judgement:
On 6 August 2003 a young man of 17 and a young girl of 13 had sexual intercourse.
Afterwards the young girl told her mother that this had occurred but she suggested that she had not been a willing participant.
Understandably, her mother went to the police and the young man was arrested.
Later her daughter retracted her account of not having consented to sexual relations.
The young man was therefore charged with a less serious offence than that which he might have faced.
It was, nonetheless, a serious charge.
He was charged with having had unlawful carnal knowledge of a girl under the age of 14 years contrary to section 4 of the Criminal Law Amendment Acts (Northern Ireland) 1885 1923.
The young man pleaded guilty to that charge at Belfast Crown Court on 22 June 2004.
That plea had been entered on the basis that the offence created by section 4 was one in which reasonable belief that the girl was over the age of 14 was not available to him as a defence.
The defendant was sentenced to three years detention in a Young Offenders Centre.
The sentence was suspended for two years.
Later, having received different legal advice from that which had prompted his plea of guilty, the young man applied to the Court of Appeal in Northern Ireland for leave to appeal against his conviction.
The issue before the Court of Appeal was whether section 4 of the 1885 Act created an offence in which proof that the defendant did not honestly believe that the girl was over the age of 14 was not required.
That is also the issue with which this court has had to deal.
The legislative provisions
Traditionally, sexual offences (other than forced intercourse) against girls and young women have been dealt with in legislation according to age bands, with, in general, more grave offences reserved for and heavier penalties imposed for crimes involving younger females.
A clearly discernible historical trend of increasing the age of the victim at which liability for more serious offences is incurred, while reducing the sentence to be imposed, can be detected.
Thus, section 20 of the Offences against the Person (Ireland) Act 1829 provided that any person who had unlawful carnal knowledge of a girl under the age of ten years was guilty of a felony, punishable by death.
By contrast, the same section provided that unlawful carnal knowledge of a girl between ten and 12 years was a misdemeanour punishable by a term of imprisonment at the discretion of the court.
Section 50 of the Offences against the Person Act 1861 reduced the sentence to be imposed for the felony of unlawful carnal knowledge of a girl under the age of ten to, at the discretion of the court, penal servitude for life or for a term of not less than three years or imprisonment for a term not exceeding two years with or without hard labour.
For unlawful carnal knowledge of a girl between the ages of ten and 12, a defendant was guilty of a misdemeanour under section 51 of the same Act and liable to be sentenced to penal servitude for three years or to be imprisoned for up to two years with or without hard labour.
Section 3 of the Offences against the Person Act 1875 made it a felony to unlawfully and carnally know and abuse any girl under the age of 12 years.
Section 4(3) of the Criminal Law Amendment Act (Northern Ireland) 1923 provided that the Criminal Law Amendment Acts (Northern Ireland) 1885 1912 and the Criminal Law Amendment Act (Northern Ireland) 1923 should, to the extent to which they applied to Northern Ireland, be cited together as the Criminal Law Amendment Acts (Northern Ireland) 1885 1923.
Section 2 of the 1885 1923 Acts provided for a procuration offence: Any person who . procures or attempts to procure any girl or woman under 21 years of age to have unlawful carnal connexion, either within or without the Queen's dominions, with any other
person or persons . shall be guilty of a misdemeanour
Section 4, as amended, and in so far as is relevant to the present appeal, provided that Any person who unlawfully and carnally knows any girl under the age of 14 years shall be guilty of felony, and being convicted thereof shall be liable to be imprisoned for life or to be fined or both. (As originally enacted, section 4 had stipulated an age of 13 years.
This was increased to 14 by the Children and Young Persons Act (Northern Ireland) 1950).
As also originally enacted, section 5 of the 1885 Act provided for an offence of unlawful carnal knowledge of a girl between 13 and 15.
The age limit was increased by section 13 of the 1950 Act so that in its amended form it provided as follows: Any person who . unlawfully and carnally knows or attempts to have unlawful carnal knowledge of any girl under the age of 17
years; shall be guilty of a misdemeanor
offence of permitting defilement on premises: Section 6, as amended by section 13 of the 1950 Act, provided for an Any person who, being the owner or occupier of any premises, or having, or acting or assisting in, the management or control thereof induces or knowingly suffers any girl to resort to or be in or upon such premises for the purpose of being unlawfully and carnally known by any man, whether such carnal knowledge is intended to be with any particular man or generally, shall . if such girl is under the
age of 17 years be guilty of a misdemeanour
Section 7 provided for an offence of abduction: Any person who with intent that any unmarried girl under the age of 18 years should be unlawfully and carnally known by any man, whether such carnal knowledge is intended to be with any particular man, or generally takes or causes to be taken such girl out of the possession and against the will of her father or mother, or any other person having the lawful care or charge of her, shall be guilty of a misdemeanour, and being convicted thereof shall be liable at the discretion of the court to be imprisoned for any term not exceeding two years or to be fined or both.
Provided that it shall be a sufficient defence to any charge under this section if it shall be made to appear to the court or jury that the person so charged had reasonable cause to believe that the girl was of or above the age of 18 years.
Provisos of a similar nature to that contained in the latter part of section 7 were included in sections 5 and 6 of the 1885 Act as originally enacted.
These were removed by section 2 of the 1923 Act, as amended by section 13 of the 1950 Act: Reasonable cause to believe that a girl was of or above the age of 17 years shall not be a defence to a charge under sub section (1) of section five or under section six of the Criminal Law Amendment
Act 1885
In August 2003, therefore, the Criminal Law Amendment Acts (Northern Ireland) 1885 1923 included five offences in which age was an essential component of the actus reus, of which two (sections 2 and 4) were silent as to the effect, if any, of reasonable belief as to the age of the girl; two (sections 5 and 6) were subject to an express exclusion of a defence of reasonable belief as to age; and one (section 7) was subject to a defence of reasonable belief as to age.
Thus, from 1885 until 1923, unlawful carnal knowledge of a girl of 13 years or more was not an offence under section 4.
During the same period such an offence was committed under section 5 of the 1885 Act if the girl was between the ages of 13 and 15 but a defence of reasonable belief that the girl was 16 years or more was available.
From 1923 until 1950 unlawful carnal knowledge of a girl of 13 or more continued not to be an offence under section 4.
During that time, however, unlawful carnal knowledge of a girl between 13 and 15 years did not require proof under section 5 that the defendant did not believe that the girl was over the age of 16.
From 1950 onwards sexual intercourse with a girl under the age of 14 became an offence under section 4.
The appellants arguments
The appellant argued that the approach to the interpretation of section 4 of the 1885 1923 Acts must be informed by a fundamental common law principle.
This was that there should be a mental element, commonly referred to as mens rea, for criminal liability unless a clear intention was evinced by the words of a statute that a particular criminal offence should be one of strict liability.
The presumption that mens rea was required could only be displaced, it was suggested, where it could be shown that this was the unmistakable intention of Parliament.
Such an intention was less readily found to exist where the offence was a serious one.
In this regard, reliance was placed on the judgment in R v Muhamad [2003] QB 1031 where, at para 19, Dyson LJ said: The offences where no mental element is specified, for the most part, attract considerably lower maximum sentences than those where a mental element is specified.
Since section 4 was silent on the question of whether proof of mens rea was required, the appellant submitted that the offence specified in the provision could only be regarded as not requiring such proof if that had to be unavoidably and necessarily implied.
The suggestion that a particular provision imposed strict liability had to be considered, the appellant argued, in its statutory and social contexts.
The Criminal Law Amendment Acts (Northern Ireland) 1885 1923 fell to be interpreted as they stood at the time of the appellant's offence: that is, with an express provision making clear that no defence of reasonable belief applied to sections 5 and 6, but remaining silent as to the mens rea of an offence contrary to section 4.
The legislative history of the relevant provisions, although not irrelevant, was, the appellant argued, merely one factor to be taken into account.
In this regard, reference was made to the speech of Lord Steyn in R v K [2002] 1 AC 462, para 30 where he said that it was unhelpful to inquire into the history of subjective views held by individual legislators and that the always speaking nature of a statute dealing with sexual offences meant that a particular provision had to be interpreted in the world as it exists today, and in the light of the legal system as it exists today.
The statutory context of section 4 therefore suggested that the presumption that mens rea was required had not been displaced.
The appellant argued further that, if an implication of strict liability was to be considered as compellingly clear, it must arise from a coherent and consistent legislative scheme.
The Acts of 1885 1923 did not fit that description.
The express provision of a defence of reasonable belief to an offence under section 7, when considered alongside the explicit exclusion of such a defence to offences under sections 5 and 6, and silence on the issue under section 4, meant that the legislation contained signposts which pointed in various directions.
It was impossible to detect a convincingly obvious implication.
As to the social context of the offence under section 4, the appellant again referred to the particular strength of the presumption where the offence was serious or, as described by Lord Scarman in Gammon (Hong Kong) v Attorney General of Hong Kong [1985] AC 1, 14, truly criminal.
The offence under section 4 was unquestionably serious and carried a maximum penalty of life imprisonment.
