the invocation and administration of bankruptcy proceedings than in the vindication of claims and defences in general disputes between parties.   There need be no lis:   Parliament having thought it just and right to provide a procedure whereby debtors may apply for relief from their debts, that procedure is no less deserving of the right of access to the court than any other judicial process.

24.	Ably though the argument was developed, in my judgment it skirts the true distinctions to be made between this case and Witham.   There are two.  One is conveniently high-lighted by the Lord Chancellor’s action following Witham in allowing waiver of the court fees payable on a bankruptcy petition whilst leaving in place the mandatory requirement for a deposit against payment of the administration fee.    That deposit requirement, as the legislation makes plain, is to ensure that, to the extent of £250 at least, the public purse will be protected against the costs of providing the services of the official receiver or independent insolvency practitioner, services which are essential to the fair working of the rehabilitation scheme, guarding as they do the proper interests of the bankrupt’s creditors.   It is one thing to say that provided always that the debtor can contribute to these expenses to the stipulated extent, Parliament cannot be supposed to have intended that he should be denied access to the scheme by an inability to pay the court fee;  quite another to say that Parliament must be supposed to have intended the taxpayer to fund not merely the court’s own facilities but also those of the official receiver or insolvency practitioner in administering the bankruptcy.

25.	Unless only the appellant can say that every debtor  has a constitutional right to be rehabilitated irrespective of whether he or she can contribute to the administration fee, then the appeal must fail.   And in my judgment this cannot be said.   It is for Parliament to decide whether or not to provide any scheme whereby debtors are enabled to seek release from their debts.   And it is no less for Parliament to decide whether any scheme provided should or should not contain a mandatory requirement for the debtor to contribute to the administrative costs involved.   It can no more be presumed that Parliament must have intended this requirement to be waived in the case of the truly indigent than that all democracies must be expected to provide for debtors to be rehabilitated in the first place.

26.	Firstly, therefore, I would distinguish this case from Witham on the ground that the mandatory deposit is not for access to the court but rather towards the costs of  services being provided by others for the petitioner’s benefit.   No doubt the position (and the distinction from Witham) would be the plainer if, instead of imposing the requirement as a pre-condition of filing the petition, it was made a pre-condition of the court actually making the bankruptcy order which sets the administrative process in train.   But the reality would be the same and the petitioner not in the least advantaged.    The existence of constitutional rights cannot depend upon a difference as narrow as this.

27.	In an academic commentary upon this case in 1998 JR at page 217, Mr Mark Elliott of Queen’s College, Cambridge, wrote:
"The present case ... identifies an important limit on the constitutional right of access to justice:  while it reserves the court’s normal jurisdiction, it does not apply to those powers exercised by the court which are coincidentally, rather than inherently, part of the judicial function.   Thus, the fact that recourse is sought to a court is not sufficient to activate the right;  it is the reason for which access is desired which is of the essence."

28.	The emphasis there, of course, is upon the other distinction between this case and Witham: the fact that whereas here access to the court is sought only to take advantage of a “benign” “self-standing administrative scheme” (to use Laws J’s terms), Witham was concerned with access to the courts for “the adjudication of general disputes”, “disputes between man and man, and between man and state”.

29.	Although I accept that this distinction too is important (and, as I shall later explain, regard it as taking this process outside the scope of Article 6 of the Convention), 	it seems to me arguably more problematic than the first.   I would, for example, find it difficult to accept that, were a debtor able to pay the administration fee but unable to pay the court fee, he could properly be denied access to the scheme merely because “the court’s normal jurisdiction” (as Mr Elliott put it) was not being invoked.   Parliament having given control of the scheme to the court, the court door ought I think to be open for the purpose provided only and always that the debtor can meet the scheme’s financial and other requirements.

