England and Wales Court of Appeal (Civil Division) Decisions

Commissioners for Customs and Excise v Upton [2002] EWCA Civ 520 (18th April, 2002)

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
The Vice-Chancellor

		Royal Courts of Justice Strand, London, WC2A 2LL
		18th April 2002

Peter Gibson L.J.:

1. This appeal gives rise to a short question of construction of a statutory instrument relating to Value Added Tax (“VAT”) and in particular the allowance of input tax as a deduction in respect of the supply to a taxable person of a motor car for business purposes. The Appellant is the taxpayer, Christopher Upton. He claimed a deduction of £19,571 input tax paid by him as the purchaser of a Lamborghini Diablo, which, he said, he acquired solely for business use. The Respondents, the Commissioners of Customs and Excise, disallowed his claim. Mr. Upton appealed and his appeal was allowed by the Value Added Tax and Duties Tribunal (Mr. de Voil and Mr. Clark) on 9 April 2000. The Commissioners appealed to the High Court and their appeal was allowed by the Vice-Chancellor, Sir Andrew Morritt, who refused Mr. Upton permission to appeal. The Vice-Chancellor’s judgment is now reported ([2001] STC 912). The appeal by Mr. Upton to this court is brought with the permission of Robert Walker L.J.
2. The provisions of the Value Added Tax Act 1994 (“the 1994 Act”) and the subordinate legislation made thereunder implement the provisions of the Sixth VAT Directive (77/388/EEC). The system of input tax deduction under Art. 17 of the Directive is intended to ensure that all economic activities are taxed in a wholly neutral way so that a taxable person is relieved entirely of the burden of VAT incurred in the course of his trading activities. But that principle is subject to certain derogations provided for in the Directive. In particular Art. 17(6) permits Member States to retain existing exclusions from the right to deduct input tax on cars acquired exclusively for business use.
3. Provision has been made by the United Kingdom for such exclusions by a series of statutory instruments known as Car Orders made under s. 25(7) of the 1994 Act and its statutory predecessors. We are concerned with the Value Added Tax (Input Tax) Order 1992 (“the 1992 Order”). The most relevant provisions are those introduced by amendment to the 1992 Order by the Value Added Tax (Input Tax) (Amendment) (No. 3) Order 1995 (“the 1995 Order”). Art. 7(1) of the 1992 Order as amended provides for exclusions from the general right of a taxable person under s. 25 to deduct input tax in respect of a supply to him of a motor car. But by Art. 7 (2)(a), Art. 7(1) is not to apply if (i) the car is a qualifying motor car, (ii) the car is supplied to a taxable person, and (iii) “the relevant condition” is satisfied. Thus the effect of the satisfaction of the three conditions is that the taxable person can avail himself of the right to deduct input tax.
4. By Art. 7(2E) the relevant condition is, so far as material, that the supply is “to a taxable person who intends to use the motor car ... (a) exclusively for the purposes of a business carried on by him, but this is subject to paragraph (2G) below ...”
5. Art. 7(2G), so far as material, provides:

“A taxable person shall not be taken to intend to use a motor car exclusively for the purposes of a business carried on by him if he intends to –

....

(b) make it available (otherwise than by letting it on hire) to any person (including, where the taxable person is an individual, himself, or where the taxable person is a partnership, a partner) for private use, whether or not for a consideration.”

It is the meaning to be attached to the words “make it available” which is the crucial issue in this case.

6. I now turn to the facts. Mr. Upton is a taxable person. He carries on business under the name Fagomatic. His business is the supply and servicing of cigarette vending machines in clubs in the London area. He bought the Lamborghini in 1998. It is a qualifying motor car. He claimed a deduction for the input tax paid on the purchase of his car in his VAT return for the period ended July 1998.
7. At the hearing of Mr. Upton’s appeal from the Commissioners’ disallowance of his claim he gave evidence. The Tribunal found him to be a witness of truth and had no hesitation in accepting his evidence. They said that his case displayed certain features which set it apart from the general run of cases and that it was very much a one-off. They explained why in paras. 3, 4 and 5 of their decision:

“3. In the first place [Mr. Upton’s] business, the supply and servicing of cigarettes vending machines in clubs, appears to be an affair of cut-throat rivalry where image is everything. If you turn up in a plain white van, you are treated accordingly; if you turn up in a car costing more than £100,000 you are treated as a person of consequence. [Mr. Upton] has reached the top of his particular slippery pole – his representative referred to him as the king of the cigarette vending machines – and he intends to stay there. For three years before buying the Lamborghini he had had an Aston Martin; when the rivals who are constantly at his heels trying to poach his business also acquired Aston Martins [Mr. Upton] decided to go one better. The purchase of the Aston Martin had increased his turnover by 100%; the Lamborghini increased it by a further 50%.

