Bratt v. HMRC – formal requirements for VAT repayment claims

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The Court of Appeal has decided that VAT repayment claims made under section 80 VATA must refer to quarterly or monthly accounting periods. In Bratt, the taxpayer purported to make a Fleming claim for the whole of 1989 without identifying which of the sums claimed related to particular accounting periods. The Court of Appeal agreed with HMRC that this was not a valid claim since a claim under section 80 was one to recover an amount which was not in fact VAT which had been accounted for to HMRC “for a prescribed accounting period”. Therefore, the claim had to identify the relevant accounting period and the quantum of the claim was the amount of VAT overpaid in that period. This requirement also had the “sound purpose” of allowing HMRC to determine with certainty from the outset whether the whole or any part of the claim was out of time, or whether HMRC needed to go on and investigate it.

Raymond Hill acted for HMRC before the Court of Appeal.

Click here for the full judgment.

Ronit Kreisberger – Joint Lead Counsel for European Commission Written Observations on MasterCard and Visa MIF claims

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On 23 May, the European Commission published its Written Observations submitted under Article 15(3) of Regulation 1/2003 in the Appeals in the English Court of Appeal against the 3 first instance Judgments dealing with the claims against MasterCard and Visa for recovery of multilateral interchange fees (MIFs).

Article 15(3) provides that the Commission may, acting on its own initiative, submit written observations to national courts where the coherent application of Articles 101/102 so require. The Commission may also make oral observations with the permission of the court in question.

Given the significance of the UK Appeals in the context of the competition law analysis of MIFs, the Commission made Written Observations on the Article 101(1) issues (attached here) and the Article 101(3) issues (attached here). The Commission also made oral submissions, with the Court’s permission, on both topics at the hearing of the Appeals.

Ronit Kreisberger acted as Joint Lead Counsel with Nicholas Khan QC for the European Commission.

Kassie Smith QC appointed to carry out independent review of the Jersey Competition and Regulatory Authority

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Kassie Smith QC has been appointed by the States of Jersey to carry out an independent review of the Jersey Competition and Regulatory Authority (JCRA) following the Royal Court judgment in ATF Overseas Holdings Ltd v JCRA.

The review will look into the circumstances leading up to a decision by the JCRA that ATF Fuels had abused a dominant market position. The Royal Court overturned this decision and this independent evaluation of the circumstances surrounding the case will investigate whether the JCRA discharged its legal duties appropriately, and whether there are any significant deficiencies in how Jersey competition law has operated.  Terms of reference were published in a Ministerial Decision on 20 March 2018.

The initial phase of the review will involve a documentary review, followed by meetings with stakeholders to address points of clarification.  It is anticipated that a draft report will be completed in the summer.

This has also been covered by the Bailiwick Express; see here.

Tariq v UK: Lack of Gist in Closed Proceedings Not Unfair

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Gulamhussein and Tariq v United Kingdom, application nos. 46538/11 and 3960/12

The recent decision of the European Court of Human Rights in Tariq v UK has significant implications for the use of closed material procedures in civil proceedings in which article 6 ECHR is engaged.

Mr Tariq was employed by the Home Office as an immigration officer. In 2006, his security clearance was revoked due to his “close association with individuals suspected of involvement in plans to mount terrorist attacks” and he was dismissed from his job. Mr Tariq attempted to challenge the decision in the Employment Tribunal but the Home Office refused to disclose the evidence supporting its revocation of his clearance. A special advocate was appointed to represent him in closed proceedings but Mr Tariq complained that he was not provided with a gist of the accusations contrary to the principle identified by the ECtHR in A and others v United Kingdom (2009) 49 EHRR 29. In Mr Tariq’s appeal in 2011, however, the Supreme Court held that the principle in A and others did not require a gist to be provided in every case in which article 6 ECHR was engaged.

In Tariq, the First Section agreed with the Supreme Court, noting that article 6 ECHR did not mean that it was “invariably essential for someone to know the “gist” of the case against them” (para 84). It also noted that, despite the lack of disclosure, the special advocate had been able to make submissions on Mr Tariq’s behalf and the resort to closed proceedings had not been arbitrary or manifestly unreasonable.

Eric Metcalfe acted for the human rights organisation JUSTICE as third-party intervener, led by John Howell QC.

A copy of the Court’s judgment is available here.