30.	Perhaps, however, that is to over-analyse the case.    Both distinctions exist and, thin though each individually may plausibly be made to appear, I am persuaded that in combination they take this case outside the application of the Witham principle.   There must come a point at which a constitutional right of the character identified in Witham shades into no more than a highly desirable social interest.   The availability of the bankruptcy rehabilitation scheme appears to me to cross this border.   

31.	Although this conclusion makes it strictly unnecessary to address the remaining issues,  I nevertheless think it right to do so.   The points with regard to statutory construction are themselves of some importance.

32.	x2.	Assuming, contrary to my view, that debtors do indeed have a constitutional right to petition the court for their own bankruptcy and that this right is denied to them when they cannot satisfy the deposit requirement, is its abrogation nevertheless permitted by the legislation?

33.	Abrogation, of course, results from the combined effect of Article 8 of the 1986 Order and Rule 6.42(1) of the 1986 Rules.   The question is whether these are intra vires respectively sections 415 and 412 of the 1986 Act.

34.	The court held in Witham that only specific provisions (express words) in the primary legislation, can abrogate constitutional rights.   As, however, Laws J observed in the present case, some doubt as to that was subsequently expressed by Lord Browne-Wilkinson in Pierson v Secretary of State for the Home Department [1998] AC 539 at 575:
"Although I must not be taken as agreeing with everything said in the judgment in that case [ex p Witham] (in particular whether basic rights can be overridden by necessary implication as opposed to express provision), I have no doubt that the decision was correct for the principal reasons relied on by Laws J in his judgment.   Such basic rights are not to be overridden by the general words of the statute since the presumption is against the impairment of such basic rights."

35.	Before us, Mr Sales has relied additionally upon an earlier House of Lords authority:  Westminster Bank v Beverley Borough Council [1971] AC 508 where at page 529 Lord Reid said:
"The appellant’s argument is really founded on the principle that 

‘A statute should not be held to take away private rights of property without compensation unless the intention to do so is expressed in clear and unambiguous terms’ (per Lord Warrington in Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners [1927] AC 343, 359).

I entirely accept the principle.   It flows from the fact that Parliament seldom intends to do that and therefore before attributing such an intention to Parliament we should be sure that that was really intended.   I would only query the last words of the quotation.    When we are seeking the intention of Parliament that may appear from express words but it may also appear by irresistible inference from the statute read as a whole.   But I would agree that, if there is reasonable doubt, the subject should be given the benefit of the doubt."

36.	Mr Sales furthermore, as earlier indicated, invokes the long legislative history of the bankruptcy scheme and the circumstances in which it came to be re-enacted in 1986 as an entire and continuing code.   In this connection he relies upon what Lord Lowry said in Hanlon v The Law Society [1981] AC 124 at 193 - 194:
"A study of the cases and of the leading text books [Craies, Maxwell, and Halbury’s Laws] appears to me to warrant the formulation of the following propositions:

 1.	Subordinate legislation may be used in order to construe the parent Act, but only where power is given to amend the Act by regulations or where the meaning of the Act is ambiguous.

 2.	Regulations made under the Act provide a Parliamentary or administrative contemporanea expositio of the Act but do not decide or control its meaning:  to allow this would be to substitute the rule-making authority for the judges as interpreter and would disregard the possibility that the regulation relied on was misconceived or ultra vires.

 3.	Regulations which are consistent with a certain interpretation of the Act tend to confirm that interpretation.

 4.	Where the Act provides a framework built on by contemporaneously prepared regulations, the latter may be a reliable guide to the meaning of the former.

 5.	The regulations are a clear guide, and may be decisive, when they are made in pursuance of a power to modify the Act, particularly if they come into operation on the same day as the Act which they modify.

