Marks & Spencer plc v HM Revenue and Customs [2019] UKUT 0182 (TCC), 27 June 2019

The Upper Tribunal has dismissed Marks & Spencer’s appeal against the decision of the First-tier Tribunal [2018] UKFTT 238 (TC). Marks & Spencer’s appeal concerns the correct VAT treatment of its “Dine In for Two for £10 with Free Wine” promotion. The promotion allowed a customer to choose three food dishes on payment of £10 and obtain a bottle of wine (or other non-alcoholic beverage) which was described as being provided “free”. The Upper Tribunal, upholding the First-tier Tribunal, decided that, under the promotion, the customer paid £10 in order to receive the three food items (all zero-rated) and the wine (standard rated), with the result that the £10 consideration must be allocated across all four items for VAT purposes, not just across the three food items, as Marks & Spencer contended.

Andrew Macnab represented HMRC in the First-tier Tribunal and the Upper Tribunal.

Read the full decision here.

Secretary of State for Health and others v Servier Laboratories [2019] EWCA Civ 1096

The Court of Appeal has today handed down judgment in Secretary of State for Health and others v Servier Laboratories [2019] EWCA Civ 1096. The Court dismissed Servier’s appeal against Roth J’s decision that findings of fact made by the General Court in its judgment in Servier v Commission Case T-691/14 handed down on 12 December 2018 would be binding in the preliminary issues trial in the High Court.

After an authoritative survey of the authorities on the effect of the res judicata principle in EU law, Rose LJ concluded that a purposive approach was to be applied to determine the scope of the principle. The principle prevents any person from seeking to challenge a decision which has been adopted in compliance with an earlier annulling judgment of an EU court invalidating an unlawful measure previously adopted by that institution. The result of an annulling judgment is that the institution is bound to decide the issue in the way that the annulling Court has concluded it should be decided. Hence any Court reviewing that new decision cannot entertain a challenge on that issue; the matter is res judicata erga omnes. However, the underlying facts were to be separated from the binding effect of the decision. There was no support in the European cases for the idea that factual findings made by the Court in an annulling judgment as part and parcel of its analysis of the impugned measure can be borrowed in domestic proceedings and treated there as being binding, in the way suggested by Servier.

The Claimants are therefore not precluded in the preliminary issues trial from adducing their own evidence and arguing that the High Court should make factual findings which are contrary to those reached by the General Court, as the question arises in a different context.

Robert Palmer QC acted for all the NHS claimants, with Julian Gregory for the Scottish and Northern Irish claimants and Laura John for the Welsh claimants.

The full text of the judgment is here.

Campaign Against Arms Trade v. Secretary of State for International Trade

The Court of Appeal has today handed down judgment in Campaign Against Arms Trade v. Secretary of State for International Trade, in a ruling with major ramifications for the licensing of military equipment for use in conflict zones by the United Kingdom and other EU Member States.

The case concerned the sale or transfer of arms from the United Kingdom to the Kingdom of Saudi Arabia for possible use in the on-going conflict in Yemen. In its judgment, the Court of Appeal found that the government’s approach to assessing whether there is a “clear risk” that military equipment “might be used in serious violations of international humanitarian law”, was irrational and therefore unlawful. In particular, the government had failed to assess whether there was a pattern of violations of international humanitarian law so as to inform its decision on the clear risk test. The Court accepted the Claimant’s argument that the question whether a violation had occurred could and must “properly be answered in respect of many incidents” of concern.

Conor McCarthy was instructed as junior counsel for the Claimant.

Nikolaus Grubeck acted for the First Interveners, Human Rights Watch, Amnesty International and Rights Watch UK.

Gerry Facenna QC and Julianne Kerr Morrison were instructed by the Second Intervener, Oxfam.

The case has already been covered by the BBC, Independent and FT.

The full text of the judgment is here.

In a judgment handed down today, the Court of Appeal has decided that the term “imprisonment” in the Immigration (EEA) Regulations 2016 includes custodial sentences passed on minors and young offenders. The result is that, in principle, such sentences break the continuity of residence that is required in order for a person to enjoy the highest level of protection from deportation under EU law. This is the first time the higher courts have considered the effects of a custodial sentence given to a young offender on protection from deportation under EU law.

The Respondent was a Romanian citizen who had been convicted of a number of offences while still a minor, and had received a sentence of detention on three occasions as a result. The Secretary of State made an expulsion decision against him, holding that he was not entitled to “enhanced protection” from expulsion because, although he had resided in the UK for over 10 years, his custodial sentences had interrupted his continuity of residence. On appeal, the First-Tier and Upper Tribunals held that, as the respondent had been under the age of 21 at the time of his convictions, he could not be given a sentence of “imprisonment” under domestic law. Accordingly, for the purposes of regulations 3 and 26 of the 2016 Regulations, his residence was uninterrupted, and he could only be deported on “imperative” grounds of public security.