Two wrongs don’t make a right: The Supreme Court’s Decision in R (Gallaher and Somerfield) v Competition and Markets Authority [2018] UKSC 25

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The Supreme Court has considered the way in which the OFT conducted its ‘Early Resolution’ settlement negotiations with parties who were subject to its tobacco investigation.  In overturning the decision of the Court of Appeal, the Supreme Court has held that a mistake made to the benefit of one party in a settlement negotiation is not required to be replicated to the benefit of other similarly situated parties. It so concluded on the basis of traditional principles of public law rationality, rejecting the opportunity to fashion any stand-alone principle relating to mistakes in public law.

Daniel Beard QC and Brendan McGurk acted for the successful appellant, the CMA.

Click here for the full judgment.

Court of Appeal grants permission to appeal decision to allow UK arms exports to Saudi Arabia

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On 4th May the Campaign Against Arms Trade (CAAT) was granted permission to appeal against a High Court judgment which allows the UK Government to continue to export arms to Saudi Arabia for use in Yemen. See previous news item here.

The appeal has been expedited to be heard by the Court of Appeal in the Autumn.

Please click here to read the full press release by the Campaign Against Arms Trade (CAAT), the article by The Guardian can be found here.

Conor McCarthy, was instructed by Leigh Day as junior counsel for the Claimant.

Nikolaus Grubeck, was instructed by Debevoise and Plimpton as junior counsel in the proceedings for a coalition of intervenors (Human Rights Watch, Amnesty International and Rights Watch UK).

Airline liable for carrying non-EU citizen without correct papers

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On 24 April 2018, the Court of Appeal handed down judgment in the case of Ryanair v Home Secretary [2018] EWCA Civ 899. The appeal concerned the application of Directive 2004/38/EC, on the right of citizens of the Union and their family members to move and reside freely within the territory of the member states, and the UK carriers liability regime under which airlines may be fined for transporting passengers without the correct documentation into the UK.

In the present case, the passenger had flown from Germany to London on a Ryanair flight with his son, an Austrian citizen. The passenger, a citizen of Bosnia and Herzegovina, had produced a card issued by the Austrian authorities bearing words which could be translated as: “family member — permanent residency”. When the father arrived (with his son) he was stopped by UK Border Force and refused leave to enter the UK. He explained that he lived in Austria and had been told by a German official that he did not need a visa. The UK Border Force ordered Ryanair to take him back to Germany. The Home Office subsequently confirmed that Ryanair was liable to pay £2,000 under section 40 of the Immigration and Asylum Act 1999, on the basis that one of the passengers had arrived in the UK without appropriate documentation.

On appeal, the Court of Appeal held that, in order to take advantage of the visa exemption for family members of EU citizens contained in Art 5.2 of the Directive, a passenger had to have a valid residence card issued under Art 10 of the Directive. A valid residence card for the purposes of Art 10 had to bear the words “Residence card of a family member of a Union citizen”. A card purportedly issued without the requisite words might potentially provide powerful evidence of the holder’s right of free movement and so, perhaps, enable him to prove his entitlement “by other means” under Art 5.4. However, a card that did not carry the specified wording would not of itself satisfy Art 5.2. Further, possession of a card issued under Art 20 of the Directive might potentially afford strong evidence of a right of free movement. Where a passenger failed to produce such a document and failed to establish a right of free movement in some other way, the home secretary was entitled to impose a charge on the carrier in respect of a passenger without proper documentation.

In the present case, however, there was no evidence that the card held by the passenger had been applied for or issued under Art 20. It appeared to have been issued pursuant to Austrian domestic law rather than Art 20. Since the passenger had neither produced the documents required by Art 5.2 nor proved by other means that he was covered by the right of free movement, the home secretary had been entitled to impose the £2,000 charge on Ryanair.

The case was reported in the Times Law Reports on 1 May 2018 (read here).

A copy of the judgment is available here.

Kassie Smith QC, instructed by Stephenson Harwood LLP, acted for Ryanair Ltd.

EU Advocate General concludes that UK pension protection rules are contrary to EU law

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In her Opinion dated 26 April 2018, Advocate General Kokott concludes that restrictions on the compensation payable by the UK Pension Protection Fund (PPF) to employees of insolvent companies is contrary to Directive 2008/94/EC (the Insolvency Directive).