4. In the second place, [Mr. Upton] appears to have no visible private life worth mentioning. He works seven days a week from 8.00am until midnight or later; the clubs which are his main business stay open until about 3.00am. He has not had a holiday for five years. In response to a light-hearted comment from the Tribunal about the pulling power of a Lamborghini, he observed that he was 61 years of age. He has no wife or family; he lives in central London, where all the shops he needs are within walking distance.

5. Thirdly, [Mr. Upton] has convictions for driving under the influence of alcohol and other substances, even though he is not at the moment disqualified from driving. On the occasions when he does find a little time for socialising, he cannot imagine doing so without alcohol, and it would be quite unthinkable for him to drive on those occasions - he uses taxis. We have no difficulty in visualising the effect which a further disqualification from driving would have on his business.”

8. The Tribunal found in para. 6 that Mr. Upton during the day used special security vans for delivering cigarettes to machines and collecting cash from them, and that daytime parking for delivery was possible because the clubs normally had single yellow lines outside, but that after 6.30pm this was not possible because the club doormen coned off the available space for use by more favoured clients. The Tribunal said: “No doorman worth his salt would allow a white van into such a space; a Lamborghini is a different matter.”
9. In para. 7 the Tribunal found that Mr. Upton ran his business from home and that the Lamborghini was parked in a car park some 300 yards away. In para. 9 they found that before he bought the car he enquired whether it would be possible to insure it for business use only, but that his agent told him that all insurance policies cover private use without extra charge. It appears that Mr. Upton acquiesced in the car being insured for both private and business use.
10. In para. 13 the Tribunal referred to the presumption that one intends the natural and foreseeable consequences of one’s actions, but said that they felt Mr. Upton had succeeded in rebutting it. They continued:

“He bought the Lamborghini for one reason and one reason only – to impress customers and so stay ahead of the competition; he clearly did not intend to use it privately and has not done so; he has convinced us that it is unthinkable that he could do so. It is garaged near his home address, but that is also his business address; he has access to the keys, as it would be absurd that he should not; he has no other car for private use, but does not need one.”

11. The Tribunal in para. 14 referred to the evidence about the car being insured for private use, and said that they could not regard his failure to insist more vigorously on a policy for business purposes only as evidence that he had any intention of using the car privately. In para. 15 they said that they did not find it easy to discern the legislative purpose behind Art. 7 (2G), and saw some force in a suggestion by Mr. Upton’s representative that the words were mere surplusage reflecting an excess of caution. They rejected the Commissioners’ argument that the words of para. 2 (G) imply that in order to qualify one must put the car wholly outside one’s control so that it is impossible to use it privately. They said:

“With respect, we cannot see that the words of the statutory instrument can be forced into that meaning. We prefer the approach of the Tribunal in Aldam [John Charles Associates v Commissioners of Customs and Excise [1998] V & DR. 425], who felt that “make available” must mean more than “be available”; even if there is a presumption that [Mr. Upton] intended that the car should be available, there is no evidence whatever to suggest that he intended to make it so.”

12. Finally the Tribunal rejected an argument of the Commissioners that the statutory instrument should be construed purposively to restrict the possibility of many taxable persons being able to obtain deductions for input tax, saying:

“the facts of this case are so very specialised, as regards both [Mr. Upton’s] business and his personal circumstances that we do not see ourselves as opening a great loophole through which hordes of barristers and tax advisers are likely to pour with claims for input tax on Lamborghinis. This is a case that turns entirely on its own facts.”

Accordingly they allowed the appeal of Mr. Upton.