 6.	Clear guidance may also be obtained from regulations which are to have effect as if enacted in the parent Act."

37.	There can be no doubt that the empowering provisions of the primary legislation here are capable of being read as authorising the payment of a deposit to be made a pre-condition of petitioning for bankruptcy in every case.   That, indeed, is their natural construction;  the question rather is whether they should be “read down”.   The very fact that this question arises pre-supposes that they are (and surely the appellant must assert that they are) ambiguous, i.e.  capable of being understood and applied in two different senses.   True, ambiguity is a concept more readily associated (as in Hanlon itself) with provisions other than empowering clauses.   In principle, however, the approach to construction should not differ on this account.   The first of Lord Lowry’s six propositions is thus engaged.   What, then, of Mr Sales’ proposed reliance upon the other principles?

38.	In seeking to invoke these Mr Sales emphasises the following features of the history  and enactment of the present scheme.   First, Parliament over the last century has enacted the rule-making power in general terms,  the rule itself each time being enacted in the same terms.   Indeed, s.127(1) of the 1883 Act and s.132 of the 1914 Act were in altogether more general terms than ss.412 and 415 of the 1986 Act and yet were similarly used to enact secondary legislation requiring a deposit to be paid in all cases as a precondition of petitioning for bankruptcy.   S.412(2), be it noted, expressly provides for a rule corresponding to the pre-existing rule made under s.132 of the 1914 Act.   This was rule 146 of the Bankruptcy Rules 1952 which had repeated the requirement imposed by Rule 149 (1) of the 1915 Rules that a deposit had to be paid before a petition could be received by the court.   True, the legislation has never provided in terms that the administration fee shall be charged without exception in all cases and never remitted.   But that has always been the position and Parliament cannot be supposed to have thought otherwise.   Small wonder that Mr Allen concentrates his attack upon the order made under s.415 rather than upon Rule 6.42(1) itself.

39.	Second, under both the 1883 Act and the 1914 Act, the regulations were said to “have effect as if enacted by this Act” (see proposition 6) and in each case were brought into effect on the same day as the Act.   The 1986 subordinate legislation was likewise brought into effect on the same day as the Act, again as a single comprehensive code, and may be thought very obviously to have provided “a Parliamentary or administrative contemporanea expositio of the Act” (see proposition 2).   It is, submits Mr Sales, intrinsically likely that Parliament intended the powers in the 1986 Act to authorise the making of the subordinate legislation in fact made (particularly having regard to the unusual manner in which the 1986 Act was drafted alongside the relevant subordinate legislation following the passing of the 1985 Act which in the event was never brought into force);  and intrinsically unlikely that Parliament was intending to cut down the scope of the powers conferred under the preceding Acts to make subordinate legislation requiring payment of a deposit in every case.

40.	For my part I find these arguments irresistible and have not the least doubt that the history of this legislation shows Parliament to have contemplated the Lord Chancellor making (and to have intended empowering him to make) the very Rules and Orders he did make i.e. to the same effect as those made consistently down the years.   I therefore find myself in respectful disagreement with Laws J on this point.   His reasoning I understand to be essentially as follows:
 1.	“Whether express words are necessary or not, the abrogation of constitutional rights must require specific provision by Parliament to that effect, since that is the only means by which the common law can accord such rights a special status;  otherwise they are writ in water.”   (page 773(j))

 2.	“[Regulations] cannot colour the strength of a vires challenge;  a fortiori in a case where constitutional rights are in play.”  (page 777(g))

 3.	“[Where] there is some ambiguity or lack of clarity in the main Act ... such a circumstance would rule out the possibility that it might authorise interference with constitutional rights.”  (page 777(j)).

