Two Monckton Members Appointed To New FoI Panel

Due to the increasing amount of appeals under the Freedom of Information Act 2000 (FOIA), the Treasury Solicitor’s Department has set up a specialist panel to act in FOIA appeals on behalf of Government Departments. Two members of Chambers have been successfully selected to be on the panel; George Peretz and Gerry Facenna.

In addition to this new panel status, they still remain free to act in FOIA appeals for other public bodies and for private bodies or interest groups seeking access to information.

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George Peretz
Gerry Facenna

Tesco Appeal to Competition Appeal Tribunal

Tesco today launched a legal challenge against one of the remedies recommended by the Competition Commission in its latest inquiry into the grocery sector. Tesco is challenging the Commission’s proposal to introduce a ‘competition assessment’ into the UK planning system. The challenge has been brought in the Competition Appeal Tribunal.

The Commission, in its recent Groceries Market Investigation Final Report, recommended that:

The Department of Communities and Local Government (CLG), the Scottish Executive, the Welsh Assembly Government and the Northern Ireland Executive should take such steps as are necessary to make the OFT a statutory consultee to LPAs on all applications for planning permission, whether submitted by a grocery retailer or a third party, for development of a grocery store (including new stores and extensions) where that store had, or after the proposed scheme has been implemented will have, a net sales area in excess of 1,000 sq metres.

The OFT should provide advice to the LPA on whether a particular retailer has passed or failed a ‘competition test’. Applications would pass the test if within the area bounded by a 10-minute drive-time of the development site: the grocery retailer that would operate the new store was a new entrant to that area; or the total number of fascias in that area was four or more; or the total number of fascias in that area was three or fewer and the relevant grocery retailer would operate less than 60 per cent of groceries sales area (including the new store).

Tesco will argue that the recommendation does not address the underlying problem identified by the Commission in its report, namely the barriers to entry created by the planning regime. Tesco also considers that the Commission failed properly to assess the costs and benefits of the remedy, which if adopted, would place an artificial cap on organic growth.

Julian Gregory is instructed by Tesco.

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Julian Gregory

Weight Watchers Court of Appeal Judgment

The Court of Appeal have given judgement in Weight Watchers v. HMRC. Peter Mantle represented HMRC, who successfully overturned the decision of the VAT & Duties Tribunal. The issue in this VAT case was whether or not Weight Watchers made a single supply (standard rated) to its meetings members, or separate supplies of services at the weekly meeting and of zero rated printed materials. The Court of Appeal concluded that there was a single supply.

The case is important because the Court, in correcting errors made by the Tribunal, emphasised, that in applying the ‘artificial to split test’ found in the ECJ’s judgement in Levob it is necessary to have full regard to (1) the economic element of the test, that is the need to assess from the economic point of view, in business to consumer transactions as well as B2B transactions; and (2) the need to look at the transaction from the perspective of the typical consumer. In particular the Tribunal’s refusal to identify a typical consumer, on the basis that customers had diverse characteristics and motives so that there could be no typical consumer, and their failure even to identify minimum attributes of meetings members was fatal to their analysis. The Court rejected aspects of the Tribunal’s approach that could have led to a narrowing of the circumstances in which a single supply was identified in the UK on the ‘artificial to split’ basis (rather than the ‘principal/ancillary’ basis) contrary to the jurisprudence of the ECJ. Though not strictly necessary for the decision, the Chancellor affirmed that although an appeal court had to show circumspection on this type of VAT appeal it was not limited to intervening only when the test in Edwards v. Bairstow was met. This also helps elucidate his approach in Zurich Insurance Co [2007] STC 1756, a case used by some to try to restrict generally the scope of appeals involving VAT classifications

Peter Mantle was instructed by HMRC.

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Peter Mantle

Rejection of Lisbon Treaty Referendum Claim

R (on the application of Stuart Wheeler) v Office of the Prime Minister & Anor [2008] EWHC 1409 (Admin)

On 25 June, the Divisional Court (Richards LJ and Mackay J) gave judgment in favour of the Defendants, the Office of the Prime Minister and the Foreign & Commonwealth Office in the claim for judicial review brought by Mr Stuart Wheeler.

The Court explained that the claim failed for several reasons.

Mr Wheeler failed to establish the existence of the implied promise upon which his case of a legitimate expectation depended, namely a promise to hold a referendum on the Lisbon Treaty.

As to the issue of the differences between the Lisbon Treaty and the Constitutional Treaty, the Court stated, “Unlike the Constitutional Treaty, the Lisbon Treaty does not purport, either by its title or in its terms, to lay down a constitution for Europe. Unlike the Constitutional Treaty, it does not repeal the existing treaties and replace them by a single text, but proceeds by way of amendment of the existing treaties; and it leaves in place the existing entities and institutions (save that the European Community is subsumed into the European Union) rather than replacing them with a new legal entity. We see no basis for dismissing such differences as obviously immaterial even if they are treated as differences of form rather than of substance. There are also, on any view, differences of substance.”

The court noted that an assessment of the substantiality or materiality of such differences as exist depends on political perspective and political judgment and made observations as to the justiciability of the issue. At best the review of the Government’s assessment had to be approached on a Wednesbury basis, and as such, the Court was “far from persuaded that the assessment is an unreasonable one”.

As to the question of whether a promise of this kind could give rise to an enforceable legitimate expectation, the Court held, “The subject-matter, nature and context of a promise of this kind place it in the realm of politics, not of the courts, and the question whether the government should be held to such a promise is a political rather than a legal matter.”