13. On the Commissioners’ appeal to the Vice-Chancellor, he noted that the right to appeal, arising under s. 11(1) Tribunal and Inquiries Act 1992, was limited to points of law. He accepted that if Art. 7 had been properly construed by the Tribunal, the appeal to him must fail. He observed that it was common ground that the tests imposed by paras. (2E)(a) and (2G)(b) were cumulative in the sense that the latter was not merely the converse of the former. He thought it clear that para. (2G)(b) was not mere surplusage but added a further condition.
14. The Vice-Chancellor said (at p. 917g) that the test prescribed in both paras (2E)(a) and (2G)(b) was one of intention as to the future use of the car. He continued (at p. 917h):

“The issue is as to the nature of what is intended or what must be intended. In my view that depends on the meaning to be attributed to the phrase ‘make it available’ as used in the context of the regulation as a whole. In the case of a corporate taxable person there can be no question of personal use. Accordingly in that context the phrase requires the court to consider whether the car is available for private use by another and in that event whether the taxable person made it so. Whether the second part of the test is satisfied will be a question of fact for the tribunal. The mere fact that the first part is satisfied will not be enough. But where the taxable person is an individual or partnership the range of possible personal users includes the taxable person himself. This was recognised by the draftsman. He dealt with it by including in para (2G)(b) the parenthetical clause ‘(including, where the taxable person is an individual, himself, or where the taxable person is a partnership, a partner)’.”

15. The Vice-Chancellor then referred to the Commissioners’ submission that if the car is available for private use, para. (2G)(b) applies unless the taxpayer intends to make arrangements sufficient to exclude his or others’ private use, as otherwise the test in para. (2G)(b) would be a mere repetition of para. (2E)(a). The Vice-Chancellor continued (at p. 918b):

“The inclusion of a parenthetical clause, as in this case, would not normally alter the meaning of the provision into which it is inserted though what is required to satisfy it may well be different. Accordingly it is still necessary to consider whether, given that the car is available for private use, the taxable person intends to make it so. It is not suggested that Mr Upton made or intended to make any arrangements to allow or exclude his personal use. There is no suggestion of any action such as the word ‘make’ normally applies. Counsel for Mr Upton submits that in those circumstances the relevant question ‘Did Mr Upton intend to make the Lamborghini available for his private use?’ must be answered in the negative. But the concept of a taxpayer taking any positive action to make his own property available for his own private use is unreal. If it is his property and is available for private use by him what more is there to be done? In my view the article is unworkable if in the case of personal use by the taxable person it is necessary to show that he intended to take any positive action to make his own property available for private us by himself. The interpretation of legislation imposing liability to tax does not require the court to give so literal interpretation to a regulation as to make it unworkable. Nor in my view does the use of the word ‘make’ require it to do so.

In the case of private use by a third party a car which is intrinsically capable of private use will not be available for that use unless the taxable person as its owner takes some steps to make it so. But in the case of private use by the taxable person the consequence of his acquisition of the car will be to make it available for his private use unless he takes positive steps to remove it.

Accordingly in my judgment the requirement of para (2G)(b) that the taxable person intends to make the car available for his own private use will be satisfied if , on the acquisition of the car, he intends not to take any step to exclude the necessary consequence of his ownership. In other words a car may be ‘made available’ if it is available in fact and the owner does nothing to prevent its private use by himself.

It is clear that the tribunal did not apply that test. In para 13 they concluded that Mr Upton did not intend to use it privately. In the same paragraph they recognised that it was available for private use and that Mr Upton did not intend to take steps to exclude that possibility. Likewise in para 16 they concluded that an intention that the Lamborghini should be available for his private use was not enough because there was no evidence that he intended to make it available for such use. Had they applied what I believe to be the correct test then they must have determined that Mr Upton had intended to make the car available for his private use.”