41.	My difficulty with this reasoning is that it necessarily rests upon the premise that only express words can abrogate or authorise the abrogation of constitutional rights.   On this premise it would of course follow that nothing ambiguous could suffice so that the Hanlon propositions could never come into play.   But if, as Lord Reid stated, rights (however fundamental) can be abrogated “by irresistible inference from the statute read as a whole”, then it would seem to me logically to follow first that a process of construction of provisions which are themselves unclear must necessarily be embarked upon, and second that there is room in this process for the application of the Hanlon propositions.   I recognise, of course, the need for caution sounded by Lord Lowry himself in proposition 2.   But to recognise that a regulation cannot be presumed intra vires merely because it was in fact made is by no means to discount the possibility that in some circumstances a regulation may illuminate the true extent of the empowering provision.    Clearly the more fundamental the right affected by the regulation, the less likely it is that Parliament will have authorised its impairment and the greater will be the court’s need to be satisfied that such indeed was Parliament’s true intention.   An irresistible inference will not readily be drawn.   But there will be circumstances in which to deny it would be to fly in the face of reason.   That in my judgment is the situation here.   As I observed earlier, the history of this legislation and its re-enactment in a composite code in 1986 make it quite unreal to suppose that Parliament intended other than to empower the making of a deposit payment a necessary precondition of any bankruptcy petition.

42.	There is, I acknowledge, a degree of artificiality involved in separating out these first two issues.   One becomes engaged upon a fiction:  addressing issue 2 for all the world as if there is anything inherently unlikely in Parliament having decided to make the scheme for the rehabilitation of debtors available only at a price.   Nevertheless, discounting that unreality as best I may, and pretending for this purpose that rehabilitation from one’s debts without making any contribution towards the administration costs constitutes a right which “everyone living in a democracy under the rule of law ought to enjoy” (Witham’s suggested touchstone of a constitutional right), I unhesitatingly conclude that Parliament has authorised its abrogation here.  Indeed it is plain that Parliament never intended to confer any such right in the first place.

43.	Since this judgment was written, counsel’s further researches have uncovered a fresh authority on this part of the case, Re Fletcher, A Debtor, Fletcher v Official Receiver [1995] 1 Ch. 28.   The Court of Appeal held there that the effect of s.168(3) of the 1914 Act was to render lawful the whole code of rules made under the 1883 Act even if those rules had in fact been ultra vires the 1883 Act.   Lord Evershed MR at page 45 upheld a contention:
"... that the effect of that subsection was not only to give, notwithstanding the repeal of the Act of 1883, statutory force to the existing Bankruptcy Rules of 1886 to 1990 ..., but also to give a legislative imprimatur to the proposition that such rules would have been validly made under s.132(1) of the Act of 1914;  with the necessary consequence that rules subsequently made in identical or substantially identical terms under the same section would have the same force and efficacy.”

44.	Without the benefit of that authority’s citation, Laws J at page 776 e - h held precisely the contrary:
"S.168(3) was not in my judgment intended to confer vires where previously there was none."

45.	Mr Allen seeks to counter Fletcher’s impact upon this case by reference to Lord Jauncey’s conclusion in Re Smith at page 238 that the 1986 Act is to be construed:
"... as a piece of new legislation without regard to 19th century authorities or similar provisions of repealed Bankruptcy Acts:  an approach which was, in my view, correctly adopted by the Court of Appeal in In Re a Debtor (No. 1 of 1987) [1998] 1 WLR 271."

46.	In In Re a Debtor Sir Donald Nicholls V-C said at page 276:
"The new [1986] code has made many changes in the law of bankruptcy, and the court’s task, with regard to the new code, must be to construe the new statutory provisions in accordance with the ordinary cannons of construction, unfettered by previous authorities."

47.	Powerful though those dicta are, in my judgment they apply only to fresh situations such as arise out of the changes made in 1986 with regard to the bankruptcy scheme as a whole.    They do not detract from the weight of the court’s judgments in Fletcher which concerned the very point now at issue.   Fletcher accordingly reinforces the view to which I had already come on this part of the case.

48.	x3.	I come finally to the new questions raised on appeal, those arising under the ECHR:   does the unremittable deposit requirement violate the appellant’s rights under Articles 6 and/or 14 and, if so, does this impact on either of the earlier issues?

49.	So far as material these Articles provide:
"6(1)	In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.   ..."

"14   The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as ... property ..."