As Lord Bingham said in Sheldrake v Director of Public Prosecutions [2005] 1 AC 264, para 6, The more serious the crime, and the more severe the potential consequences of conviction, the less readily will it be displaced.
The appellant accepted that section 4 dealt with an issue of social concern but pointed out that Lord Scarman in Gammon (Hong Kong) v Attorney General of Hong Kong had observed that the presumption of mens rea should stand unless it could be shown that the creation of strict liability would be effective to promote the objects of the statute.
The objects of the statute in this context were considered to be the encouraging of greater vigilance to prevent the commission of the prohibited act.
To the extent that strict liability might be said to promote the objects of the statute by encouraging greater vigilance against sexual intercourse with girls under the age of 17, it was submitted that this was sufficiently achieved in Northern Ireland by the strict liability imposed under section 5.
Finally, in a written submission provided on his behalf after the hearing of the appeal before this court, it was pointed out that the appellant could not have been convicted of the section 4 offence in 1885 (the time of the original enactment) since the offence at that time related to girls under the age of 13.
Nor could he have been convicted of such an offence until 1950.
An analysis of whether the common law presumption was displaced had to be conducted against the background that no consistent policy approach had been adopted to the question of whether unlawful carnal knowledge of a girl under 14 years should be a strict liability offence.
The case for the respondent
The proviso introduced by sections 5 and 6 of the 1885 Act introduced for the first time, the respondent explained, a defence of reasonable belief as to the age of the person against whom an offence under these sections was charged.
The background against which the defence had been made available was that R v Prince (1875) LR 2 CCR 154 had held that reasonable grounds for believing that the girl involved was over the age of consent did not constitute a defence under section 51 of the Offences against the Person Act 1861.
But when Parliament came to abrogate that rule in 1885, it did so (by virtue of section 5 of the 1885 Act) only in relation to girls between the ages of 13 and 16.
It did not do so in relation to girls under the age of 13.
The decision not to provide for a similar defence under section 4 of the 1885 Act could not have been other than deliberate, it was argued.
This was not the only distinction between sections 4 and 5, however.
A limitation period of three months on the prosecution of offences under section 5 was also provided for but there was no corresponding provision in section 4. (This limitation period was subsequently increased to 12 months but it was expressly recommended that no such limitation should be introduced for an offence of unlawful sexual intercourse with a girl under the age of 13 because of the gravity of that particular offence in this regard, see R v J [2005] 1 AC 562, para 10).
Section 4 of the 1885 Act also made specific provision for a lesser sentence in respect of an attempt.
And, as originally enacted, it also provided for a less severe sentence with respect to young offenders under 16.
Neither of these different sentencing options was provided for by section 5(1), however.
In England and Wales maintenance of the distinction between, on the one hand section 4 and, on the other, sections 5 and 6 of the 1885 Act, could be seen, the respondent argued, in the amendments introduced by section 2 of the Criminal Law Amendment Act 1922.
It appears that the government had intended to remove altogether the defence of reasonable cause to believe that the girl was over the age of 16 years but, by way of compromise, introduced what has become known as the young mans defence.
By virtue of section 2 of the 1922 Act a man of 23 years or less could avail of the defence (on the first occasion that he was charged with an offence under sections 5 or 6 of the 1885 Act) that he had reasonable cause to believe that the girl was over the age of 16 years.
No such defence was provided for in relation to offences under section 4.
In 1923 the Northern Ireland Parliament, in one of its first items of legislation, achieved, according to the respondent, what Parliament in Westminster had failed to bring about in 1922, namely, the complete abolition of the defence of reasonable belief on the part of the defendant that the girl was above the age of consent.
To have abolished that defence in relation to sections 5 and 6 while leaving open the question whether such a defence might be available in respect of the more serious offence under section 4 was inconceivable, the respondent claimed.
It was therefore argued that it has always been undeniably clear that an offence under section 4 should be one in which proof of mens rea as to the age of the victim was not required.
Discussion
The constitutional principle that mens rea is presumed to be required in order to establish criminal liability is a strong one.
It is not to be displaced in the absence of clear statutory language or unmistakably necessary implication.
And true it is, as the appellant has argued, that the legislative history of an enactment may not always provide the framework for deciding whether the clearly identifiable conditions in which an implication must be made are present.
It is also undeniable that where the statutory offence is grave or truly criminal and carries a heavy penalty or a substantial social stigma, the case is enhanced against implying that mens rea of any ingredient of the offence is not needed.
The strength of the constitutional principle in favour of a presumption that criminal liability requires proof of mens rea finds eloquent expression in what Lord Nicholls, in B (A Minor) v Director of Public Prosecutions [2000] 2 AC 428, 460, referred to as the magisterial statement of Lord Reid in Sweet v Parsley [1970] AC 132, 148 149: there has for centuries been a presumption that Parliament did not intend to make criminals of persons who were in no way blameworthy in what they did.
That means that whenever a section is silent as to mens rea there is a presumption that, in order to give effect to the will of Parliament, we must read in words appropriate to require mens rea . it is firmly established by a host of authorities that mens rea is an essential ingredient of every offence unless some
reason can be found for holding that that is not necessary
where he said: In B (A Minor) Lord Nicholls reinforced that essential message at p 460G the starting point for a court is the established common law presumption that a mental element, traditionally labelled mens rea, is an essential ingredient unless Parliament has indicated a contrary intention either expressly or by necessary implication.
The common law presumes that, unless Parliament has indicated otherwise, the appropriate mental element is an unexpressed ingredient of every statutory offence.
One must begin, therefore, with this strong presumption firmly at centre stage.
And its ready displacement should not be countenanced, as has, perhaps, happened in the past.
In Smith and Hogans Criminal Law, 13th ed (2011), para 7.2 the authors deprecated the tendency of some judges to declaim that the presumption was well embedded only to willingly find that it was easily rebutted.
Lord Bingham made clear in R v K [2002] 1 AC 462, para 18 that description of an offence such as that prescribed by section 4 as an absolute offence or an offence of strict liability is a misnomer.
There must always be deliberation on the part of the defendant in committing the acts which constitute the factual underpinning of the offence.
The real and proper question is whether it must be proved that there was a lack of reasonable belief, on the part of the perpetrator of the acts, that the girl was above the prescribed age.
In R v K at para 17 Lord Bingham referred with approval to Lord Steyns quotation in B (A Minor) at p 470F of Professor Sir Rupert Crosss statement that the presumption that mens rea was required in the case of all statutory crimes was a constitutional principle not easily displaced by a statutory text.
These sturdy assertions provide the setting for the inquiry whether mens rea in relation to the girls age had to be proved in order to found liability under section 4.
That inquiry must start, I believe, with a clear understanding of what the legal position was at the time that the relevant provisions were enacted.
It is true that the subjective intention of individual legislators will not always provide an incontrovertible guide to the meaning of the legislation, as Lord Steyn said in R v K.
But one must at least begin with an examination of what the legislative intention was before considering whether modification of that intention is justified by later amendments or contemporary social contexts.
In my view, there can really be no doubt that section 4 in its original form was intended to impose criminal liability for carnal knowledge of a female under the age of 13 without proof that the perpetrator knew or had reason to believe that she was below that age.
Two considerations make that conclusion inevitable.
Firstly, the decision in R v Prince had confirmed that proof of knowledge or lack of reasonable belief in the age of the victim was not required.
Coming as it did merely ten years before the 1885 Act, that decision formed the crucial backdrop to the enactment of section 4.
It is inconceivable that, had it been intended that such proof was required, section 4 would have remained silent on the issue.
Secondly and relatedly, the juxtaposition of sections 5 and 6 (in which a dispensing proviso was contained) with section 4 makes it impossible to conclude that the absence of such a proviso in section 4 signified anything other than a clear intention that a defence of reasonable belief in the girls age was not to be available.
This is particularly so because the 1885 Act introduced for the first time such a defence in relation to offences of the type provided for in sections 5 and 6.
It seems to me unquestionable that the decision not to extend the defence to offences under section 4 was deliberate and that it clearly signified that the legislature intended that no such defence would be available in relation to offences under that section.
That being so, the next question is whether the amendment in the 1923 Act made any difference to the availability of the defence under section 4.
The appellant contended that the textual amendment of the 1885 Act prompted consideration within a new context of the question whether the presumption that mens rea is required had been displaced.
A change to the statutory framework, the appellant argued, required examination of that question from an entirely new perspective one in which, in contrast to that which had hitherto obtained, the defence of reasonable belief no longer applied to sections 5 and 6 (as a consequence of explicit provision to that effect) but the question of whether it applied to offences under section 4 was open because of the absence of any reference to it in that section.
It would be a curious, indeed anomalous, outcome of the removal of the defence from sections 5 and 6 that it should be implied into section 4 to which it had not previously applied.
At a technical or theoretical level, it can be argued that such a result is feasible because, as the appellant has submitted, the 1885 1923 Acts are to be construed as a whole in their amended form.
Bennion on Statutory Interpretation, 5th ed (2008) describes the effect of textual amendment of a statute at p 290 as follows: . under modern practice the intention of Parliament when effecting textual amendment of an Act is usually to produce a revised text of the Act which is thereafter to be construed as a whole.