16. The Vice-Chancellor accordingly allowed the appeal.
17. On this appeal Mrs. Hamilton for Mr. Upton submits that the Vice-Chancellor erred in law in relation to para (2G)(b) in applying a test of whether the taxable person had intended to take positive steps to make the car unavailable for private use. She further submits that the Vice-Chancellor addressed his mind to the fact that the car was available rather than to whether the taxable person intended to make it so. She accepts that there is a very heavy evidential burden on an individual taxable person to establish that he does not intend to make the car available for his private use but she submits that what is the intention of the taxable person is a question of fact for the Tribunal. She further argues that the Vice-Chancellor was wrong to say that in para. 13 the Tribunal recognised that the car was available for private use and that Mr. Upton did not take steps to exclude that possibility. On the contrary, she says, he did take steps by making the enquiry as to whether he could insure the car for business use only.
18. Mr. Paines Q.C. for the Commissioners submits that the Vice-Chancellor reached the right conclusion for the right reasons.
19. The skeleton argument for the Commissioners contained a contention that the history of the predecessor legislation to the 1992 Order and the history of the 1995 Order supported the construction contended for by the Commissioners and that the principles of Pepper v Hart [1993] AC 593 allowed us to have regard to certain statements by Ministers in Parliament in relation to the 1995 Order. That prompted Mrs. Hamilton to essay what she called a pre-emptive strike against that contention by arguing that a different approach was required by European law. Mr. Paines, however, in his oral submissions wisely did not seek to support that contention. It is sufficient to say of Mrs. Hamilton’s argument that I was wholly unpersuaded that there is anything in European law which compels this court to give the 1992 Order as amended a construction other than the meaning which is arrived at by giving it a fair reading.
20. As I understand the scheme of paras. (2E)(a) and (2G), the condition that the taxable person intends to use the car exclusively for the purpose of a business carried on by him is qualified by the words “but this is subject to paragraph (2G) below”. In other words the test of intention to use the car for the exclusive business purpose only applies to the extent that it is not made inapplicable by para. (2G). That is confirmed by the wording of para. (2G) which is in negative form and deems a taxable person not to use a car exclusively for the purpose of a business carried out by him if, but only if, he has the intention specified in subparas. (a) or (b). Unless the taxable person is found to have that intention, the test in para. (2E)(a) of intention to use the car exclusively for business purposes will apply unqualified, and if that test is satisfied, “the relevant condition” is satisfied. The intention specified in para. (2E)(a), viz. to use, is not synonymous with the intention specified in para. (2G)(b), viz. to make available for use, nor does an intention to use a car exclusively for business purposes exclude the possibility of an intention to make the car available for private use.
21. It is plain that the test for the disqualifying condition of para. (2G)(b) is of intention at the time of acquisition. The fact that a car is available or is made available to a person for private use subsequent to the acquisition is not determinative. However, that fact may be highly relevant to an inference that the taxable person has the intention to make the car available to himself for private use. I do not think that the Vice-Chancellor can fairly be criticised as having addressed the fact of the car’s availability to Mr. Upton for private use rather than his intention to make it so available. On the contrary he makes it clear that the issue is as to the nature of what is intended and that he had to consider whether, given that the car was available for private use, the taxable person intended to make it so.
22. I own to having been troubled at one time that the Vice-Chancellor was construing the language of para. (2G)(b) by rewriting the words “if he intends to .... make it available .... to any person .... for private use” so as to mean “unless he intends to .... take positive steps to make it unavailable .... to any person .... for private use”, and that either such a construction was limited to the case of the individual taxable person intending to make the car available to himself for personal use, in which case the same words had a different meaning in their application to other taxable persons and other circumstances, or the rewriting applied to all taxable persons, in which case it was hard to justify the rewriting in circumstances other than where the individual taxable person was intending to make the car available to himself for personal use. However, I am persuaded by Mr. Paines that the Vice-Chancellor was not attempting any such rewriting nor was he giving a different meaning to the words of para. (2G) in differing circumstances. Rather the Vice-Chancellor was recognising that in the case of an individual taxable person who acquires a car there is a particular difficulty in the way of that person if he is to escape from the disqualifying condition that “he intends to .... make it available to .... himself .... for private use.” The very fact of his deliberate acquisition of the car whereby he makes himself the owner of the car and controller of it means that at least ordinarily he must intend to make it available to himself for private use, even if he never intends to use it privately. The Vice-Chancellor appeared to contemplate that there might be ways in which that result could be avoided by action taken by the individual taxable person such as would lead to the inference that the relevant intention was absent. But whether or not that possibility is a real one, the Vice-Chancellor thought it plain that in the present case there was no material to enable the Tribunal to conclude that Mr. Upton did not intend to make the car available to himself for private use. The Vice-Chancellor was therefore giving the same meaning to the language of para. (2G)(b) in relation to Mr. Upton as he would give to that language in relation to, say, a corporate taxable person, but he was recognising the peculiar problem posed for an individual taxable person acquiring a car.
23. The Tribunal appear not to have recognised the difficulty but to have treated the test of para. (2G)(b) as being in effect the same as that of para. (2E), so that if the taxable person intends to use the car exclusively for the purposes of a business carried on by him, he could not intend to make it available to himself for private use: hence their emphatic finding in para. 13 that Mr. Upton did not intend to use the car privately and in para. 15 their seeing force in the submission that para. (2G) was mere surplusage. It is also reflected in the fact that nowhere do the Tribunal say that Mr. Upton did not intend to make the car available to himself for personal use. The closest they get to it is in the final sentence of para. 16 when they say that there is no evidence whatever to suggest that he intended to make the car available. The Tribunal’s concluding remarks are, with respect, not easy to follow. But what is plain is that the Tribunal did not recognise that Mr. Upton’s deliberate action in acquiring the car and obtaining insurance permitting private use was to make the car available to himself for private use and that he must be taken to have intended that result in the absence of evidence to the contrary, even if he did not intend to use the car privately. In my judgment, the Tribunal erred in law in their approach to, and application of, the disqualifying condition of para. (2G)(b).
24. Mrs. Hamilton’s criticism of the Vice-Chancellor’s remarks in the propenultimate sentence in the second passage which I have cited from his judgment seems to me to have some force, at any rate where he says that the Tribunal recognised in para. 13 of their decision that Mr. Upton did not intend to take steps to exclude the possibility of private use. With respect to the Vice-Chancellor, I do not think that para. 13 contains any such recognition. His statement that the Tribunal recognised in para. 13 that the car was available for private use is, I think, his assessment that the facts found in para. 13 (Mr. Upton’s purchase of the car, its garaging near his home, his access to its keys, and that he has no other car for private use) amount to such recognition. But I am quite unable to see that upholding Mrs. Hamilton’s criticism to that limited extent can avail Mr. Upton. The only step to exclude availability for private use which she suggests Mr. Upton took was the enquiry about excluding private use from his insurance policy, but, as the Tribunal appears to have found, private use was not in fact excluded by Mr. Upton from his policy.
25. In these circumstances I conclude that the Tribunal did err in law and that the Vice-Chancellor reached the correct conclusion. I would dismiss this appeal.