50.	The critical first question arising is whether the court’s jurisdiction over a debtor’s own petition in bankruptcy involves the determination of civil rights and obligations.   A good deal of Convention case law was cited to us upon this question.   I propose to take it, however, very shortly.   It appears to me plainly to establish that Article 6(1) only applies if there is a dispute (“contestation”) the outcome of which will decide rights and obligations.   As was stated by the court in the most recent of the authorities put before us, Gustafson v Sweden [1997] 25 EHRR 623 at 634:
"The court recalls that the applicability of Article 6(1) under its “civil head” requires the existence of a “dispute” over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law.   That dispute must be genuine and serious;  it may relate not only to the existence of a right but also to its scope and to the manner of its exercise.    Furthermore the outcome of the proceedings must be directly decisive for the right in question."

51.	The particular issue there was whether the applicant’s contention that he had suffered damage as a result of a crime - an essential condition specified by the Swedish Act for the award of compensation - involved such a “dispute” over a “right” at least arguably “recognised under domestic law.”   To my mind unsurprisingly, the court concluded that it did:  the applicant’s “eligibility under the Act was ... in dispute.”   Thus Article 6(1) applied to the proceedings before the Criminal Damage Compensation Board.   But that decision seems to me to provide no assistance to the appellant here.   There is here no relevant “right” “recognised under domestic law” -  save only the conditional right, conditional that is upon payment of the deposit, to seek the advantages of the bankruptcy scheme.   And there is certainly no dispute between the appellant and anyone else. 

52.	Mr Allen sought in this regard to pray in aid the court’s earlier decision in Benthem v The Netherlands (1985) 8 EHRR 1 where, at paragraph 34, appears this:
"Furthermore, Article 6 does not cover only “private-law disputes in the traditional sense, that is disputes between individuals or between an individual and the state to the extent that the latter had been acting as a private person, subject to private law”, and not “in its sovereign capacity”.   ...  “only the character of the right at issue is relevant”"

53.	This, suggested Mr Allen, was inconsistent with what Laws J said below in the first of the passages I have quoted from his judgment.   To my mind, however, this is to misunderstand what the court was saying in Bentham.   The point there being made was simply that Article 6 applies equally to public law as to private law disputes.  Bentham itself involved the disputed revocation of a statutory licence initially granted to the applicant to operate an installation for the supply of liquid petrol to vehicles.   He needed the licence to operate his business.   It was, moreover, assignable to third parties.   Again it was not surprisingly held that “a ‘civil right’ was at stake”.

54.	Similarly recognisable “rights”, and “disputes” have been in issue in the various other cases cited - as to whether a disciplinary tribunal had appropriately suspended the applicants from practising medicine in Le Compte v Belgium (1981) 4 EHRR 1;  as to whether the applicant’s public transport licence had been appropriately revoked by an administrative authority in Pudas v Sweden (1987) 10 EHRR 380;  and as to whether the applicant had properly been declared bankrupt (with the result that he was deprived of his right to manage his property)  at the suit of a creditor in ANCA v Belgium (1984) 40 DR170.   The critical distinction between ANCA and the present case is, of course, that the creditor there was applying to have the debtor put into bankruptcy against his will.   There was a dispute between them and the debtor’s rights were in issue.   Here, by contrast, as has already been explained, the debtor petitioner is herself seeking to benefit from a “benign administrative system “;  she is not engaging in a dispute with anyone.

55.	Article 6(1) accordingly appears to me to have no application to the bankruptcy process sought to be instigated, as here, at the suit of a debtor.   But even were it otherwise, I would hold that if and insofar as the deposit precondition constitutes a restriction upon the appellant’s right to petition the court, it has a legitimate aim and is by its nature proportionate to that aim.   Its legitimacy lies in an aspiring bankrupt’s need to have the bankruptcy administered by a third party and the state’s entitlement to require some payment at least in respect of the cost of that third party’s service.   The fee represents but a modest proportion of that cost and can hardly therefore be judged disproportionate.