The Advocate General accepts all of the arguments of the claimant Mr Hampshire, represented by Monckton Chambers’ Gerry Facenna QC and James Bourke. In particular, the Advocate General agrees that (except in cases of abuse) EU law entitles every employee of an insolvent employer to receive at least half of the total value of their accrued pension benefits, including any indexation benefits. The Advocate General also agrees that Article 8 of the Insolvency Directive is directly effective and can therefore be relied on directly against the Pension Protection Fund to override the terms of the Pensions Act 2004, and that in practice this binds the trustees administering any pension scheme that is or has been subject to PPF assessment.

Assuming the Advocate General’s Opinion is followed by the Court of Justice, it will represent a significant victory for Mr Hampshire and hundreds of pensioners who have campaigned against the UK’s pension compensation cap for over a decade. Of potentially even greater significance than the ruling on the cap is the impact of any ruling that pensioners in receipt of PPF compensation must receive at least half of any entitlements to annual increases in their pension. Such a ruling would potentially benefit thousands of PPF members, including those who may have initially received a high percentage of their original pension but who have lost any accrued rights to index-linked or guaranteed annual increases.

The Court of Justice has not yet announced a date for its judgment.

Gerry Facenna QC and James Bourke, instructed by Ivan Walker of Walkers Solicitors, are acting for Mr Hampshire.

A copy of the Advocate General’s Opinion is available here.

A previous news item on the reference by the Court of Appeal is here.

Investigatory Powers Act not ‘general and indiscriminate’, says Divisional Court

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The Divisional Court (Singh LJ and Holgate J) has today handed down judgment in judicial review proceedings brought by Liberty, challenging the lawfulness of the Investigatory Powers Act 2016. The case was identified by the Lawyer Magazine as one of its Top 20 Cases for 2018.

Today’s judgment concerns the compatibility with EU law of Part 4 of the 2016 Act, which contains a regime permitting the Home Secretary to require telecommunications operators to retain specified communications data (that is, data concerning matters such as the duration of telephone calls or emails, but not their content) for up to 12 months. The ability of public authorities to access such retained data can be of vital importance, for instance in criminal investigations.

Following the CJEU’s December 2016 judgment in Tele2/Watson, the Home Secretary had previously conceded that Part 4 of the 2016 Act is incompatible with EU law in two discrete respects, which are the subject of pending amendments to the legislation. The Divisional Court accepted the Home Secretary’s argument that the only appropriate relief in such circumstances was declaratory relief (including a declaration that the 2016 Act should be amended within a reasonable time), and that it was not appropriate to make an order disapplying the offending parts of the 2016 Act, as Liberty maintained.

Liberty also advanced a series of other EU law-based objections to Part 4 of the 2016 Act. These included an allegation that Part 4 is incompatible with EU law because it permits the ‘general and indiscriminate’ retention of communications data, amounting to a serious violation of privacy rights. Liberty contended that these matters should all be referred to the CJEU. However, the Divisional Court agreed with the Secretary of State that it should not make any reference to the CJEU, in some cases because it accepted the Government’s submission that the challenged aspect of the 2016 Act is compatible with EU law, and in other cases because the subject matter of Liberty’s complaint is already covered by a preliminary reference to the CJEU made by the Investigatory Powers Tribunal.

The Divisional Court rejected Liberty’s argument that Part 4 of the 2016 Act permits the ‘general and indiscriminate’ retention of communications data. The Court found that there was no basis for such a complaint, given (among other matters) the statutory requirement for the Home Secretary to be satisfied that retention notices are necessary and proportionate.

Monckton Chambers’ Gerry Facenna QC and Michael Armitage, led by First Treasury Counsel, acted for the Secretary of State for the Home Department and Secretary of State for Foreign and Commonwealth Affairs.

De La Rue abandons blue passport procurement challenge

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De La Rue International Limited has today announced that it will not be pursuing its threatened challenge to the award by Her Majesty’ Passport Office of the contract for the production of blue passports to Gemalto UK Limited. Following a two-week extension for the parties to exchange pre-action correspondence and information, the standstill period in the procurement passed at midnight of the 17th/18th April and no claim under the Public Procurement Regulations having been issued, HMPO will be proceeding to enter into the contract.

Philip Moser QC, Alan Bates, Philip Woolfe and Khatija Hafesji of Monckton Chambers acted for HMPO.

Kassie Smith QC and Ligia Osepciu acted for Gemalto UK.