Furthermore, the Court held that the fact that the claim would involve an interference by the court with the proceedings of Parliament was a further decisive reason why the claim must fail.

To view the judgment, please click here.

Ian Rogers appeared on behalf of the Office of the Prime Minister and the Foreign and Commonwealth Office.

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Ian Rogers


Royal Mail VAT Exemption Goes All The Way To Europe: TNT Challenge to Be Heard In The ECJ

TNT’s challenge to Royal Mail’s exemption from VAT, due to be heard in the ECJ on 18 June, has attracted the attention of no less than 5 Member States (in addition to the UK) because of the impact that the ECJ’s judgment will have on public postal services in the EU. The TNT case raises fundamental questions about the operation of the exemption and its interrelationship with the regulation of the postal services markets in the EU.

TNT, supported by several Member States, maintains that the exemption infringes the principle of fiscal neutrality, because it applies only to public postal services, and claims that it should either be extended to all providers of postal services or dropped entirely as a result of the liberalisation of the market for postal services in the UK. The UK and Royal Mail, supported by several other Member States, maintain that the exemption remains justified because of the special position of public postal services.

The Commission is concerned that Member States have taken different views on the scope and application of the exemption and wants the ECJ to settle the matter by basing itself upon the EU legislation liberalising the postal services market.

Paul Lasok QC is appearing for Royal Mail

Melanie Hall QC acts for the UK Government/HMRC.

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Paul Lasok QC
Melanie Hall QC

UK Supports German Stance On Taxation Of Charitable Organisations

On 17 June, the Grand Chamber of the European Court of Justice heard a number of Member States (the U.K., France, Ireland, Spain and Greece) intervening to support the German position in the Persche case.

The issue in Persche is whether a German taxpayer can claim tax relief in Germany on a cross-border donation made to a Portuguese foundation which is charitable in Portugal. The German tax authorities have refused to give this relief because of the difficulty of checking whether the foundation is also charitable as a matter of German law. The outcome of the case is likely to be important in the U.K. which also restricts tax relief to donations to U.K. charities.

Raymond Hill was instructed by the Treasury Solicitor on behalf of the U.K.

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Raymond Hill

Mobile Telecoms Service Providers Take On Ofcom In The CAT

On 18 June 2008, the Competition Appeal Tribunal is due to hear the appeal in Vodafone & Ors v Ofcom. Ofcom has ordered that the network operators must establish a “common database” of numbers and a system of “direct routing” of calls to ported numbers.  Porting is the process by which a consumer can retain their telephone number when they change service provider.

Tim Ward appears for Vodafone, Meredith Pickford is acting for T-Mobile and Alan Bates acts for Ofcom.

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Tim Ward QC
Meredith Pickford
Alan Bates

Vitamins Cartel Reaches Court Of Appeal

On 17 June 2008, the Devenish case continues with an appeal against the High Court judgment handed down earlier this year.

Devenish purchased vitamins from members of the vitamins cartel that was the subject of a decision by the EC Commission in 2003. Devenish is seeking all, or some, of the profits earned by the cartelists. The High Court ruled that Devenish was not entitled to that remedy.

Christopher Vajda QC is representing Devenish in the Court of Appeal in its appeal against the High Court judgment (in which he was not involved).

Security For Costs Of VAT Appeal

In a decision in the Chancery Division in the appeals in Calltel and Opto v HMRC, delivered on 6th June 2008, Mr Justice Briggs has awarded HMRC security for its costs against the appellant taxpayers. Calltel is an appeal to the High Court from the VAT & Duties Tribunal’s decision of 20th July 2007 that the appellants were knowingly connected with MTIC fraud. It is believed to be the first time that HMRC have asked for (and received) security for costs in a VAT or Duties appeal. Security was ordered both for the costs already incurred and awarded below and against future costs of the appeal.

Philip Moser is junior counsel for HMRC.

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Philip Moser QC

BSkyB and Virgin Media Appeals In The CAT

Last week, the Competition Appeal Tribunal heard appeals by British Sky Broadcasting Group (“Sky”) and Virgin Media against decisions taken by the Competition Commission and the Secretary of State for Business, Enterprise and Regulatory Reform in relation to Sky’s acquisition of a 17.9% shareholding in ITV.  In a report published last December, the Competition Commission concluded that Sky’s shareholding in ITV may be expected to give rise to a substantial lessening of competition, and recommended that Sky’s holding should be reduced to a level below 7.5%.  The Secretary of State was responsible for the eventual decision on remedial action, but agreed with the Commission’s recommendation.  Sky has challenged the Commission’s conclusions on jurisdiction, competition and remedial action, and also challenges the Secretary of State’s decision on remedies.

Virgin Media has mounted a separate challenge to aspects of the decision in relation to the media public interest consideration that there be a sufficient plurality of persons with control of media enterprises serving certain UK audiences.  Both the Commission and the Secretary of State found that the merger is not expected to operate against the public interest on this latter basis.  Virgin Media has also complained that the remedy imposed was inadequate. The Tribunal has reserved its judgment on both appeals.

Rupert Anderson QC and Elisa Holmes acted for The Secretary of State.

John Swift QC, Daniel Beard and Rob Williams were counsel for The Competition Commission.

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John Swift QC
Daniel Beard QC
Rob Williams
Elisa Holmes