Any repealed provisions are to be treated as never having been there, so far as concerns the application of the amended Act for the future. (original emphasis)
The appellant has pointed out that in B (A Minor), in deciding whether the presumption was rebutted, both Lord Nicholls and Lord Steyn had taken account of the amendment of the applicable maximum penalty from two to ten years imprisonment.
And in R v Kumar [2005] 1 WLR 1352, paras 11 13, 28, the Court of Appeal construed section 12 of the Sexual Offences Act 1956 in its present form within an amended statutory framework that included the Sexual Offences Act 1967 and amendments to section 12 in 1994 and 2000, by virtue of which homosexual acts between consenting males of a prescribed age were decriminalised.
It was suggested therefore that a new approach to the interpretation of section 4 is now warranted.
I cannot accept that argument.
In the first place, while the amended legislation is to be construed as a whole in its revised form, it does not follow that its antecedent history be left entirely out of account.
More pertinently, the relevant amendment of the 1885 Act removed a defence which had previously been available for offences under sections 5 and 6 when none had existed for offences under section 4.
To suggest that the removal of the defence under sections 5 and 6 would have the effect of introducing it under section 4 by implication takes contrivance too far.
I am satisfied that in its statutory context section 4 must be interpreted as not requiring proof that the defendant did not know or reasonably believe that the girl was aged 14 or over.
The appellants argument that the Acts of 1885 1923 did not form a coherent and consistent legislative scheme must likewise be rejected.
The fact that the legislation contained signposts which pointed in various directions does not render it incoherent.
It is entirely logical (and in keeping with the historical trend described earlier) that a defence of reasonable belief should be available for the less serious offences prescribed by sections 5 and 6, but that it should not exist for the more grave offence under section 4.
For essentially the same reasons, I would reject the appellants argument that there was no consistent policy approach to the question of whether unlawful carnal knowledge of a girl under 14 years should be a strict liability offence.
On the contrary, the policy approach of protecting younger females by ensuring that a defence of reasonable belief should not be available has been unswerving.
The fact that the age was increased from 13 to 14 does not make the policy inconsistent.
It merely represents the evolution of changing views as to when the policy should take effect.
Finally, there is nothing in the contemporary social context which militates against the denial of the defence of reasonable belief as to age for section 4 offences.
This issue was dealt with authoritatively in R v G (Secretary of State for the Home Department intervening) [2009] AC 92.
In that case the appellant had pleaded guilty to an offence of rape of a child under the age of 13, contrary to section 5 of the Sexual Offences Act 2003.
The prosecution had accepted the appellants claim that the girl had consented to sexual intercourse and had told him that she was 15 years old.
The appellant himself was 15 at the time of the offence and the girl was aged 12.
At para 3 Lord Hoffmann said: The mental element of the offence under section 5, as the language and structure of the section makes clear, is that penetration must be intentional but there is no requirement that the accused must have known that the other person was under 13.
The policy of the legislation is to protect children.
If you have sex with someone who is on any view a child or young person, you take your chance on exactly how old they are.
To that extent the offence is one of strict liability and it is no defence that the accused believed the other person to be 13 or over.
Precisely the same policy considerations underpin section 4 of the 1885 1923 Acts.
Young girls must be protected and, as part of that protection, it should not be a defence that the person accused believed the girl to be above the prescribed age.
As Lady Hale said in para 46 of G, When the child is under 13 [the accused] takes the risk that she may be younger than he thinks she is.
The object is to make him take responsibility for what he chooses to do If you have sexual intercourse with someone who is clearly a child or young person, you do so at your peril.
I would dismiss the appeal.

dataset_name: UK-Abs

summary/full:
The question in this appeal is whether there is a requirement for the prosecution to prove a defendant had an absence of belief that the person they were having sexual intercourse with was over the age of 13, before they can be convicted of an offence of unlawful carnal knowledge of a girl under the age of 14.
The appellant, who was 17 years old at the time, had sexual intercourse with a 13 year old girl.
Initially the girl informed her mother of this fact but told her the intercourse had not been consensual.
The appellant was arrested.
Subsequently however, the girl withdrew the allegation and admitted the sex had been consensual.
As a result, the appellant was charged with the offence of having unlawful carnal knowledge of a girl under the age of 14 contrary to section 4 of the Criminal Law Amendment Acts (Northern Ireland 1885 1923) (the 1885 Act) a serious offence that carries a maximum of life imprisonment.
The appellant was represented and pleaded guilty to the charge at Belfast Crown Court in 2004.
He was sentenced to 3 years detention in a Young Offenders Centre, suspended for 2 years.
He had pleaded guilty on the understanding that it was no defence to a charge under section 4 for the defendant to show he believed the girl was over the age of 13.
Following his conviction the appellant received advice from different solicitors and launched an appeal, arguing that the Crown was indeed required to prove that the appellant did not believe the girl was over 13 years old.
The appellant argued before the Northern Ireland Court of Appeal that section 4 was silent as to such a defence but in view of the legislative history and its seriousness, it must be presumed that there is a mental element to the offence.
The appellant relied on the general presumption that criminal offences require the prosecution to prove mens rea i.e. some intent on the part of the accused, unless explicitly excluded by the language of the statute or necessarily inferred from the language of the offence.
Such a presumption is hard to displace, especially in relation to serious offences.
The Court of Appeal rejected the appellants arguments and held that no defence of reasonable or honest belief existed.
All that was necessary was for the prosecution to prove the accused had had sex with a girl who was actually under the age of 14.
The appellant thus appealed to the Supreme Court.
The Supreme Court unanimously dismisses the appeal.
Lord Kerr gives the judgment of the court.
A clearly discernible historical trend of increasing the age at which liability for more serious offences is incurred, while reducing the sentence imposed, can be detected [3].
Section 4 as originally enacted referred to unlawful carnal knowledge of a girl under 13 years old.
This was amended to 14 years by the Children and Young Persons (Northern Ireland) Act 1950 (the 1950 Act).
Section 5 of the 1885 Act created the same offence in relation to a girl between the ages of 13 15.
Section 5 and section 6 (permitting defilement on premises) contained provisos that it would be a defence to show that the accused reasonably believed the girl was of or above the age of 16 years.
Such defences were abolished by section 2 of the Criminal Law (Northern Ireland) Amendment Act 1923, as amended by section 140 of the 1950 Act.
Section 5 thus referred to any girl under 17 years old, with an express prohibition of any defence of reasonable belief that she was 17 or older.
No such type of defence has ever been explicitly provided in any version of section 4 [7 13].
The constitutional principle that mens rea is presumed to be required in order to establish criminal liability is a strong one.
It is not to be displaced in the absence of clear statutory language or unmistakably necessary implication.
Where the statutory offence is grave and carries a heavy penalty or a substantial social stigma, the case is enhanced against implying that mens rea of any ingredient of the offence is not needed [26].
One must at least begin with an examination of what the legislative intention was before considering whether modification of that intention is justified by later amendments or contemporary social contexts [31].
There can really be no doubt that the section in its original form was intended to impose criminal liability for carnal knowledge of a female under the age of 14 without proof that the perpetrator knew or had reason to believe that she was below that age.
The decision in R v Prince (1875) LR 2 CCR 154 10 years prior to the 1885 Act confirmed that proof of knowledge or lack of reasonable belief in the age of the victim was not required under section 51 of the Offences Against the Person Act 1861.
This formed the crucial backdrop to the 1885 Act.
The juxtaposition of sections 5 and 6 of the 1885 Act, which originally contained a defence of reasonable belief, with section 4 make it clear that no such defence was to be provided for under the latter section [32].
It would be anomalous if the subsequent removal of the defence from sections 5 and 6 meant that it should be implied into section 4 to which it had not previously applied [34].
While the amended legislation is to be construed in its revised form, it does not follow that its antecedent history has to be entirely left out of account.
To suggest that the removal of the defence under sections 5 and 6 would have the effect of introducing it under section 4 by implication takes contrivance too far [36].
The policy approach of protecting younger females by ensuring that a defence of reasonable belief should not be available has been unswerving.
Further, there is nothing in the contemporary social context which militates against the denial of the defence of belief as to age for section 4 offences [37 38].