The Court of Appeal allowed the Secretary of State’s appeal, holding that, properly construed in line with the case law of the EU Court of Justice, the term “imprisonment” in the 2016 Regulations included a custodial sentence given to a young offender. Accepting the submissions advanced by Ben Lask and Harry Gillow for the Secretary of State, the Court observed that:

“Although the jurisprudence refers most frequently to “imprisonment” rather than “custodial sentence” I am quite satisfied that the rationale for the principle that, in general, a custodial sentence is indicative of a rejection of societal values and a severing of integrative links so as to interrupt the required continuity of residence, is equally applicable to sentences of detention in a YOI as it is to imprisonment. This is because, on a proper analysis, it is not the sentence which indicates rejection of societal values but the offending which is sufficiently serious to warrant a custodial sentence whether of imprisonment or some other form of detention.”

Ben Lask and Harry Gillow acted for the Secretary of State. The judgment can be read here.

The Constitutional Court of Ukraine has declared unconstitutional the clauses of the law on preventing corruption which had obliged representatives of public anti-corruption organisations to submit their asset declarations. This ruling took into account of an amicus curiae intervention prepared by Jeremy McBride with the Ukrainian Helsinki Human Rights Union, in which it had been submitted that such an obligation did not meet the requirement under European and international standards for legal precision and did not comply with either the prohibition on discrimination or the rights to respect for private life and freedom of association under those standards.

Here is a link to a press report on the ruling.

Motor Insurers’ Bureau v Lewis [2019] EWCA Civ 909
Court of Appeal (Henderson LJ, Flaux LJ and Sir Stephen Richards); 5th June 2019

The Motor Insurers’ Bureau (“MIB”) appealed against the decision of Soole J that the EU Motor Insurance Directive (Directive 2009/103/EC) had direct effect against the MIB as an emanation of the state such that the MIB was liable to indemnify the respondent claimant for an injury suffered when he was struck by an uninsured motor vehicle on private land (see here).

The MIB denied contingent liability pursuant to the Uninsured Drivers Agreement (“UDA”) as the accident and injuries were not caused by or arising out of the use of the vehicle on a road or other public place under s.145 of the Road Traffic Act 1988 (“the RTA liability”). The MIB did not dispute in the appeal that it is an emanation of the state. Rather, it argued:

(1) That the relevant Articles 3 and 10 of the 2009 Directive lacked the necessary direct effect since they were not unconditional, requiring the Member State to exercise a discretion to delegate the relevant contingent liability to a “body”; the MIB claimed not to be that body for these purposes, so that that discretion had yet to be exercised

(2) That the MIB’s function as emanation of the state was limited, under the UDA, to the RTA liability and did not include the broader obligation on the UK state to comply with the 2009 Directive.

Dismissing the appeal, the Court of Appeal found:

(1) As accepted by Flaux J in Byrne v MIB [2009] QB 66, the relevant discretion has been fully used by the designation of the MIB as the compensation body. As AG Sharpston said in Farrell v Whitty (No 2) [2018] QB 1179, this is “precisely the type of right” for which the UK has already conferred residual liability upon the MIB. There is thus no question of the Article 3 and 10 obligations being conditional and accordingly they have direct effect, which is also what, properly understood, the CJEU said in Farrell.

(2) The UK government has failed in its EU law obligation, as identified by the CJEU in Vnuk [2016] RTR 10, to ensure that civil liability in respect of the use of motor vehicles on private land is the subject of a scheme of compulsory motor insurance, as well as in its co-extensive obligation to assign responsibility for that liability to the compensation body, just as the Irish government failed in Farrell. The broad terms of the CJEU’s Farrell judgment show that the compensation body is intended to protect and compensate victims by remedying the failure of the Member State to fulfil its obligation. Like the Irish MIB (“MIBI”) in Farrell, the MIB possesses special powers under the RTA and accordingly, like the MIBI, is an emanation of the state against which the relevant directly effective obligation can be enforced by the claimant. On the basis that the MIB is an emanation of the state, it is no answer to its liability to compensate the claimant that this liability has only arisen through the fault of the UK government.

Philip Moser QC represented the successful respondent.

The full text of the judgment is here.

The Grand Chamber of the European Court of Human Rights has given its ruling on the first request made by the Committee of Ministers of the Council of Europe under the infringement procedure introduced in 2010 into the European Convention on Human Rights by Article 46 § 4.

