On 7 May 2010 the Court of Appeal granted BCL permission to appeal to the Court of Appeal on the question of whether the Competition Appeal Tribunal was right to dismiss an application for an extension in time for lodging a claim for damages against BASF under section 47A of the Competition Act 1988 following a European Commission decision finding that BASF had participated in the vitamins cartel. In earlier proceedings [2009] EWCA Civ 434 the Court of Appeal held that BCL’s claim was out of time since an appeal against penalty, but not liability, in the EU courts did not stop time running under the Tribunal’s rules. As a result BCL then sought an extension of time under the Tribunal’s rules which was refused by the Tribunal. The Tribunal also refused BCL permission to appeal to the Court of Appeal.

The hearing in the Court of Appeal is likely to take place before the end of the year.

Christopher Vajda QC (who was not instructed in the proceedings before the Tribunal) acted for BCL in the successful application to the Court of Appeal for permission to appeal. He is instructed by Taylor Vinters.

Melanie Hall QC is to present this year’s Victor Durkacz Memorial Lecture at the VAT Practitioners Group Annual Conference on 18 June 2010.

The VPG is at the forefront of VAT practitioners’ representation, whose monthly meetings give members the opportunity to discuss various technical issues and to keep abreast of recent VAT developments.  The VPG Annual Conference invites leading figures in the VAT world to talk about a wide range of topics on VAT issues.

Melanie Hall QC has been an acknowledged leader in the field of VAT and Customs duties for many years, having appeared in some of the most high profile and landmark cases.

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Melanie Hall QC

R(Oxfordshire County Council) v The Bus Lane Adjudicator [2010] EWHC 894 (Admin)  Beatson J

Mr Justice Beatson gave judgment yesterday in a test case concerning the enforcement of penalty charges for bus lane contraventions in Oxford’s historic city centre.  The facts of the case concerned a 15 metre stretch of road adjacent to University College in the High Street, which was not marked by any of the familiar upright signs or carriageway markings designed to indicate bus lanes.  The ‘bus gate’ was one of several introduced by the County Council as part of a traffic scheme to reduce traffic congestion in the city centre in April 2007.  According to press reports, the Council collected £1.35m in fines between April 2007 and March 2009.

Mr Justice Blake, in granting permission to apply for Judicial Review of the Bus Lane Adjudicator’s decision to set aside a penalty charge, invited the Traffic Penalty Tribunal to play an active role in defending its decision, instead of the neutral role more commonly adopted by tribunals.  This was done to ensure that the hearing was contested and in the interests of clarifying the law.

The judgment of Mr Justice Beatson has resolved a difficult issue of statutory interpretation as to what constitutes a bus lane.  The relevant section of the High Street was held to be a bus lane.  In addition, the judgment deals with the statutory duty of local authorities to take steps to bring the terms of its traffic bye-laws to the attention of road users.  The Adjudicator had failed to take into account all relevant considerations and the decision was set aside. However, the Adjudicator had also made obiter findings on the issue of whether the Council was in breach of its statutory duty.  The only signs which stated the limited hours of operation of the bus lane were those at the very start of the bus gate.  None of the signs leading up to the bus gate stated the times of its operation.  Mr Justice Beatson agreed with the Adjudicator’s obiter reason for her decision.  The Judge held that the Council’s signs were misleading in giving the impression that the bus lane applied at all times rather than only between the times specified in the Council’s bye-law.  The Judge also refused to grant a declaration sought by the Council that the signs used at the start of the bus gate satisfied the Council’s statutory duty.

Ian Rogers was instructed by the Traffic Penalty Tribunal to appear for the Bus Lane Adjudicator.

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Ian Rogers

In a landmark decision for the insurance industry, the Court of Appeal has held that operators of comparison websites that introduced potential insureds to insurers were acting as insurance agents or brokers providing insurance intermediary services and so qualified for VAT exemption.

Rejecting HMRC’s arguments, the Court held that it is not necessary for a person to have a direct link with either the insured or the insurer in order to benefit from the exemption; it is sufficient for a person to be acting in a chain of intermediaries, so long as that person is providing services which are themselves characteristic of an insurance agent or broker.  In that regard, it is an essential characteristic of an insurance agent or broker that they are engaged in the business of bringing together insurance companies and clients or potential clients.

The Court of Appeal rejected HMRC’s application for a reference to the ECJ.

Valentina Sloane acted for the successful taxpayer Trader Media.

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Valentina Sloane

Elisa Holmes has successfully defended an appeal from a decision of the Pensions Ombudsman in relation to the Public Service Pension Scheme.  The case concerned a wide-reaching point of principle in relation to early retirement sickness benefits.

Mrs Swallow after suffering with ‘Anxiety Neurosis’ (panic attacks) was dismissed from her position as an Executive Officer at Her Majesty’s Revenue & Customs on 30 April 1993, on grounds of gross misconduct arising from her continued failure to act on instructions to attend a number of psychiatrist’s appointments.

Mrs Swallow, when applying to release deferred pension benefits, failed due to her lack of disclosure when completing the necessary medical consent forms.  When the benefits were finally granted in 2002, payments were not back dated to the time of her dismissal.

In the judgment, Morgan J commented that Elisa “provided considerable assistance to the court. In the best traditions of the Bar, in view of the fact that Mrs Swallow did not have legal assistance, Ms Holmes dealt fairly with all the matters arising. I am grateful to the Defendants’ solicitors and to counsel for all of the assistance they gave me”.

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Elisa Holmes

The Supreme Court (Lord Rodger, Lady Hale, Lord Mance) has rejected an application for permission to appeal which sought a reference to the European Court of Justice on the scope of Article 49 EC (the freedom to provide services, now Article 56 of the Treaty on the Functioning of the European Union).