summary/background: The question in this appeal is whether there is a requirement for the prosecution to prove a defendant had an absence of belief that the person they were having sexual intercourse with was over the age of 13, before they can be convicted of an offence of unlawful carnal knowledge of a girl under the age of 14. The appellant, who was 17 years old at the time, had sexual intercourse with a 13 year old girl. Initially the girl informed her mother of this fact but told her the intercourse had not been consensual. The appellant was arrested. Subsequently however, the girl withdrew the allegation and admitted the sex had been consensual. As a result, the appellant was charged with the offence of having unlawful carnal knowledge of a girl under the age of 14 contrary to section 4 of the Criminal Law Amendment Acts (Northern Ireland 1885-1923) (the 1885 Act) - a serious offence that carries a maximum of life imprisonment. The appellant was represented and pleaded guilty to the charge at Belfast Crown Court in 2004. He was sentenced to 3 years detention in a Young Offenders Centre, suspended for 2 years. He had pleaded guilty on the understanding that it was no defence to a charge under section 4 for the defendant to show he believed the girl was over the age of 13. Following his conviction the appellant received advice from different solicitors and launched an appeal, arguing that the Crown was indeed required to prove that the appellant did not believe the girl was over 13 years old. The appellant argued before the Northern Ireland Court of Appeal that section 4 was silent as to such a defence but in view of the legislative history and its seriousness, it must be presumed that there is a mental element to the offence. The appellant relied on the general presumption that criminal offences require the prosecution to prove mens rea i.e. some intent on the part of the accused, unless explicitly excluded by the language of the statute or necessarily inferred from the language of the offence. Such a presumption is hard to displace, especially in relation to serious offences. The Court of Appeal rejected the appellants arguments and held that no defence of reasonable or honest belief existed. All that was necessary was for the prosecution to prove the accused had had sex with a girl who was actually under the age of 14. The appellant thus appealed to the Supreme Court.

summary/reasons: A clearly discernible historical trend of increasing the age at which liability for more serious offences is incurred, while reducing the sentence imposed, can be detected [3]. Section 4 as originally enacted referred to unlawful carnal knowledge of a girl under 13 years old. This was amended to 14 years by the Children and Young Persons (Northern Ireland) Act 1950 (the 1950 Act). Section 5 of the 1885 Act created the same offence in relation to a girl between the ages of 13-15. Section 5 and section 6 (permitting defilement on premises) contained provisos that it would be a defence to show that the accused reasonably believed the girl was of or above the age of 16 years. Such defences were abolished by section 2 of the Criminal Law (Northern Ireland) Amendment Act 1923, as amended by section 140 of the 1950 Act. Section 5 thus referred to any girl under 17 years old, with an express prohibition of any defence of reasonable belief that she was 17 or older. No such type of defence has ever been explicitly provided in any version of section 4 [7-13]. The constitutional principle that mens rea is presumed to be required in order to establish criminal liability is a strong one. It is not to be displaced in the absence of clear statutory language or unmistakably necessary implication. Where the statutory offence is grave and carries a heavy penalty or a substantial social stigma, the case is enhanced against implying that mens rea of any ingredient of the offence is not needed [26]. One must at least begin with an examination of what the legislative intention was before considering whether modification of that intention is justified by later amendments or contemporary social contexts [31]. There can really be no doubt that the section in its original form was intended to impose criminal liability for carnal knowledge of a female under the age of 14 without proof that the perpetrator knew or had reason to believe that she was below that age. The decision in R v Prince (1875) LR 2 CCR 154 10 years prior to the 1885 Act confirmed that proof of knowledge or lack of reasonable belief in the age of the victim was not required under section 51 of the Offences Against the Person Act 1861. This formed the crucial backdrop to the 1885 Act. The juxtaposition of sections 5 and 6 of the 1885 Act, which originally contained a defence of reasonable belief, with section 4 make it clear that no such defence was to be provided for under the latter section [32]. It would be anomalous if the subsequent removal of the defence from sections 5 and 6 meant that it should be implied into section 4 to which it had not previously applied [34]. While the amended legislation is to be construed in its revised form, it does not follow that its antecedent history has to be entirely left out of account. To suggest that the removal of the defence under sections 5 and 6 would have the effect of introducing it under section 4 by implication takes contrivance too far [36]. The policy approach of protecting younger females by ensuring that a defence of reasonable belief should not be available has been unswerving. Further, there is nothing in the contemporary social context which militates against the denial of the defence of belief as to age for section 4 offences [37- 38].


judgement:
The issue on this appeal is whether and if so in what circumstances the Financial Services Authority (FSA) should, as a condition of obtaining a freezing injunction under section 380(3) of the Financial Services and Markets Act 2000 (FSMA) and/or section 37(1) of the Senior Courts Act 1981 (SCA), be required to give to the court a cross undertaking in damages in favour of third parties affected by the injunction.
The answer I would give is that there is no general rule that an authority like the FSA acting pursuant to a public duty should be required to give such an undertaking, and that there are no particular circumstances why it should be required to do so in the present case.
The issue has been argued as a matter of principle between the FSA and Barclays Bank plc (Barclays), a potentially affected third party.
However, a brief statement of the background is appropriate.
On 20th December 2010 proceedings were commenced by the FSA against three defendants (Sinaloa Gold plc, a person or persons trading as PH Capital Invest and a Mr Glen Lawrence Hoover) on the basis that (a) Sinaloa was promoting the sales of shares without being authorised to do so and without an approved prospectus, contrary to FSMA sections 21 and 85, (b) PH Capital Invest and Mr Hoover were knowingly engaged in this activity, and (c) PH Capital Invest was as an unauthorised person carrying on regulated activities in breach of FSMA section 19 in various other respects.
which Mr Hoover was the sole authorised signatory.
Before issuing these proceedings, the FSA had on 17th December 2010 obtained without notice an injunction freezing the defendants assets under sections 380(3) FSMA and/or 37(1) SCA.
Barclays were notified of the order on 20th December 2010, and the injunction was continued by David Richards J at a hearing on notice on 31st December 2010.
Sinaloa Gold plc had six bank accounts at Barclays, in respect of all of
As originally issued, Schedule B to the injunction, headed Undertakings given to the Court by the Applicant, read: (1) The Applicant does not offer a cross undertaking in damages. (4) The Applicant will pay the reasonable costs of anyone other than the Respondents which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent's assets and if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make. (italics added) By the time the injunction was continued, the possible inconsistency between paragraphs (1) and (4) was observed, and the FSA was required to agree to add at the end of paragraph (1) the phrase save to the extent provided in paragraph (4) below, without prejudice to its right to apply to vary paragraph (4).
On 12th January 2011 the FSA applied to have the words which I have italicised in paragraph (4) removed.
Barclays intervened to oppose the application, which was refused by HHJ David Hodge QC on 25th January 2011 [2011] EWHC 144(Ch).
On 18th October 2011 the Court of Appeal reversed his decision and ordered a cross undertaking in the terms of paragraph (4) without the italicised words [2012] Bus LR 753.
The effect was to preserve the undertaking in respect of costs incurred by third parties (which the FSA did not dispute), but to eliminate any requirement that the FSA give an undertaking in respect of losses incurred by third parties.
Barclays now appeals by permission of this Court.
The FSA and FSMA
The FSA is governed by FSMA.
Schedule 1 to FSMA makes provision about its status, including an exemption from liability in damages (paragraph 12 below).
The FSA was given general functions which in discharging it must, so far as is reasonably possible, act in a way which is compatible with defined regulatory objectives and which it considers most appropriate for the purpose of meeting those objectives: FSMA, section 2(1) and (4).
Its general functions include making rules, preparing and issuing codes, giving general guidance and determining general policy and principles by reference to which to perform particular functions.
The regulatory objectives include maintaining market confidence in the UK financial system (section 3), protecting and enhancing the stability of the UK financial system (section 3A, as inserted by section 1(3) of the Financial Services Act 2010), securing the appropriate degree of protection for consumers (section 5) and reducing the extent to which it is possible for a business carried on by a regulated person or in contravention of the general prohibition to be used for a purpose connected with financial crime (section 6).
Section 19 in Part II of FSMA prohibits any person from carrying on, or
purporting to carry on, a regulated activity in the UK unless authorised (under sections 40 to 43 in Part IV) or exempt.
This is the general prohibition, for contravention of which penalties are set by section 23.
Section 21 contains specific restrictions on financial promotion, including communicating an invitation or inducement to engage in investment activity in the course of business, with penalties for contravention being set by section 25.
Section 85 prohibits dealing in transferable securities without an approved prospectus.
Section 380(3) provides that, if, on the application of the FSA or the Secretary of State, the court is satisfied that any person may have contravened, or been knowingly concerned in the contravention of, a relevant requirement it may make an order restraining him from disposing of, or otherwise dealing with, any assets of his which it is satisfied he is reasonably likely to dispose of or otherwise deal with.
A relevant requirement includes a requirement which is imposed by or under this Act (section 380(6)(a)) and so includes the requirement under section 19 to be authorised or exempt before carrying on a regulated activity.
Under Part IV of FSMA, permission may be given subject to such requirements as the FSA thinks appropriate (section 43), which may include an assets requirement prohibiting the disposal of, or other dealing with, any of the permitted persons (As) assets or their transfer to a trustee approved by the FSA (section 48(3)).
Under section 45(4), the FSA may on its own initiative vary a previously included Part IV permission to include an assets requirement.
Under section 48(4) and (5), if the FSA imposes an assets requirement and gives notice to any institution with which a person (A) keeps an account, the notice has the effect that (a) the institution does not act in breach of any contract with A in refusing any instruction from A in the reasonably held belief that complying would be incompatible with the requirement and (b) if the institution complies with the instruction, it is liable to pay to the FSA an amount equal to that transferred from or paid out of As account.
