In R(Nouazli) v Secretary of State for the Home Office [2016] UKSC 16, the Supreme Court has rejected a challenge to powers which enable persons exercising free movement rights to be detained, pending a decision whether to remove them from the United Kingdom.  Tim Ward QC acted for the Secretary of State.  The case contains an important statement of principle as to the scope of EU discrimination law.

Regulation 24(1) of the Immigration (European Economic Area) Regulations 2006 permits the detention of person exercising EU free movement rights, if there are reasonable grounds to suspect he is a person who may be removed on (inter alia) public policy grounds. The Appellant was an Algerian national who had formerly been married to a French national, and accordingly enjoyed a right of residence in the UK as an EU family member. He argued that Regulation 24(1) gave rise to discrimination, as no equivalent “pre-detention” power existed in the UK immigration regime which applied to those who were not exercising EU law rights.  The Supreme Court rejected this argument, holding that third country nationals are not an appropriate comparator for testing discrimination in EU law: such “discrimination” is simply a function of the limited scope of the EU legal order.  Nor was such discrimination contrary to the Charter of Fundamental Rights.

The judgment is accordingly of considerable importance in defining the scope of application of EU discrimination law.

The full judgment is available on the Supreme Court’s website (here).

Brendan McGurk was part of the team that successfully defended the Department of Business, Innovation and Skills against a challenge to the lawfulness of a new method by which an industrial training levy is to be calculated and imposed  on the construction industry. The construction levy is imposed on construction employers to raise funds for the training of both the employed and the self-employed workforce in the construction industry. In order to meet concerns within the industry that the basis upon which levy was to be collected on payments made to the self-employed workforce had become too complicated, the Construction Industry Training Board adopted HMRC’s Construction Industry Scheme as the means by which levy would be calculated on payments made to independent contractors. Hudson Contracts Services Limited, an industry-leading labour agency (albeit providing PAYE and payroll services only), sought to contend that the new basis upon which levy is to be calculated and imposed was ultra vires the Industrial Training Act 1982. The three grounds of challenge pursued by Hudson were each dismissed by Kerr J in a judgment that is available here. The case is one of a number of tax judicial reviews on which Brendan is currently acting.

To view the full judgment, please click here.

The High Court has held that a scheme by which a London council ringfenced 20% of available lettings for working households and ‘model tenants’ was discriminatory and unlawful. Steve Broach acted for the claimants in this case, R (H and others) v Ealing LBC [2016] EWHC 841 (Admin).

The claimants were two families (referred to in the judgment as H and others) who together had the ‘protected characteristics’ of disability, age and gender under the Equality Act 2010. As a result of their circumstances the claimants were unable to meet the work requirement of the scheme introduced by the London Borough of Ealing. They also could not be ‘model tenants’ as this only applied to council tenants.

HHJ Waksman QC allowed the challenge to the scheme on all grounds, being that:

1. The scheme unlawfully discriminated against women, disabled and elderly persons contrary to sections 19 and 29 of the Equality Act 2010 and unlawfully discriminated against women, disabled and elderly persons and children of single parent carers contrary to Article 14 ECHR (read with Article 8 ECHR) in relation to the working household provisions.
2. The Scheme unlawfully discriminated against tenants who do not hold council tenancies contrary to Article 14 ECHR (read with Article 8 ECHR) in relation to the model tenant provisions.
3. In adopting and maintaining the Scheme, the Defendant was in breach of its public sector equality duty under section 149 of the Equality Act 2010.
4. In adopting and maintaining the Scheme, the Defendant was in breach of the obligations in respect of the welfare of children imposed by section 11 of the Children Act 2004.

The Judge quashed the scheme, meaning that at least until a replacement scheme is put in place Ealing will not be able to ringfence any properties for these groups. As a result the claimants and other families in their position will be able to bid for all available properties in each bidding round.

The judgment has important implications for all councils with housing responsibilities, particularly London councils who have to manage very high demand for social housing in the face of a very limited supply.

Steve Broach is instructed for the claimants by Hopkin Murray Beskine solicitors.

To read the judgment please click here.

The First Tier Tribunal (Information Rights) ruled today that the concession agreement under which West Ham United Football Club will become the new anchor tenant at the Olympic stadium, at the Queen Elizabeth Olympic Park in Stratford, London, must be disclosed in full.

The Tribunal agreed with the Information Commissioner that disclosing the contract in full would not be likely to prejudice the commercial interests of either the London Legacy Development Corporation, or of West Ham United Football Club, and that the relevant exemption from disclosure (section 43 FOIA) was not engaged.

A copy of the Information Commissioner’s decision can be viewed here, and the Tribunal’s judgment here.

Further commentary on the judgment can be found here: BBC, The Guardian, Mirror, Daily Mail.

Laura Elizabeth John acted for the Information Commissioner.

 

The First-tier Tribunal has reduced the fine imposed on a Leicestershire estate agency for breaches of the ‘know your client’ requirements of the Money Laundering Regulations 2007.  The original penalty of £169,652 was the largest ever imposed on an estate agency business under the Regulations.  Following an appeal hearing lasting 3 days, the Tribunal has reduced the penalty to £5,000.