The request had concerned the Court’s judgment in Ilgar Mammadov v. Azerbaijan ((application no. 15172/13), in which it had found violations of Article 5 § 1 (right to liberty and security), Article 5 § 4 (right to judicial review of detention), Article 6 § 2 (presumption of innocence) and of Article 18 (limitation on use of restrictions on rights) in conjunction with Article 5 of the Convention, following the arrest and remand in custody in 2013 of Mr Mammadov, a prospective presidential candidate.

The Committee of Ministers, which is responsible for supervising the execution of the Court’s judgments, had made the request after Azerbaijan had failed to adopt to adopt individual measures to put an end to the violations that had been established and to erase their consequences,  in particular, the immediate and unconditional release of Mr Mammadov.

The Court found that the Government had taken only limited steps to implement its judgment, which had not amounted to Azerbaijan acting in “good faith” or in a manner which was in accordance with the “conclusions and spirit” of its ruling in Mr Mammadov’s case. It thus concluded that Azerbaijan had failed to fulfil its obligation under Article 46 § 1 of the Convention to abide by the Court’s judgment. In accordance with Article 46 § 5 of the Convention, cases in which the Court finds a violation of Article 46 § 1 are to be referred back to the Committee of Ministers for consideration of the measures to be taken.

Jeremy McBride, with Fuad Aghayev, represented Mr Mammadov in the proceedings before the Court.

Gerry Facenna QC and Eric Metcalfe are acting for the Information Commissioner in the claim brought by Ed Bridges, supported by the campaign group Liberty, challenging the use of automated facial recognition technology by South Wales police, which is the lead UK police force trialling the technology. Three UK forces have used facial recognition in public spaces since June 2015: the Metropolitan, Leicestershire and South Wales police.

On behalf of the Commissioner, Gerry Facenna submitted to the Divisional Court that the use of facial recognition technology by police forces currently lacks a sufficient legal framework and adequate safeguards, in particular there is an absence of clear rules on which of the 12.5 million images on the police national database – including those not found guilty of a crime – may be included on a watch list when the police use the technology in a public space.

The hearing has now concluded: Lord Justice Haddon-Cave and Mr Justice Swift are considering what the Court described as an important case raising “novel and potentially far-ranging issues”.

Media coverage of the case includes the BBC, The Guardian and The Times.

Competition Commission v W Hing and others CTEA 2/2017; [2019] HKCT3

The Hong Kong Competition Tribunal ruled today on the first cartel case brought under the new HK competition law. The Competition Commission of Hong Kong brought a prosecution against 10 contractors on a major public housing project. The contractors were found to have engaged in market sharing and price fixing. They allocated the floors they would work on between one another and used a shared flyer for winning business.

Attempts by the contractors to run defences that their arrangements generated efficiencies and that they sub-contracted their work were rejected. In reaching its judgment the Tribunal considered how concepts of infringement by “object” and “effect” should be considered in Hong Kong. It also set out the law on efficiencies defences and how they are to be treated.

Daniel Beard QC represented the Competition Commission of Hong Kong.

The Supreme Court has today handed down its long-awaited decision in the “benefit cap” appeals. In a lengthy judgment, comprising separate judgments from five of the seven members of the panel that heard the appeals, the Court has dismissed the appeals by a majority of 5:2 (Lady Hale PSC and Lord Kerr JSC dissenting).

The majority accepted that the revised benefit cap falls within the ambit of Article 8 and involved “Thlimmenos” difference of treatment in relation to lone parents with very young children compared with others subjected to the cap, but ultimately held that this differential treatment was justified for the purposes of Article 14 in the sense of not being ‘manifestly without reasonable foundation’. Accordingly, the appeals were dismissed despite express recognition in the main judgment of Lord Wilson that they had been “rightly brought”.

The powerful dissenting judgments express a different view as to the lawfulness of the revised (and harsher) cap. Lady Hale considered that this was a “clear case where the weight of the evidence shows that a fair balance has not been struck between the interests of the community and the interests of the children concerned and their parents” and held that it had been “comprehensively demonstrated by the mass of evidence… that the revised benefit cap is not suitable to achieving any of its declared aims.”

Ian Wise QC, Steve Broach and Michael Armitage acted for the Appellants in the “DA” case, working with Caoilfhionn Gallagher QC of Doughty Street Chambers and instructed by Rebekah Carrier of Hopkin Murray Beskine solicitors.

The judgment can be found here.

This case has also been covered by The Guardian, BBC and The Independent.