56.	Given that no Convention right has been denied to the appellant under Article 6, her argument under Article 14 necessarily fails also.

57.	In short, the same considerations as persuade me that under domestic law no constitutional right has been infringed lead me to the view that neither is the Convention breached.   I would accordingly dismiss this appeal.

58.	I add but a single footnote.   Conspicuously absent from the challenge is any Wednesbury ground of attack.   True, Mr Allen argues that this method of controlling the costs to the Treasury of the official receiver is a blunt one, distinguishing neither between the complex cases and the simple ones (the costs of administering which must be different) nor between the blameless debtor and the wanton one.   He may well be right too in suggesting that it will often be a matter of chance as to which debtors have retained or can borrow the £250 required, and, indeed, that it is likely to be the most deserving debtors who will have paid their creditors to the hilt and left themselves with nothing.   But none of these considerations amount to a Wednesbury challenge.   That said, it is not difficult to recognise the hardship and worry that many will suffer through their financial exclusion from the undoubted benefits of this rehabilitation scheme and, in the more compassionate times in which we now live, it may be hoped that the competing interests will be considered anew and perhaps a fresh balance struck.

Lord Justice Chadwick:	

59.	The question on this appeal is whether the relevant provisions of the Insolvency Fees Order 1986 (SI 1996 No 2030) are unlawful to the extent that they preclude the exercise of any discretion to waive the deposit required upon the presentation of a bankruptcy petition by a debtor. The judge held that the provisions were not unlawful.

60.	For well over one hundred years Parliament has provided machinery whereby an insolvent debtor can petition for his own bankruptcy, with the beneficial consequences that he is relieved from pressure from his creditors and, in due course, discharged from his debts. The modern bankruptcy code is now contained in Part IX of the Insolvency Act 1986. Section 264(1) enables the debtor to present his own petition. Section 285(1) empowers the court to stay any action, execution or other legal process while bankruptcy proceedings are pending. Section 285(3) provides that, after the making of a bankruptcy order, no creditor whose debt is provable in the bankruptcy shall have any remedy against the property or person of the bankrupt. Section 279 provides that a bankrupt shall be discharged from his bankruptcy at the end of the period of three years beginning with the making of the bankruptcy order - or within the period of two years if a certificate for summary administration of the bankrupt’s estate has been issued. The effect of discharge is that the bankrupt is released from all the bankruptcy debts - section 281(1) of the Act. 

61.	The terms on which these beneficial consequences are made available to the debtor include those now set out in sections 283 to 291 of the Insolvency Act 1986, which comprise Chapter II (“Protection of the Bankrupy’s estate and investigation of his affairs”) in Part IX of that Act.  Section 288(1) requires the bankrupt to submit a statement of his affairs to the official receiver within 21 days of the making of the bankruptcy order. Section 291(1) requires the bankrupt to deliver to the official receiver possession of his estate and and all books, papers and other records which relate to his estate and affairs. Section 289(1) requires the official receiver to investigate the conduct and affairs of the bankrupt and to make such report to the court as he thinks fit. In performing that task, the official receiver may apply to the court for a public examination of the bankrupt; and (unless the court otherwise orders) must so apply if required to do so by not less than one half in value of the bankrupt’s creditors - section 290 of the Act. In short, the debtor obtains the protection of a bankruptcy order on terms that he delivers up his estate for administration for the benefit of his creditors and submits his affairs to investigation by an officer of the court (the official receiver) appointed by the Secretary of State under section 399 of the Act.

62.	The performance of his functions by the official receiver involves, or is likely to involve, expense. Provision is made in the Insolvency Act 1986 for that expense to be funded by fees. Section 415(1) of the Act is in these terms:
415(1)	There shall be paid in respect of -
(a)	proceedings under Parts VIII and IX of this Act, and 
(b)	the performance by the official receiver or the Secretary of State of functions under those Parts,
such fees as the Lord Chancellor may with the sanction ot the Treasury by order direct.