Lord Justice Buxton :

26. I gratefully adopt the statement of the facts of the case and the issue in the appeal set out by Peter Gibson LJ. Like him I would dismiss the appeal, and for the reasons that he gives. Because we are differing from the view of the specialist VAT tribunal, I venture to add some very few words of my own.
27. The appeal turns on the true construction, and the application of that construction to the facts of this case, of the expression

“intends to….make it available…for private use”

in paragraph (2G) of the Input Tax Order. The implications of that task were, with respect, accurately set out by the Vice-Chancellor, [2001]STC at p917h:

“The issue is as to the nature of what is intended or what must be intended. In my view that depends on the meaning to be attributed to the phrase ‘make it available’ as used in the context of the regulation as a whole.”

28. The first issue is, therefore, what the draftsman meant by “make available for use.” That is an ordinary English expression, deliberately different from “use” itself. An object can be available for use without there being any present intention of actually using it; just as, for instance, a person can be available for, say, military service without there being any intention that he should serve or be asked to serve.
29. The question has to be decided as at the moment of acquisition of the car. On the facts of the present case, I see no escape from the conclusion that the car was at that moment, as a matter of fact, available for Mr Upton’s private use, however little he then had any intention of actually so using it. He had sole control over the car. It was not to be disabled or in any other way put beyond use: quite the reverse, since the whole purpose of buying it was so that it could be used, albeit in the business and not privately. A further way of testing this point, if it needs further exposition, would be to ask whether the car was available for Mr Upton’s use, generally stated. That question answers itself. And Mr Upton did not restrict the general nature of that availability by deciding that he would only use the car for one of the two purposes for which at the time of purchase it became available.
30. Further, I see no escape from the conclusion that Mr Upton had made the car available to himself. He did that, tautologically enough, by providing himself with ownership and control of the car. And, as we have seen, the availability that was created was availability for private as well as for business use.
31. Did Mr Upton at the moment of purchase intend to make the car available to himself for private use? The question is not whether he intended to use it, but whether he intended to make it available for use. That again seems to me to lead to a short answer. The first question, of whether what was done constituted a making available for private use, is answered, in the terms urged above, by analysis of what Mr Upton did in the context of the true construction of the statutory concept of making available for private use. Mr Upton unquestionably intended to do the acts that, on that true construction, constituted the making available of the car for private use. He therefore necessarily intended to make the car so available, by intending to do the acts that constituted making the car available for use. He cannot escape from that conclusion by saying, as he does, that he did not intend actual use; or that, for that reason, he did not regard the car as available for his use. If he intends to do the acts that are in law the state of affairs referred to in the statute, then he intends that state of affairs as statutorily defined.
32. The Tribunal did not properly address this question, because they plainly thought that the question for them was, and was only, whether Mr Upton intended to use the car privately: see paragraph 13 of the Decision. But as we have seen, the Regulation directs itself at something quite different, the making available for use. For that reason, therefore, I cannot accept Mrs Hamilton’s submission that the appeal is concluded by the finding of fact made by the Tribunal.
33. The Vice-Chancellor was assisted to his conclusion by examination of the three cases addressed by the Regulation: the making available to a third party; to a partner; and to the taxpayer himself. Like Peter Gibson LJ in paragraph 22 of his judgement, I am satisfied that the Vice-Chancellor applied the same general test in all three cases: that is, whether as a matter of fact the taxpayer had intentionally done acts or made arrangements that constituted the making available of the car for private purposes. He however recognised that the implications of the very act of acquiring the car will be different, according to whether it is said thereby to be made available to another person, on the one hand; or to the taxpayer himself. The Vice-Chancellor therefore said, [2001] STC at p 918e:

“In the case of a private use by a third party a car which is intrinsically capable of private use will not be available for that use unless the taxable person as its owner takes some steps to make it so. But in the case of private use by the taxable person the consequence of his acquisition of the car will be to make it available for his private use unless he take positive steps to remove it”

34. That distinction is, with great respect, entirely correct as a matter of the factual implications of a mere purchase of a vehicle. It therefore followed that if, at the time of purchase, the owner’s intentions did not include the taking of any steps to exclude what the Vice-Chancellor, [2001] STC at p918f, called the necessary consequence of his ownership, then that necessary consequence indeed followed: that the car was available for his use . I do not think that this analysis involved the writing into the Regulation of any requirement that is not there to be found, nor did it apply a different test in the case of the man who makes the car available to himself, as compared with the man who makes the car available to a third party. Rather, it simply recognises the particular factual implications for the Regulation of a purchase of a car that is to be available to, and used by, the purchaser himself.
35. I readily recognise that it will be difficult for a man who purchases a car for business use as a sole trader to demonstrate that he did not thereby make the car available to himself for private use also. The cases suggested by the Commissioners in which that might be achieved lacked conviction. I do not, however, think that we should seek to alleviate the position of the sole trader by allowing ourselves to be driven to a construction of the Regulation that it does not otherwise bear. A sole trader such as Mr Upton does have difficulty in establishing that he has not made available to himself for private use, and therefore did not intend to make available to himself for private use, a vehicle that he intended on purchase to have immediately available to him for business use. That however demonstrates, not the unreasonableness of the Regulation, but rather the unusual nature of the arrangements made by Mr Upton: arrangements that the Vice-Chancellor, in my respectful view rightly, held not to have offset the intrinsic nature of his purchase, ownership and sole control of the vehicle.

Mr Justice Neuberger:

36. I, too, gratefully adopt Peter Gibson LJ’s analysis of the facts, the procedural history, and the legislative provisions. I agree with his reasons and those of Buxton LJ. However, for the same reason as Buxton LJ, I would like to explain why I think this appeal should be dismissed.
37. The essential features of this case are as follows. First, the Tribunal found that Mr Upton had purchased the Lamborghini motor car exclusively for the purpose of his business, which he carried on as a sole trader. Secondly, although Mr Upton kept the Lamborghini in a garage near his home and retained the keys, he did not intend to put it to private use at the time of its acquisition. Thirdly, there was no suggestion that, at the time of its acquisition, Mr Upton intended to take any steps which would either legally or physically prevent him from putting the Lamborghini to private use. Fourthly, for what it is worth, there is nothing to suggest that Mr Upton’s intentions at the time he purchased the Lamborghini changed at any time thereafter: quite the contrary.
38. On those facts, the Tribunal found that Mr Upton satisfied the requirements of paragraphs 7(2E) and 7(2G) of the Order. The Commissioners’ appeal to the High Court was based on the contention that this conclusion was not open to the Tribunal on the findings of fact it had made, essentially on the ground that the Tribunal actually, or must have, misinterpreted the provisions of paragraph 7(2G)(b). The issue raised before the Vice-Chancellor, and in this Court, is a question of the construction of paragraph 7(2G)(b).
39. The question the Tribunal had to ask itself under paragraph 7(2G)(b) was whether, at the time Mr Upton purchased the Lamborghini, “he intend[ed] to… make it available to any person (including… himself…) for private use”. The concept of making an article available to oneself for a specific use is strange, and the strangeness is not lessened by the fact that the question to be determined is not whether the taxpayer made the article so available, but whether he intended to make it so available.
40. Ignoring, for the moment, the unusual concept of a person making his own property available to himself, what does the provision mean when it refers to an intention to make a motor car available to a person other than the taxpayer for private use? In this connection, it is important to bear in mind, as Mr Paines QC says, that paragraph 7(2G)(b) does not refer to an intention that the motor car be put to the use in question: the intention must be to make it available for that use. The difference between the two concepts appears to me to be emphasised by the contrast with paragraph 7(2E) which requires the taxpayer to show that he “intends to use” the motor car exclusively for business purposes.
41. If an article is supplied by one person to another with no physical or legal restraint as to a particular use, then it appears to me that, as a matter of ordinary language, the article has been “made available” for that use. The fact that neither the supplier nor the recipient expects, or even intends, the article to be put to the particular use does not prevent the article being “available” for that use, if there is no physical or legal restraint on such use by the recipient. Further, it cannot be said, at any rate as a matter of ordinary language, that the supplier does not “make” the article available for that use, simply because he does not expect or intend it to be put to that use. If he supplies the article so that it is, as a matter of fact, available for a particular use, then he has, in normal parlance, made it available for that use. On the other hand, if the supplier provides the article under a contract which bona fide precludes the recipient from putting it to a particular use, or if it is supplied only at such times that it cannot be put to a particular use, then there is clearly a powerful argument for saying that it has not been “made available” for such use.
42. The fact that the article is also made available for other purposes, even primarily for other purposes, does not alter this conclusion. If a motor car or other article is supplied to a recipient in circumstances where he can put it to, among other uses, private use, then, as I see it, as a matter of ordinary language the supplier “make[s] it available… for private use”. That appears to me to be reinforced in this case by the absence in paragraph 7(2G)(b) of the word “exclusively”, found in paragraph 7(2E)(a). Paragraph 7(2G)(b) requires one to consider the intention of the taxpayer with regard to making the motor car available for a particular use. Accordingly, to my mind, the proper enquiry is, as the Commissioners contend, whether the taxpayer intends to supply the motor car to a third party in circumstances where it could be available for private use. The intention in question is concerned with the basis on which the motor car is to be made available to the recipient, not with the use to which the motor car is to be put by the recipient.
43. I do not consider that this conclusion renders paragraph 7(2G)(b) otiose over paragraph 7(2E)(a), as was suggested by Mrs Hamilton. The point may be illustrated by an example. A company purchases a motor car for a sales director, who has made out a compelling case for needing it for his work during the day. If the motor car was provided to the director on the basis that he retains possession of it the whole time, without any conditions or restrictions, then it will have been made available for his private use. That would not alter the fact that paragraph 7(2E)(a) was satisfied: the only reason the company would have acquired (and supplied the director with) the motor car would have been for the purpose of its business. However, that does not call into question the conclusion that, on these facts, it would nonetheless be available to the director for private use.
44. In these circumstances, given that one is required to consider the taxpayer’s intention at the time of the purchase of the motor car, it seems to me that, where a company acquires a motor car with a view to providing it to, say, a director, with no legal or physical impediment on private use, the company would be intending to make the motor car “available… for private use”. The fact that the company may not intend, and may not even want, the motor car to be put to such a use is not in point. By intending to provide it for use by a director, who will be legally and physically free to put it to private use, the company is intending to make the motor car available to him for private use.