In relation to authorised persons, the FSA thus enjoys a right to impose a freezing order without going to court and without any occasion arising on which a cross undertaking could be required of it.
The FSA also enjoys an exemption from liability in damages, set out in paragraph 19 of Schedule 1 to FSMA: (1) Neither the Authority nor any person who is, or is acting as, a member, officer or member of staff of the Authority is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the Authority's functions. (2) Neither the investigator appointed under paragraph 7 nor a person appointed to conduct an investigation on his behalf under paragraph 8(8) is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of his functions in relation to the investigation of a complaint. (3) Neither sub paragraph (1) nor sub paragraph (2) applies (a) if the act or omission is shown to have been in bad faith; or (b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.
Paragraph 19(1) of Schedule 1 would protect the FSA, if it was, for example, the subject of a claim by A on whom it had imposed an assets requirement under section 45(4), by an institution to which it had notified the imposition of such a requirement under sections 48(4) and (5) or by any other third person.
Paragraphs 7 and 8 of Schedule 1 require the FSA to establish a scheme for the independent investigation of complaints against it (other than complaints more appropriately dealt with in another way, e.g. by referral to the Upper Tribunal under the appeals procedure contained in Part IX of FSMA or by the institution of other legal proceedings), and the issue and, where appropriate, publication of reports on such complaints.
The present issue
The issue now before the Supreme Court raises for consideration: (a) whether and how far the position of the FSA, seeking an interim injunction pursuant to its public law function and duty, is to be equated with that of a person seeking such an injunction in pursuance of private interests; (b) whether and how far the position regarding the giving of any cross undertaking differs according to whether it is to protect a defendant or a third party; and (c) whether there is any coherent distinction between cross undertakings in respect of third party losses and costs.
Taking the first point, I propose to start with the requirements which apply when a claimant is pursuing private interests.
Since the first half of the 19th century such claimants have when seeking an interim injunction been required to give the usual undertaking.
That means an undertaking to abide by any order this Court may make as to damages in case the Court shall hereafter be of opinion that the Defendants . shall have sustained any by reason of this order which the [claimant] ought to pay: see e.g. Tucker v New Brunswick Trading Company of London (1890) 44 Ch D 249, 251.
The practice regarding defendants is reflected in CPR 1998, Practice Direction (PD) 25A 5.1(1), requiring, unless the court orders otherwise, an undertaking to pay any damages which the respondent sustains which the court considers the applicant should pay.
But modern practice, reflected in PD 25A 5.1A, also provides that, when the court orders an injunction it should consider whether to require an undertaking by the applicant to pay any damages sustained by a person other than the respondent, including another party to the proceedings or any other person who may suffer loss as a consequence of the order.
Asset freezing (formerly Mareva) injunctions were developed by the courts in the late 1970s and 1980s.
Because of their particular, potentially stringent effects, they are separately regulated in the rules.
PD 25A 6 annexes a sample wording which may be modified in any particular case.
In addition to an undertaking in the usual form in favour of the defendant, it includes an undertaking in favour of third persons in identical form to paragraph (4) of that originally required in this case (paragraph 6 above).
The history of the undertaking in favour of third persons can be traced back to a statement by Lord Denning MR in Prince Abdul Rahman Bin Turki Al Sudairy v Abu Taha [1980] 1 WLR 1268, 1273 and to decisions by Robert Goff J in Searose Ltd v Seatrain UK Ltd [1981] 1 WLR 894 and Clipper Maritime Co Ltd of Monrovia v Mineralimportexport [1981] 1 WLR 1262.
In Searose, Robert Goff J, building on Lord Dennings statement, held that, where a bank had to incur costs in identifying whether a bank account existed within the terms of a Mareva injunction, it should be entitled to an undertaking to cover its reasonable costs, before it incurred them.
In Clipper Maritime the freezing injunction obtained by the claimants covered cargo or bunkers belonging to the defendants Mineralimportexport on board a vessel which was on time charter to Mineralimportexport and which was in the port of Barry.
Its effect might have been to inhibit the port authority in its use of the port and to cause it loss of income.
An undertaking was required to cover any actual income lost to the port authority.
In the later case of Galaxia Maritime SA v Mineralimportexport [1982] 1 WLR 539, the defendants were again Mineralimportexport and a freezing injunction was initially granted to prevent them from removing from the jurisdiction (just before Christmas) a cargo on a third partys vessel which was only on voyage charter to Mineralimportexport.
The Court of Appeal categorically refused to continue the interim injunction on any terms, since it could effectively block the third partys vessel indefinitely.
Under the standard forms of injunction currently in use for both ordinary interim injunctions and freezing injunctions, the enforcement of the undertaking is expressed to be in the courts discretion.
There is little authority in this area.
Neill LJ undertook a useful review of the general principles in Cheltenham and Gloucester Building Society v Ricketts [1993] 1 WLR 1545, 1551D 1552D.
The position regarding undertakings in favour of defendants has been more recently reviewed in Commercial Injunctions, by Steven Gee QC, 5th ed (2004 and First Supplement), paragraphs 11.017 11.032, while the authorities on undertakings in favour of third parties are covered in paragraphs 11.008 11.012.
An inquiry into damages will ordinarily be ordered where a freezing injunction is shown to have been wrongly granted, even though the claimant was not at fault: paragraph 11.023.
But, depending on the circumstances, it may be appropriate for the court to await the final outcome of the trial before deciding whether to enforce: see the Cheltenham and Gloucester case, p.1552B.
However, Professor Adrian Zuckerman has pointed out (The Undertaking in Damages Substantive and Procedural Dimensions [1994] CLJ 546, 562) that it does not follow from a defendants success on liability that he did not in fact remove (or seek to remove) assets from the reach of the claimant, justifying an interim freezing order.
The court retains a discretion not to enforce the undertaking if the defendants conduct makes it inequitable to enforce: F Hoffmann La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295, 361E, per Lord Diplock.
It seems likely that compensation is assessed on a similar basis to that upon which damages are awarded for breach of contract: Cheltenham and Gloucester, p.1552C D, per Neill LJ.
The position regarding third persons is necessarily different in certain respects.
The purpose of the cross undertaking is to protect them so long at least as they are innocent third persons not implicated in the alleged wrongdoing or conduct justifying the freezing order whether or not the freezing order was justified as against the defendant.
That purpose goes back to the orders first made in the Searose and Clipper Maritime cases.
I turn to the position of an authority acting in pursuit of public functions.
The leading authority is the Hoffmann La Roche case.
Following a report by the Monopolies Commission the Department of Trade and Industry made an order under the relevant monopolies legislation: the Regulation of Prices (Tranquilising Drugs) (no. 3) Order 1973 (SI 1973 No 720), setting maximum prices for certain drugs.
Hoffmann La Roche issued proceedings claiming that the Monopolies Commission report had been unfair and contrary to natural justice and was invalid, and that the Regulations based upon it were likewise ultra vires and invalid.
The Department issued proceedings, and sought an injunction to restrain Hoffmann La Roche from charging prices in excess of the Order prices under a provision in the primary legislation (section 11 of the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948) which provided that compliance with any such order shall be enforceable by civil proceedings by the Crown for an injunction or for any other appropriate relief.
The issue argued was whether the Department should be required to give a cross undertaking in damages in order to obtain the order.
The House recognised the general rule requiring a cross undertaking as a condition of the grant of an interim injunction in ordinary litigation: see e.g. per Lord Reid at p 341B.
It recognised that, since the Crown Proceedings Act 1947, there was no continuing justification for the former blanket practice whereby the Crown was not required to give any such undertaking in any circumstances (even in cases where it was asserting proprietary or contractual rights which a private person could have and enforce): per Lord Reid at p 341C and Lord Diplock at p 362B H.
But it considered, by a majority, that the Crown remains in a position different from that of any private individual when it brings what Lord Diplock described as a law enforcement action: p 363B.
The majority did not express itself with one voice regarding the implications of this distinction.
Lord Reid thought special circumstances or special reason to be required before the Crown should have to expose itself by cross undertaking: p 341E and G. Lord Cross of Chelsea however accepted that it might be fair to require that the Crown give a cross undertaking where the defendants defence was that what he is doing or proposing to do was not prohibited by the order in question, but that, where as here the defence was that what was on the face of it the law of the land was not in fact the law, exceptional circumstances would be required before the court should countenance the possibility that the Crown might be deterred from applying for an interim injunction by the need to give a cross undertaking: p 371D G. Lord Morris of Borth y Gest also focused on the apparent unlawfulness of the sales in excess of the order prices which Hoffmann La Roche was threatening.
Lord Diplock saw no reason, since the Crown Proceedings Act, for a rigid rule that the Crown itself should never be required to give the usual undertaking in damages in a law enforcement action, but equally no basis for the converse proposition that the court . ought always to require an undertaking: p 364C D: this was because (p 364E): When . a statute provides that compliance with its provisions shall be enforceable by civil proceedings by the Crown for an injunction, and particularly if this is the only method of enforcement for which it provides, the Crown does owe a duty to the public at large to initiate proceedings to secure that the law is not flouted .