63.	In the exercise of that power the Lord Chancellor has made the Insolvency Fees Order 1986 and the Insolvency Fees (Amendment) Order 1994 (SI 1994 No 2541). The fees payable under the 1986 Order, as amended in 1994, in respect of proceedings under Parts VIII and IX of the Act are prescribed by Article 4 of, and set out in Part II of the Schedule to, that order. The present application and the appeal do not seek to challenge those fees. The question on this appeal relates to the provision of a deposit as security for those fees.

64.	Section 415(3) of the Act is in these terms:
415(3)	The Lord Chancellor may, with the sanction of the Treasury, by order provide for sums to be deposited, by such person, in such manner and in such circumstances as may be specified in the order, by way of security for -
(a) 	fees payable by virtue of this section, . . . 

65.	It was in the exercise (or, as the appellant would say, the purported exercise) of that power that Articles 8 to 13 were included in the 1986 Fees Order when made by the Lord Chancellor and laid before Parliament. Those articles are in these terms, so far as material:
 8(1)	Before a . . . bankruptcy petition can be presented the appropriate deposit (as specified in Article 9 below) must be paid to the court in which the petition is to be presented.
  (2)	 That deposit is security for -
(a)  	. . . Fee No. 2 listed in Part II of [the Schedule to this Order] . .  (such fee being referred to in this Order as “the administration fee”),

 9	The appropriate deposit referred to in Article 8 is - 
(a) 	. . . 
(b)	in relation to a bankruptcy petition to be presented under section 264(1)(b), [£250];
(c)	in relation to a bankruptcy petition to be presented under section 264(1)(a), (c) or (d), [£300].

 10	The court shall . . . transmit the deposit paid to the official receiver attached to the court.

 11(1)	In the circumstances specified in this Article a deposit made under Article 8 above is to be repaid to the person who made it.
(2)	Where a . . . bankruptcy petition under the Act is dismissed or withdrawn the deposit shall be repaid in full, unless -
(a)	a . . . bankruptcy order has been made . . . 
(3)	If . . . the bankrupt’s estate is sufficient to to pay the whole or part of the relevant administration fee, them the deposit shall be repaid to the extent that it is not required for payment of that fee.
(4)	Where a . . . bankruptcy order is annulled, rescinded or recalled, the deposit shall be repaid to the extent that it is not required for payment of the relevant administration fee . . .

Fee No. 2 in Part II of the schedule to the order (“the administration fee”) is a fee of £320 “for the performance by the official receiver of his general duties as official receiver on the making of a bankruptcy order”. The deposit payable as security for that fee by debtor who presents his own petition under section 264(1)(b) of the Act is £250. A slightly higher deposit, £300, is payable by a creditor who presents a petition under section 264(1)(a).

66.	Rule 8(1) of the Insolvency Fees Rules 1986 does not stand alone. Rule 6.42(1) of the Insolvency Rules 1986 (SI 1986 No 1925) prescribes the procedure to be adopted on the presentation and filing of a debtor’s petition for his own bankruptcy. It is in these terms:
6.42(1)	  The petition and a statement of affairs shall be filed in court, together with three copies of the petition, and two copies of the statement. No petition shall be filed unless there is produced with it the receipt for the deposit payable on presentation.  [emphasis added]

67.	The Insolvency Rules are not made under section 415 of the Act. They are made under a different rule-making power - that contained in section 412(1). Section 412(2) is in these terms:
412(2)	Without prejudice to the generality of subsection (1), or to any provision of [Parts VIII to XI of this Act] by virtue of which rules under this section may be made in respect to any matter, rules under this section may contain -
(a)	any such provision as is specified in Schedule 9 to this Act or corresponds to provision contained immediately before the appointed day in rules made under section 132 of the Bankruptcy Act 1914; . . . 