The original penalty was imposed on the estate agency (Jackson Grundy Limited) by the Office of Fair Trading (OFT) in March 2014 as one of its last decisions prior to the transfer of all its functions to other regulators.  The OFT calculated the penalty amount under its ‘Interim Penalty Policy’ which set out a scheme for calculating penalty amounts, starting with a percentage of ‘relevant turnover’ at ‘Stage 1’, and subsequent stages at which other factors were taken into account.

A few days after the OFT took its decision, the OFT’s responsibilities for regulating estate agency businesses under the Money Laundering Regulations transferred to HM Revenue & Customs (HMRC).  The estate agency exercised its right to obtain a review of the decision by HMRC.  HMRC upheld the original penalty.  The estate agency then appealed to the Tribunal.

At the hearing before the Tribunal, both parties agreed that the Tribunal had jurisdiction to consider all the facts as it found them to be, and to decide whether the penalty amount that had been imposed was appropriate as constituting an “effective, proportionate and dissuasive” penalty, and to decide for itself what would constitute an appropriate penalty to meet the facts of the case.

A copy of the decision is available here.  (The Tribunal provides a summary of its reasons at paragraphs 3 and 4.)

Monckton barristers represented both parties: the Appellant was represented by Alan Bates, and the Respondent by Peter Mantle.

Judicial review proceedings have been issued in the High Court challenging the government’s decision to export arms to Saudi Arabia for possible use in the conflict in Yemen.

Conor McCarthy has been instructed by Leigh Day in the claim brought by the Campaign Against the Arms Trade.

The challenge follows increasing evidence that Saudi Arabian forces are violating international humanitarian law in Yemen. This evidence includes recent findings by the UN Panel of Experts on Yemen (appointed by the UN Security Council) that airstrikes by coalition forces in Yemen were violating the rules of distinction, proportionality and the prohibition on indiscriminate targeting as well as other rules of international law regarding the conduct of hostilities.

The United Kingdom has presently licensed the export of around £4.6 billion of arms and military equipment to Saudi Arabia.

If permission for the judicial review is granted,  then the High Court will be asked to consider whether the continued arms exports contravene the UK government’s commitments under UK and EU rules regulating the export of military equipment.

Conor McCarthy is acting for the claimant, and instructed by Leigh Day, led by Martin Chamberlain QC.

Paul Lasok QC and Anneliese Blackwood in Supreme Court Win

The Supreme Court has allowed HMRC’s appeals against UBS AG (“UBS”) and DB Group Services (UK) Ltd (“DB”) in relation to detailed schemes designed to avoid the payment of tax on bankers’ bonuses. The determinations and decisions which UBS and DB appealed against required the payment to HMRC of nearly £100 million. In each case, the scheme used by UBS and DB respectively was intended to take advantage of Chapter 2 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”), as amended by Schedule 22 to the Finance Act 2003. The judgement of the Supreme Court was given by Lord Reed, with whom Lord Neuberger, Lord Mance, Lord Carnwath and Lord Hodge agreed.

Lord Reed noted that there were two key factors identified in Barclays Mercantile [2004] UKHL 51, at para 34. First, “tax is generally imposed by reference to economic activities or transactions which exist, as Lord Wilberforce said, ‘in the real world’”. Secondly, tax avoidance schemes commonly include “elements which have been inserted without any business or commercial purpose but are intended to have the effect of removing the transaction from the scope of the charge”. He went on to note that Carnwath LJ said in the Court of Appeal in Barclays Mercantile, [2002] EWCA Civ 1853, at para 66, that taxing statutes generally “draw their life-blood from real world transactions with real world economic effects”. Lord Reed stated that where an enactment is of that character, and a transaction, or an element of a composite transaction, has no purpose other than tax avoidance, it can usually be said, in the words of Carnwath LJ, that “to allow tax treatment to be governed by transactions which have no real world purpose of any kind is inconsistent with that fundamental characteristic.” He concluded that, as Ribeiro PJ said in Collector of Stamp Revenue v Arrowtown Assets Ltd [2003] HKCFA 46, at para 35, where schemes involve intermediate transactions inserted for the sole purpose of tax avoidance, it is quite likely that a purposive interpretation will result in such steps being disregarded for fiscal purposes although not always. Some enactments, properly construed, confer relief from taxation even where the transaction in question forms part of a wider arrangement undertaken solely for the purpose of obtaining the relief.  He concluded that the position was ultimately summarised by Ribeiro PJ in Arrowtown Assets, at para 35: “The ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically”.

Lord Reed considered that section 423 of ITEPA, when construed purposively, was not intended to apply to the schemes in question. He found that the reference in section 423(1) to “any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) applies” was to be construed as being limited to provision having a business or commercial purpose, and not to commercially irrelevant conditions whose only purpose is the obtaining of the exemption. On the facts he found that the restrictions on the shares in the UBS and DB schemes respectively were commercially irrelevant conditions whose only purpose was the obtaining of the exemption. As a consequence he concluded that the schemes involved the provision of unrestricted shares and as such fell outside the tax exemption provided for in Chapter 2 of Part 7 of ITEPA.