Lord Diplock continued (p 364F G): I agree therefore with all your Lordships that the practice of exacting an undertaking in damages from the Crown as a condition of the grant of an interlocutory injunction in this type of law enforcement action ought not to be applied as a matter of course, as it should be in actions between subject and subject, in relator actions, and in actions by the Crown to enforce or to protect its proprietary or contractual rights.
On the contrary, the propriety of requiring such an undertaking from the Crown should be considered in the light of the particular circumstances of the case.
In concluding that no cross undertaking should be required, Lord Diplock repeated that the Crown was seeking to enforce the law by the only means available under the governing statute, and he, like Lord Morris and Lord Cross, stressed that Hoffmann La Roche was threatening to breach an apparently valid order approved by each House of Parliament: pp 364H 365B.
On this basis, he also said (p 367A C): So in this type of law enforcement action if the only defence is an attack on the validity of the statutory instrument sought to be enforced the ordinary position of the parties as respects the grant of interim injunctions is reversed.
The duty of the Crown to see that the law declared by the statutory instrument is obeyed is not suspended by the commencement of proceedings in which the validity of the instrument is challenged.
Prima facie the Crown is entitled as of right to an interim injunction to enforce obedience to it.
To displace this right or to fetter it by the imposition of conditions it is for the defendant to show a strong prima facie case that the statutory instrument is ultra vires.
However, he went on (p 367C D): Even where a strong prima facie case of invalidity has been shown upon the application for an interim injunction it may still be inappropriate for the court to impose as a condition of the grant of the injunction a requirement that the Crown should enter into the usual undertaking as to damages.
For if the undertaking falls to be implemented, the cost of implementing it will be met from public funds raised by taxation and the interests of members of the public who are not parties to the action may be affected by it.
Lord Wilberforce, dissenting in Hoffmann La Roche, was unenthusiastic about English laws unwillingness to accept that a subject should be indemnified for loss sustained by invalid administrative action (p 359A), but rested his dissent ultimately on the fact that, without a cross undertaking, the Crown in Hoffmann La Roche would be put in a position where, if it ultimately lost the action, the injunction would have enabled it (through the National Health Service) to profit during the period while the injunction precluded Hoffmann La Roche from selling to the National Health Service at market, rather than order prices.
Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227 was another case concerned with a claim to enforce apparently valid legislation, this time by a local authority and relating to Sunday trading.
Lord Goff of Chieveley at p 274C D read the speeches in Hoffmann La Roche as dismantling an old Crown privilege and substituting for it a principle upon which, in certain limited circumstances, the court has a discretion whether or not to require an undertaking in damages from the Crown as law enforcer.
In extending the principle to all public authorities, he said (p 274D E): The principle appears to be related not to the Crown as such but to [T]he the Crown when performing a particular function. considerations which persuaded this House to hold that there was a discretion whether or not to require an undertaking in damages from the Crown in a law enforcement action are equally applicable to cases in which some other public authority is charged with the enforcement of the law: see e.g. Lord Reid, at p. 341G, Lord Morris of Borth y Gest, at p. 352C, and Lord Cross of Chelsea, at p. 371B G.
In In re Highfield Commodities Ltd [1985] 1 WLR 149 Sir Robert Megarry V C interpreted Hoffmann La Roche as deciding that no cross undertaking should be required of the Crown unless the defendant showed special circumstances justifying the requirement.
In Attorney General v Wright [1988] 1 WLR 164 Hoffmann J regarded as undeniable (even if, to some eyes, not particularly attractive) the potency of the principle that Crown officials should not be inhibited from performing their duty to take action to enforce the law by the fear that public funds may be exposed to claims for compensation by people who have thereby caused [sic] loss (p 166C D).
On the facts, however, he required an undertaking to be given by the receiver of, and to be met out of the funds of, the charity for whose benefit the Attorney General was suing to recover property.
Although the Attorney General was not suing to protect any proprietary or contractual right of the Crown, he was suing in the proprietary interests of the charity, which could be expected to give an undertaking.
In Director General of Fair Trading v Tobyward Ltd [1989] 1 WLR 517, Hoffmann J said that, whatever one might say about the policy, it is well established that the usual practice is that no cross undertaking is required when the Crown is seeking an interim injunction to enforce the law (p 524E H).
In Securities and Investments Board v Lloyd Wright [1993] 4 All ER 210, Morritt J addressed the issues on the basis of defence counsels concession that it would not be appropriate that there should be a cross undertaking of damages in a law enforcement action (p 213H J), and in Customs and Excise Commissioners v Anchor Foods Ltd [1999] 1 WLR 1139 at p 1152C D, Neuberger J said that it would ordinarily not be right to require a cross undertaking in damages from Customs, but ordered one because of the unusual facts of this case, in which Customs was, to protect its right to VAT, seeking to halt a sale of business at an independent valuation to a new company.
Finally, the Court of Appeal in United States Securities and Exchange Commission v Manterfield [2009] EWCA Civ 27, [2009] Lloyds Rep FC 203 applied the line of authority including Kirklees, In re Highfield and Lloyd Wright when endorsing the exercise of the judges discretion to dispense with the giving of a cross undertaking by the United States Securities and Exchange Commission.
The Commission was seeking a freezing order in aid of Massachusetts proceedings brought in the interest of investors generally to recover assets obtained by Manterfield in the course of a fraudulent investment scheme involving the sale of limited partnership interests in an unregistered fund.
Presenting the present appeal for Barclays, Mr Richard Handyside QC did not mount a direct attack on Hoffmann La Roche itself.
Rather he submitted that it was distinguishable because it concerned enforcement of an apparently valid executive order in relation to which the only defence was that the order was invalid, and that the later authorities referred to in the preceding paragraph had read it too broadly.
Mr Handyside did however also refer to Professor Zuckermanns article, which was avowedly critical of the decision in Hoffmann Roche.
Professor Zuckermanns reasons included Lord Wilberforces, and he also argued that a cross undertaking can encourage greater care before interfering with a citizens liberty.
He questioned the weight placed in Hoffmann La Roche on the presumption of validity of the relevant law.
Mr Handyside submits that the same criticism applies, a fortiori, to the weight placed by Hoffmann J on the apparent strength of the complaint of misleading advertising on which the injunction was based in Tobyward.
There is considerable general force in this particular criticism of Hoffmann La Roche.
The purpose of a cross undertaking in favour of a defendant is to cover the possibility of loss in the event that the grant of an injunction proves to have been inappropriate.
To refuse to require a cross undertaking because it appears, however strongly, unlikely ever to be capable of being invoked misses the point.
The remoteness of the possibility of loss might indeed be thought to be a reason why the public authority would be unlikely to be inhibited from seeking injunctive relief by fear that public funds may be exposed to claims for compensation.
I note that, although Lord Diplock attached some significance to the strength of the Crowns case in Hoffmann La Roche, he did not confine his comments on the difference between private litigation and law enforcement action to cases where the Crowns case was founded on apparently well founded legislation; on the contrary: see paragraph 24 above.
In any event, however, this particular criticism does not impinge on the general distinction drawn in Hoffmann La Roche and subsequent cases between private litigation and public law enforcement action.
In private litigation, a claimant acts in its own interests and has a choice whether to commit its assets and energies to doing so.
If it seeks interim relief which may, if unjustified, cause loss or expense to the defendant, it is usually fair to require the claimant to be ready to accept responsibility for the loss or expense.
Particularly in the commercial context in which freezing orders commonly originate, a claimant should be prepared to back its own interests with its own assets against the event that it obtains unjustifiably an injunction which harms anothers interests.
Different considerations arise in relation to law enforcement action, where a public authority is seeking to enforce the law in the interests of the public generally, often in pursuance of a public duty to do so, and enjoys only the resources which have been assigned to it for its functions.
Other than in cases of misfeasance in public office, which require malice, and cases of breach of the Convention rights within section 6(1) of the Human Rights Act 1998, it remains the case that English law does not confer a general remedy for loss suffered by administrative law action.
That is so, even though it involves breach of a public law duty.
In the present context, the fact that an injunction is discharged, or that the court concludes after hearing extended argument that it ought not in the first place to have been granted, by no means signifies that there was any breach of duty on the public authoritys part in seeking it.
As I have said, Mr Handyside does not take issue with this general distinction, and the appeal has been argued accordingly.
Mr Handyside does, however, take issue with the way in which Hoffmann La Roche has been interpreted as indicating that public authority claims to interim injunctions should be approached.
Hoffmann la Roche has been understood at first instance as involving a usual or normal rule that a cross undertaking will not be required from the Crown.
Mr Handyside submits that this understanding goes further than justified.
In Hoffmann La Roche, only Lord Reid spoke of a general rule according to which special circumstances or reason must exist before a cross undertaking should be required from the Crown.
Lord Morris was silent.
But Lord Diplock said that the practice of exacting an undertaking ought not to be applied as a matter of course and should, on the contrary. be considered in the light of the particular circumstances of the case.
This was a more neutral formulation, but still indicates a need to identify particular circumstances before a cross undertaking is required.