The Court of Appeal (Rix LJ, Lloyd LJ, Sir David Keene) [2010] EWCA Civ 4 had dismissed an appeal against the decision of the Administrative Court refusing Judicial Review of various decisions of the Home Secretary concerning the application of Article 49 EC and the case law relating to “posted workers”.

The decision under appeal (R(Lee Ling Low and others) v Secretary of State for the Home Department [2009] 2 C.M.L.R. 22) was the lead case among 23 Judicial Review applications. A further 650 cases had been dealt with in the same manner by the Home Secretary.

The Court of Appeal decided against the Appellants both on the basis that Article 49 and the case law on posted workers could not be extended to cover the Appellants’ case and because the scheme which had been devised was an abuse of EC law. The scheme involved an Irish company entering into agreements to supply catering services to UK restaurant companies. The services were to be provided by third country nationals who were illegally present in the UK and had no right to reside in Ireland. An application was made on behalf of the Irish company, UK company and the third country nationals in this and hundreds of other cases, seeking confirmation of the workers’ status as “posted workers” of the Irish company under Article 49 EC and the principle of derivative rights. On the application of the “abuse” doctrine of EC law, the Court held,

“When it commenced its operations [the Irish appellant company] had no business in Ireland or the UK involving employees who were lawfully present or employed in either country. On its own evidence it has targeted the UK because of recent immigration law changes which have made it harder for Chinese restaurants here to comply with the law in their employment practices. It has therefore sought to put between the UK restaurant and its staff the fiction of an undertaking established in another EU member state of establishment purportedly using its article 49 freedom to bring or “post” its lawful employees to the UK for the purpose of its operations here. This is solely in order to attempt to translate those unlawfully present and illegally working in the UK into workers protected under Community law. The truth, however, is that the Irish company has no employees lawfully present as such in Ireland and has posted none to the UK. The whole thing is a charade…”

Ian Rogers appeared for the Home Secretary in all stages of the proceedings.

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Ian Rogers

Elisa Holmes successfully represented the OFT in persuading a reluctant court to grant an enforcement order preventing Peter Hall from using his consumer credit licence obtained from the OFT on the basis of a contravention of the Consumer Credit Act and the Regulations.

This landmark case concerned the first attempt by the OFT to use enforcement powers under Part 8 of the Enterprise Act 2002 (which implement the EU Injunctions Directive) in relation to contraventions of the Consumer Credit Act 1974 together with the Consumer Protection from Unfair Trading Regulations (“the Regulations”).

This is a historical and crucial decision for the OFT in relation to the enforcement powers available to it.

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Elisa Holmes

The nominations for these awards have been published, and we are pleased to announce that Valentina Sloane has been shortlisted for ‘Rising Star’ at the Taxation Awards 2010.

The winner will be announced on 20 May at the London Hilton Hotel, Park Lane.

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Valentina Sloane

The High Court has granted Sita leave to appeal to the Court of Appeal following their case against Greater Manchester Waste Disposal Authority (GMWDA) in which GMWDA were successful in striking-out Sita’s claim on the grounds that it brought was out of time.

The case arises out of the tendering process for a PFI project to provide waste disposal facilities for Greater Manchester.  The project, the largest of its kind to have been awarded in the UK, attracted a number of tenders, which were eventually reduced to two.  GMWDA selected Viridor Laing ahead of Sita.  The final contracts between GMWDA and Viridor Laing were delayed due to changes in the specification an due the credit crunch, but were finally agreed upon.  Sita argued that following this interruption, it should have been allowed, under statutory procedures to return to the tender process.  Sita also argued that GMWDA’s decision to select the most economic tender was flawed as Viridor, unlike Sita, was offered an opportunity to amend their bid.

GMWDA sought to strike out Sita’s case as the proceedings had been commenced outside the limitation period.

Sita have been awarded leave to appeal.

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Michael Bowsher QC
Philip Woolfe

Monckton barristers Peter Mantle and Philip Woolfe acted for HMRC in their successful defence of the first group litigation in VAT to reach trial.  This should end a group of claims valued at around £136 million. The Court of Appeal upheld HMRC’s arguments that the test claims should be dismissed in their entirety. Further, the court accepted submissions on behalf of HMRC that, although unnecessary to decide this appeal, the question of whether Community law requires compound interest to be paid in respect of overpaid VAT was important and difficult enough that a reference should be made to the Court of Justice of the European Union when a proper opportunity arises. The claimants have not sought permission to appeal.

This appeal determined the test claims in “VAT Interest Cars” Group Litigation. They concerned HMRC’s alleged liability to pay compound  interest on overpayments of VAT levied in breach of Community law from motor vehicle dealers in connection with “manufacturers’ bonuses” and the second-hand car margin scheme.  HMRC had already repaid the principal amount of the overpaid VAT together with simple interest.  The issue in these proceedings was whether the claimants were entitled to compound interest, rather than just simple interest, on the overpayments, first, as a matter of principle as a Community law right, and, second, in the light of the lapse of time since payment of the overpaid amounts. At first instance, the Claimants succeeded in persuading Henderson J. that Community law required the payment of compound interest in such circumstances. However, HMRC defeated the claims by successfully arguing that the claims were time-barred, and that the application of the limitation defences did not contravene Community law.

On appeal, the Court of Appeal upheld HMRC’s case on time-limits. In particular they rejected the Claimants’ arguments that Community law required the Limitation Act 1980 time limits to be disapplied or extended. The Court of Appeal was also persuaded by HMRC’s submissions that the question of compound interest was not clear as a matter of Community law, taking a more favourable view than the judge below, and considering a reference desirable..

Peter Mantle and Philip Woolfe represented the respondents, HMRC, alongside Jonathan Swift QC, First Treasury Counsel

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Peter Mantle
Philip Woolfe