Paul Lasok QC and Anneliese Blackwood appeared on behalf of HMRC.

To view the full judgment, please click here.

 

The Court of Appeal this week upheld the Secretary of State’s decision to close the Renewables Obligation to new large-scale solar photovoltaic (PV) projects two years early, despite previous statements by the Government (made in the interests of providing “certainty” to investors) that the RO would remain open until 31 March 2017, in a decision which is likely to have significant implications for the future of similar renewable energy subsidies.

Dismissing Solar Century Holdings Ltd’s appeal from the judgment of Green J, the Court held that the existence of Government’s Levy Control Framework, which caps the cost of levy-funded spending for energy and  climate change goals, prevented any legitimate expectation arising to the effect that the RO would not be closed before that date if deployment of solar PV exceeded forecasts.

Floyd LJ held that the Government was entitled to formulate and re-formulate policy when rational grounds existed for doing so, unless to do so would amount to an abuse of power. Statements in the Levy Control Framework that the Government was committed to “maintaining support levels” for “existing investments” did not include investments which were in the pipeline but which had not yet been accredited under the RO scheme.

Further, the adoption of a “grace period” of an extra year for certain pipeline projects to accredit did not offend against any principle against retrospectivity and was not unfair in the public law sense, despite the fact that the relevant date by which projects would have to meet the criteria to qualify for the grace period had already passed when the closure order was made. The Secretary of State had set the date of the publication of his consultation proposals, to prevent a “gold rush” of projects seeking to qualify for accreditation in time. It it was lawful to close the scheme in its entirety to new entrants with effect from 1 April 2015, it was difficult to see how it could be unlawful to soften that blow by extending the scheme for a further year to those who had reached a particular stage of investment.

To view the full judgment, please click here.

Robert Palmer appeared for the Secretary of State.

Case C-72/15 OJSC Rosneft Oil Company v. HM Treasury; the Secretary of State for Business, Innovation, and Skills; the Financial Conduct Authority

On 23 February 2016 the Grand Chamber of the Court of Justice of the EU heard Case C-72/15 Rosneft, concerning that company’s challenge to the sanctions imposed by the EU on the Russian Federation, and in particular on the Russian oil sector, in response to Russia’s actions in Ukraine.

The case was referred by the High Court in February 2015 ([2015] EWHC 248 (Admin)) and raises questions both as to the legality of the EU’s sanctions against Russia, and important constitutional issues concerning the jurisdiction of the EU Court of Justice to rule on the validity of decisions adopted under the EU Common Foreign and Security Policy.

The debate at the oral hearing focused on the interpretation of Article 275 TFEU, which limits the CJEU’s jurisdiction in relation to foreign and security policy matters, on the scope of Article 215(2) TFEU, which concerns restrictive measures adopted against natural or legal persons and groups or non-State entities, and on the role of the national courts in protecting fundamental rights affected by EU foreign policy decisions.

The judgment is likely to contain important findings by the CJEU as to the proportionality of sectorally-targeted sanctions, such as those targeting the Russian oil industry, and the jurisdiction of both national courts and the CJEU itself to consider challenges to the validity of EU foreign policy decisions. The Court is, in particular, considering whether EU law recognises the concept of a non-justiciable acte de gouvernement.

Gerry Facenna QC appeared on behalf of the United Kingdom. The hearing was also attended by Rosneft, the UK Financial Conduct Authority, the Czech Republic, Estonia, France, Germany, the EU Council and the Commission. The Advocate General’s Opinion is due on 31 May 2016.

In the proceedings in the High Court, Tim Ward QC and Julianne Kerr Morrison also acted for HM Treasury and the Department for Business, Innovation and Skills.

The European Court in Rywin v. Poland (read here) has found by a 4-3 majority  that the presumption of innocence under Article 6(2) of the European Convention on Human Rights was not breached by the contemporaneous  carrying out of criminal proceedings and a parliamentary commission of inquiry into a corruption scandal which concerned a well-known film producer. The work of the commission of inquiry had given rise to extensive media comment and the lower house of Parliament had approved the commission’s report in which five high-ranking State officials were alleged to have been guilty of corruption in connection with the legislative procedure for the amendment of the Broadcasting Act and the film producer was mentioned as being the “agent” of those officials. The film producer was subsequently convicted of attempted fraud. The Court considered that the presumption of innocence had not been breached by the wording of the resolution setting up the parliamentary commission of inquiry and the findings of the commission’s report. The Court also found that there had been no violation of the right to a fair trial under Article 6(1) or of the prohibition on inhuman and degrading treatment under Article 3. It considered that the reasoning of the judgments delivered by the criminal courts did not reveal anything to suggest that the judges had been influenced by the statements of the members of the commission or by the findings in its report and that the authorities had been attentive to the producer’s state of health during his imprisonment and that the general conditions of his detention could not be criticised.

Jeremy McBride acted for Mr Rywin.