Lord Morris and Lord Cross focused on the particular circumstance that the only defence involved a challenge to the validity of an apparently valid order.
However, I do not regard that as a satisfactory demarcation of any distinction between public and private claims: paragraph 29 above.
For reasons indicated in paragraph 31 above, there is in my view a more general distinction between public and private claims.
Ultimately, there is a choice.
Either the risk that public authorities might be deterred or burdened in the pursuit of claims in the public interest is accepted as a material consideration, or authorities acting in the public interest must be expected generally to back their legal actions with the public funds with which they are entrusted to undertake their functions.
That latter approach could not be adopted without departing from Hoffmann La Roche, and Hoffmann La Roche draws a distinction between public and private claims which depends upon accepting the former approach.
Hoffmann La Roche stands at least for the proposition that public authority claims brought in the public interest require separate consideration.
Consistently with the speeches of Lord Reid and Lord Diplock (and probably also of Lord Cross), it indicates that no cross undertaking should be exacted as a matter of course, or without considering what is fair in the particular circumstances of the particular case.
A starting point along these lines does not appear to me to differ significantly from the practice subsequently adopted at first instance: see paragraph 27 above.
I accept its general appropriateness.
Mr Handyside further submitted that, in whatever sense Hoffmann La Roche is understood, it concerned only the protection of defendants.
The present appeal concerns the protection of third persons, who, unless the contrary is shown, are to be taken as having no involvement in the breach of the law alleged against the defendants.
The present appeal certainly proceeds on the basis that Barclays had no such involvement.
However, the distinction which Mr Handyside suggests does not in my opinion hold good.
Speaking generally, a cross undertaking in relation to a defendant protects against the event that no injunction should have been granted, either when it was granted or in the light of the defendants ultimate success at trial.
While it is possible to conceive of a case in which an injunction was wrongly granted on the material then available, but the defendant is at trial found to have breached the law, it is unlikely that the cross undertaking would then be enforced.
A cross undertaking in relation to third persons protects against the event that an innocent third person, without involvement in whatever breach of the law is alleged against the defendant, suffers loss or expense through the grant of the injunction, whether this should or should not have occurred.
In either case, therefore, it is loss caused by the grant of an injunction in circumstances where the person incurring the loss is essentially innocent that is covered by the cross undertaking.
Finally, Mr Handyside submits that no sensible distinction can exist between a cross undertaking in respect of costs, which the FSA has accepted that Barclays should receive (paragraphs 6 and 7 above), and the cross undertaking in damages, which is at issue on this appeal.
The FSA has, he submits, in effect, undermined its own case by conceding the former.
This is not convincing.
First, the appeal raises an issue of general principle, which cannot be resolved by a concession in a particular case.
Second, there is to my mind a pragmatic basis for a distinction between specific costs and general loss.
The rationale of Hoffmann La Roche, that public authorities should be able to enforce the law without being inhibited by the fear of cross claims and of exposing financially the resources allocated by the state for their functions, apply with particular force to any open ended cross undertaking in respect of third party loss.
It does not apply in the same way to a cross undertaking in respect of third party expense.
Even in a private law context, this distinction may sometimes be relevant to bear in mind.
So Neuberger J thought in Miller Brewing Co v Mersey Docks & Harbour Co [2004] FSR 5, 81 paragraphs 44 45 (paragraphs not touched by criticism levelled at the actual decision in Mr Gees work on Commercial Injunctions, paragraph 11.015, into which it is unnecessary to go).
The present case
The present case resembles Hoffmann La Roche, Kirklees, Tobyward and Lloyd Wright.
It is a case of a public authority seeking to enforce the law by the only means available under the governing statute.
The FSA was acting under its express power to seek injunctive relief conferred by section 380(3).
It was acting in fulfilment of its public duties in sections 3 to 6 of FSMA to protect the interests of the UKs financial system, to protect consumers and to reduce the extent to which it was possible for a business being carried on in contravention of the general prohibition being used for a purpose connected with financial crime.
I therefore approach this appeal on the basis that there is no general rule that the FSA should be required to give a cross undertaking, in respect of loss suffered either by the defendants or by third parties.
It is necessary to consider the circumstances to determine whether a cross undertaking should be required in this particular case.
The circumstances include some further background considerations.
First, there is no general duty in English public law to indemnify those affected by action undertaken under legislative authority.
Innocent third parties may be affected in situations ranging from the Victorian example of trains run on an authorised railway line (Hammersmith and City Railway Company v Brand (1869) LR 4 HL 171) to the erection of a barrier on a pavement (Dormer v Newcastle upon Tyne Corp [1940] 2 KB 204) to police closure of a street following an incident.
Secondly, if one focuses attention on acts for which fault might be alleged to attach to the FSA, the FSA will be liable in the unlikely event of a misfeasance in public office or in the event that its conduct amounts to a breach of the Human Rights Act Convention rights.
But there is no basis in FSMA for treating the FSA as having a wider statutory or common law responsibility even to innocent third parties.
Thus, thirdly, if the FSA were to fail to take appropriate steps to shut down unlawfully conducted activity, innocent third persons might suffer loss, but they could have no claim against the FSA.
Fourthly, even in a case of positive action taken by the FSA affecting innocent third persons, the general protective duties and objectives of FSMA could not involve under FSMA or at common law any assumption of responsibility towards or any liability for breach of a duty of care enforceable at the instance of third persons: see e.g. Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057, Jain v Trent Strategic Health Authority [2009] UKHL 4, [2009] 1 AC 853 and Customs and Excise Commissioners v Barclays Bank plc [2006] UKHL 28, [2007] 1 AC 181.
Paragraph 19 of Schedule 1 to FSMA in any event provides expressly that they do not.
The present appeal concerns the fourth situation, in that the FSA was taking positive action to shut down what it alleged to be unlawful activity.
An interim injunction obtained in such a situation may cause innocent third persons loss.
They clearly could not complain about loss arising from an unlawful scheme being closed down.
But, if the scheme proved after all to be lawful, they might be seen to have sustained loss which they should not in a perfect world have suffered.
However, the FSA has powers under Part IV of FSMA allowing it without any application to the court to freeze the assets of an authorised person, in a way which could equally cause loss to innocent third persons.
If the exercise of a Part IV freezing power should subsequently transpire to have been inappropriate, no basis exists upon which such third persons could claim to be indemnified in respect of such loss.
Indeed paragraph 19 of Schedule 1 to FSMA would again clearly exclude the FSA from any risk of liability: see paragraph 12 above.
There would be an apparent imbalance, if the FSA were required to accept potential liability under a cross undertaking when it addresses the activities of unauthorised persons and has therefore to seek the courts endorsement of its stance in order for a freezing order to issue.
The Respondent sought also to gain assistance from paragraph 19 of Schedule 1 to FSMA.
A cross undertaking is colloquially described as being in damages, and liability under it is measured on ordinary damages principles.
But it is clear that it does not involve a liability for damages in a conventional legal sense.
The cross undertaking is to the court.
Liability under it, when the court in its discretion determines that the cross undertaking should be enforced, is in a sum assessed by the court, albeit using similar principles to those by which it measures damages.
Accordingly, it is common ground that paragraph 19 cannot directly apply to prevent the FSA from being required to give, or from enforcement of, a cross undertaking.
On the other hand, as the Court was told without contradiction, the enactment of paragraph 19 was not based and did not follow upon any consideration of the possibility that the FSA might be required to give a cross undertaking before being granted an injunction under section 380(3).
That possibility was, so far as appears, not in the legislators mind, one way or the other.
In Lloyd Wright (paragraph 27 above), Morritt J considered in a context paralleling the present a predecessor to paragraph 19 which existed in the form of section 187(3) of the Financial Services Act 1986.
He rejected a submission of the Securities and Investment Board that this prevented the court from requiring a cross undertaking.
But he went on (p 214h): Rather, it seems to me to be a clear pointer in the exercise of the discretion, which the court undoubtedly has, to indicate that no such cross undertaking should be required where the designated agency is, in fact, seeking to discharge functions exercisable pursuant to a delegation under the 1986 Act.
It seems to me that that is a matter which, in the exercise of my discretion, I should take into account in concluding that no cross undertaking should be required.
It is unnecessary on this appeal to express any view on the correctness of treating paragraph 19 as a clear pointer in a context where that paragraph cannot ex hypothesi apply.
In the light of the factors identified in paragraphs 36 to 38, there is on any view no reason to move away from the starting position, which is that the FSA should not have to give any cross undertaking in order to obtain an injunction under section 380(3).
HHJ Hodge QC considered that such a cross undertaking in favour of innocent third parties should be required as a matter of course, from the moment when any freezing order was first granted on an ex parte basis (para 66).
The Court of Appeal was in my view right to disagree and substituted for the undertaking as originally given an undertaking in the limited form (i.e. excluding the italicised words) indicated in paragraphs 6 and 7 above.
I would therefore dismiss this appeal.
Further observations
A further word is appropriate regarding the positions at the initial stage, where injunctive relief is sought on an ex parte (or without notice) basis, and at the later stage, when the matter comes before the court on notice to both parties as well perhaps as to third persons, such as Barclays.