68.	Section 132 of the Bankruptcy Act 1914 empowered the Lord Chancellor, with the concurrence of the President of the Board of Trade, to make general rules for carrying into effect the objects of that Act. The rules made under that section included the Bankruptcy Rules 1915. Rule 149 of the 1915 Rules was in these terms:
149(1)	Upon the presentation of a petition either by the debtor or by a creditor the petitioner shall deposit with the Official Receiver the sum of five pounds, and such further sum (if any) as the Court may from time to time direct, to cover the fees and expenses to be incurred by the Official Receiver; and no such petition shall be received unless the receipt of the Official Receiver for the deposit payable on the presentation of the petition is produced to the proper officer of the Court.
      (2)	The Official Receiver shall account for the money so deposited to the creditor or, as the case may be, to the debtor’s estate . . . 

69.	The rule was replaced in 1926 (by a new rule introduced by the Bankruptcy Rules 1926) which, for the first time differentiated between the deposit payable by a debtor and that payable by a creditor;  but it was otherwise unaffected. The rule was again replaced in 1952, by rule 146 of the Bankruptcy Rules 1952. Although the language altered, the substance did not. The amounts were increased to £50 and £90 respectively by the Bankruptcy (Amendment) Rules 1976 (SI 1976 No, 1932).

70.	The position, therefore, was that, immediately before the coming into force of the 1986 Act and its associated rules, the provisions now contained in rule 6.42(1) of the Insolvency Rules 1986 and rules 8 and 9 of the Insolvency Fees Rules 1986, in so far as those rules relate to bankruptcies and save as to the amounts of the fees, were already in force by reason of rules made under section 132 of the Bankruptcy Act 1914. The answer to the question “could those provisions have been included in rules made under section 412 of the 1986 Act” must, in my view, be an unequivocal affirmative. It is plain that Parliament did so intend.

71.	On a true analysis rule 8(1) of the Insolvency Fees Rules 1986 adds nothing to rule 6.42(1) of the Insolvency Rules. If rule 8(1) had not been included in the Fees Rules, the requirements as to the payment of a deposit as a condition precedent to the presentation of a petition would remain - because of the need to present a receipt for that deposit imposed by rule 6.42(1). But the appellant has not sought to challenge rule 6.42(1) of the Insolvency Rules - perhaps for the good reason that it is incapable of challenge in the light of section 412(2)(a) of the 1986 Act. The true challenge, therefore, must be to rule 9 of the Insolvency Fees Rules 1986, which prescribes the amount of the deposit and contains no provision for waiver. But it is plain that Parliament did intend that rules made under section 415 should provide for sums to be deposited as security for fees - see section 415(3) of the Act - and it is equally plain (i) that Parliament knew how  that power had  been exercised in the past and (ii) was content that rules made in the past should be re-introduced under the new Act.

72.	In those circumstances it seems to me that the answer to the question “did Parliament intend that rules made under section 415(3) should provide for the payment of deposits, without provision for waiver in cases of  hardship” is not open to doubt.  Parliament did so intend.   If that will have the effect of excluding debtors from the benefits of the bankruptcy code,  Parliament must be taken to have accepted that consequence.  That had been the position since 1883 - see rule 128 of the Bankruptcy Rules 1883. If that consequence is now thought unacceptable, it is for Parliament to alter the law or for the Lord Chancellor, as the rule-making body, to make an amendment to the rules.  It is not for the court to give effect to whatever view it might hold as to the appropriate social policy in this field under the guise of discovering some hitherto unrecognised fundamental constitutional right.

73.	I would dismiss this appeal.  

Mr Justice Rattee:	

74.	I have had the advantage of reading in draft the judgments given by Lord Justice Simon Brown and Lord Justice Chadwick.   I entirely agree with both and accordingly that this appeal should be dismissed.

ORDER:  	Appeal dismissed; leave to appeal refused;
legal aid taxation granted.