45. I have so far concentrated on the case where a taxable person acquiring a motor car is a company, which is intending to provide the car for use of a third party, typically a director or employee. It seems to me that the meaning and effect of paragraph 7(2G)(b) should be the same, if at all possible, whatever the respective juridical natures, or the coincidence or otherwise of identity, of the taxpayer supplier by whom, and the recipient to whom, the motor car is to be made available. In light of the provisions of paragraph 7(2G)(b) one is required to ask on the facts of the present case, whether, at the time that he acquired the Lamborghini, Mr Upton “intend[ed] to… make it available… to… himself… for private use”. Both as a matter of ordinary language, and in light of the above analysis where the taxable person acquiring the motor car is different from the user, it appears to me that the answer to that question is that Mr Upton did intend to make the Lamborghini available to himself for private use.
46. As to ordinary language, Mrs Hamilton’s argument that, at the time of acquisition, Mr Upton had a firm and settled intention never to use the Lamborghini for private use, seems to me to miss the point. The issue is not whether, at the date of acquisition, Mr Upton intended to use the Lamborghini for private use. If that had been the question, then, on the facts as found by the Tribunal, one can understand how they could have concluded that Mr Upton escaped the consequences of paragraph 7(2G)(b). However, the issue is whether Mr Upton intended to make the Lamborghini available for his private use. As Buxton LJ said during argument, at the moment Mr Upton purchased the Lamborghini, it was, as a matter of fact, available for his private use, and that situation never changed. As he presumably intended at the time he acquired the Lamborghini, Mr Upton has always kept it in a garage near his home, and he has retained the keys. Therefore, as a matter of fact, the Lamborghini has been available for him to put it to whatever lawful use he has wanted, including, in particular, private use. The fact that he has never intended to take advantage, and has apparently never taken advantage, of that availability, does not impinge on that conclusion. As a matter of fact, the state of affairs which has prevailed ever since Mr Upton acquired the Lamborghini is that it has been available for his private use, and all aspects of that state of affairs were intended by Mr Upton at the date he acquired the Lamborghini.
47. The same conclusion is indicated if one contrasts the facts of the present case with the case of a motor car being acquired by a company for the use of a director. For the reasons discussed above, it seems to me that if the company simply makes the motor car available to a director, without imposing any legal or physical restriction on its use, then, while the company’s only concern and interest may be that the motor car is used by the director in connection with the company’s business, that would not alter the fact that the motor car was made available to the director for private use, within paragraph 7(2G)(b). Accordingly, where, as in the present case, a sole trader acquires a motor car for his own use, in circumstances where he does not intend to impose any physical or legal restriction on his ability to make private use of it, logic and consistency would suggest that, for the purpose of the same paragraph, the motor car is intended to be made available for his private use, irrespective of the fact that he does not intend to take advantage of that availability.
48. Accordingly, I have reached the same conclusion as the Vice-Chancellor, for the same reasons. A point that gives pause for further thought is that the consequence of this conclusion may be to render it very difficult for a sole trader, who acquires a motor car exclusively for his business, thereby satisfying paragraph 7(2E)(b), to avoid falling foul of paragraph 7(2G)(b). It was suggested on behalf of the Commissioners during argument that, if a sole trader acquired a motor car for the sole use of employees in his business, and arranged for the motor car to be housed some distance away from his home, and for the keys to be kept by an employee, with a view to its only being used for business purposes, the motor car would not thereby be made available for private use. I find that difficult to accept. The person in control of the motor car and of the keys would be an employee of the trader, and could be compelled to provide him with the motor car and the keys for whatever purpose the trader chose. Accordingly, while it is unnecessary to express a concluded view on the point, I think that the logical consequence of the Vice-Chancellor’s decision is that a sole trader who purchases a motor car with that sort of arrangement in mind would not avoid the consequences of paragraph 7(2G)(b).
49. The Commissioners contended, as the Vice-Chancellor recorded, that a motor car would not be available for private use if it were:

“Physically unavailable, that is to say a car let to another, or is realistically incapable of private use, for example marked police cars or ambulances, or alternatively is insulated from the possibility of private use, that is to say pool cars issued to employees for business use only” – see at [2001] STC 917C.

As already indicated, I have some difficulty with the last example, at least where the taxpayer who has acquired the motor car is a sole trader. However, as mentioned, I think it is also possible that a legal impediment to private use, so that such use would be unlawful, might also amount to unavailability for private use. An obvious example would be where a motor car was only insured for business use. However, it is unnecessary to decide whether that would be sufficient to enable a sole trader taxpayer to avoid the effect of paragraph 7(2G)(b). Even if only physical unavailability will do, I do not think the fact that the Vice-Chancellor’s decision would lead to it being difficult for a sole trader to be able to take advantage of paragraph 7(2E) justifies a different conclusion from that which he reached.

Order: Appeal dismissed, no order as to costs. (Order does not form part of the approved judgment)