Normally, there would only be a very short period before an on notice hearing could occur, and normally one would expect any third person affected by an injunction to become aware of this risk, even if not given formal notice of the injunction by the FSA.
Loss could in theory be sustained by either a defendant or a third person in that short period.
But any cross undertaking required as a condition of the grant of interim injunctive relief on a without notice basis would have to be in general and unqualified terms, and therefore be of the kind which could cause most concern to a regulator worried about risk and resource implications.
The present appeal concerns the position of the FSA at the without notice and on notice stages.
The starting position at each stage should in my view be that no cross undertaking should be required unless circumstances appear which justify a different position.
Any inhibition on the part of a public authority about giving an undertaking is likely to be greater, rather than less, at a without notice stage.
To require a blanket undertaking in favour of third parties at that stage would provide no incentive to third parties to come forward and identify any real concerns that they might have.
The better approach is in my view to regard the starting position, that no cross undertaking should be required, as being as applicable at the without notice stage as it is at the on notice stage.
A defendant or a third party who is or fears being adversely affected by an injunction obtained under section 380(3) can and should be expected to come forward, to explain the loss feared and to apply for any continuation of the injunction to be made conditional on such cross undertaking, if any, as the court may conclude should in all fairness be required to meet this situation.
Finally, whenever the court is considering whether to order an interim injunction without any cross undertaking, it should bear in mind that this will mean that the defendant or an innocent third party may as a result suffer loss which will be uncompensated, even though the injunction later proves to have been unjustified.
This consideration was rightly identified by Neuberger J in Miller Brewing at paragraph 40.
Conclusion
For the reasons given in paragraphs 1 to 41, I would dismiss this appeal.

summary/full:
On 20 December 2010, the Financial Services Authority (FSA), acting in pursuance of its public duties under sections 3 to 6 of the Financial Services and Markets Act 2000 (FSMA), made a without notice application for a freezing injunction against Sinaloa Gold and PH Capital Invest under section 380(3) of FSMA.
The FSA alleged that both companies were involved in promoting the sale of shares in Sinaloa without proper authorisation and an approved prospectus and that PH Capital Invest had breached FSMA in various other respects.
Schedule B to the injunction stated that the FSA gave no cross undertaking in damages.
However, under Schedule B, the FSA undertook to cover both costs and losses incurred by third parties as a result of the injunction.
The undertaking in respect of third party losses was inadvertent and the FSA applied to have it removed.
Barclays with whom Sinaloa Gold plc had six bank accounts intervened to oppose this application.
The application to have the undertaking removed was refused in the High Court.
However, this decision was reversed in the Court of Appeal.
The effect of the Court of Appeals decision was to preserve the undertaking in respect of third party costs but eliminate the undertaking in respect of third party losses.
Barclays appealed to the Supreme Court.
The Supreme Court unanimously dismisses the appeal.
There is no general rule that an authority such as the FSA, acting pursuant to a public law duty, should be required to give a cross undertaking in respect of losses incurred by third parties.
Further, there are no particular circumstances which mean that the FSA should be required to give such a cross undertaking on the facts of this case.
The judgment of the Court is given by Lord Mance.
Whilst there is no continuing justification for the former blanket practice whereby the Crown was not required to give a cross undertaking in any circumstances, a general distinction still exists between private claims and law enforcement actions [33].
In a private claim, a claimant seeking an injunction will ordinarily be expected to give a cross undertaking in damages to the defendant(s) and to third parties.
This can be justified on the basis that such a claimant should be prepared to back its own interest with its own assets against the event that it obtains the injunction unjustifiably with the result that harm is caused to the interest of another [30].
However, different considerations arise in relation to law enforcement actions, where a public authority is seeking to enforce the law in the interests of the public generally, often in pursuance of a public duty to do so, and enjoys only the resources which have been assigned to it for its functions [31].
In these circumstances public authorities cannot generally be expected to back their legal actions with the public funds with which they are entrusted for the purpose of undertaking their functions [33].
Such a requirement may inhibit public officials from fulfilling their public duties for fear of exposing public funds to claims for compensation.
The position regarding the giving of any cross undertaking cannot differ according to whether it is intended to protect a defendant or a third party [14, 34].
In both instances the cross undertaking covers the loss caused by the grant of an injunction in circumstances where the person incurring the loss is essentially innocent [34].
A pragmatic distinction can be drawn between an undertaking in respect of costs and an undertaking in damages.
Public authorities should be able to enforce the law without being inhibited by the fear of cross claims and the exposure of their resources, and this applies with particular force to any open ended undertaking in respect of third party loss.
It does not apply with the same force to a more limited cross undertaking in respect of third party costs [35].
There are no special circumstances why the FSA should be required to give a cross undertaking in respect of losses suffered by third parties on the particular facts of this case.
In a case such as the instant one, where the FSA takes positive action to shut down allegedly unlawful activity, it does not in the course of so doing assume any responsibility towards or liability for breach of a duty of care enforceable at the instance of third parties [37 38].
The FSA enjoys a further power to freeze the assets of a permitted person, without making any application to a court, under Part IV of the FSMA.
In the exercise of its powers under Part IV the FSA is excluded from any risk of liability by virtue of paragraph 19 of Schedule 1 to FSMA.
There would therefore be an apparent imbalance were the FSA required to accept potential liability in cases such as the instant one concerned with the activities of unauthorised persons [37 38].

summary/background: On 20 December 2010, the Financial Services Authority (FSA), acting in pursuance of its public duties under sections 3 to 6 of the Financial Services and Markets Act 2000 (FSMA), made a without notice application for a freezing injunction against Sinaloa Gold and PH Capital Invest under section 380(3) of FSMA. The FSA alleged that both companies were involved in promoting the sale of shares in Sinaloa without proper authorisation and an approved prospectus and that PH Capital Invest had breached FSMA in various other respects. Schedule B to the injunction stated that the FSA gave no cross-undertaking in damages. However, under Schedule B, the FSA undertook to cover both costs and losses incurred by third parties as a result of the injunction. The undertaking in respect of third party losses was inadvertent and the FSA applied to have it removed. Barclays - with whom Sinaloa Gold plc had six bank accounts - intervened to oppose this application. The application to have the undertaking removed was refused in the High Court. However, this decision was reversed in the Court of Appeal. The effect of the Court of Appeals decision was to preserve the undertaking in respect of third party costs but eliminate the undertaking in respect of third party losses. Barclays appealed to the Supreme Court.

summary/judgement: The Supreme Court unanimously dismisses the appeal. There is no general rule that an authority such as the FSA, acting pursuant to a public law duty, should be required to give a cross-undertaking in respect of losses incurred by third parties. Further, there are no particular circumstances which mean that the FSA should be required to give such a cross-undertaking on the facts of this case. The judgment of the Court is given by Lord Mance.

summary/reasons: Whilst there is no continuing justification for the former blanket practice whereby the Crown was not required to give a cross-undertaking in any circumstances, a general distinction still exists between private claims and law enforcement actions [33]. In a private claim, a claimant seeking an injunction will ordinarily be expected to give a cross- undertaking in damages to the defendant(s) and to third parties. This can be justified on the basis that such a claimant should be prepared to back its own interest with its own assets against the event that it obtains the injunction unjustifiably with the result that harm is caused to the interest of another [30]. However, different considerations arise in relation to law enforcement actions, where a public authority is seeking to enforce the law in the interests of the public generally, often in pursuance of a public duty to do so, and enjoys only the resources which have been assigned to it for its functions [31]. In these circumstances public authorities cannot generally be expected to back their legal actions with the public funds with which they are entrusted for the purpose of undertaking their functions [33]. Such a requirement may inhibit public officials from fulfilling their public duties for fear of exposing public funds to claims for compensation. The position regarding the giving of any cross-undertaking cannot differ according to whether it is intended to protect a defendant or a third party [14, 34]. In both instances the cross- undertaking covers the loss caused by the grant of an injunction in circumstances where the person incurring the loss is essentially innocent [34]. A pragmatic distinction can be drawn between an undertaking in respect of costs and an undertaking in damages. Public authorities should be able to enforce the law without being inhibited by the fear of cross-claims and the exposure of their resources, and this applies with particular force to any open-ended undertaking in respect of third party loss. It does not apply with the same force to a more limited cross-undertaking in respect of third party costs [35]. There are no special circumstances why the FSA should be required to give a cross- undertaking in respect of losses suffered by third parties on the particular facts of this case. In a case such as the instant one, where the FSA takes positive action to shut down allegedly unlawful activity, it does not in the course of so doing assume any responsibility towards or liability for breach of a duty of care enforceable at the instance of third parties [37-38]. The FSA enjoys a further power to freeze the assets of a permitted person, without making any application to a court, under Part IV of the FSMA. In the exercise of its powers under Part IV the FSA is excluded from any risk of liability by virtue of paragraph 19 of Schedule 1 to FSMA. There would therefore be an apparent imbalance were the FSA required to accept potential liability in cases such as the instant one concerned with the activities of unauthorised persons [37-38].