QUEENS BENCH DIVISION
London, WC2A 2LL
B e f o r e :
| R (on the application of GERARD MARTIN CHURCHHOUSE)
|- and -
|THE COMMISSIONERS OF INLAND REVENUE
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Gerard Clarke (instructed by the Solicitor of Inland Revenue) for the Defendants
AS APPROVED BY THE COURT
CROWN COPYRIGHT ©
Crown Copyright ©
Mr Justice Munby:
"viperous vermin [who] under the reverend mantle of law and justice instituted for protection of the innocent, and the good of the Commonwealth, did vexe and depauperize the Subject, and commonly the poorer sort, for malice or private ends, and never for love of justice".
"The execution of a law cannot be enforced, unless the violation of it be denounced; the assistance of the informer is therefore altogether as necessary and as meritorious as that of the judge ...
The reward paid to the informer has for its object, the service he has performed; in this respect, he is upon a level with the judge who is paid for passing sentence. The informer is a servant of the government, employed in opposing the internal enemies of the state, as the soldier is a servant employed in opposing its external foes ...
It is extremely difficult to eradicate prejudices so deeply rooted and natural. From necessity, the practice of paying public informers continues to be in use; but the character of an informer is still regarded as disgraceful, and by some strange fatality the judges make no efforts to enlighten the public mind on this subject, and to protect this useful and even necessary class of men from the rigour of public opinion. They ought not to suffer the eloquence of the bar to insult before their faces these necessary assistants in the administration of justice. The conduct of the English law towards informers furnishes a curious but deplorable instance of human frailty. It employs them, oftentimes deceives them, and always holds them up to contempt.
It is time for lawgivers at least to wean themselves from these schoolboy prejudices which can consist only with a gross inattention to the interests of the public, joined to a gross ignorance of the principles of human nature."
"informers are seldom inspired by pure public spiritedness but are often motivated by spite, envy or the desire for reward."
"I have now heard from my colleague who has stated that he is grateful for the information supplied by yourself in respect of this company. However he considers that the information will not lead to the recovery of any additional revenue. As you will appreciate I am not able to provide a detailed explanation of the reasoning behind this decision without impinging on the confidentiality of the company's affairs.
In view of my colleague's comments I regret that the Board of Inland Revenue are not able to exercise their discretion and recommend the payment of a reward to you."
"My colleague is certainly grateful to you for the information you have forwarded. Much of it provided confirmation of information obtained from other sources. Whilst a great deal of the balance represented historic information relating to the company. (The Taxes Management Act 1970 limits the circumstances under which the Revenue can review earlier periods of trading and therefore the majority of the historic information could only be used for background purposes to the company).
It is the view of the Inspector dealing with the company's affairs that the information you have supplied, insofar as it might relate to additional tax liabilities, either confirms information he already holds, or relates to periods which he is unable to review. In his view therefore no additional tax would be recoverable solely on the basis of this information."
"You clearly believe very strongly that the information which you provided to the Revenue about [X]'s corporate affairs helped us to recover tax from the company. For reasons which you appreciate, I cannot give you any information about [X]'s tax affairs. However, I have looked through the Inland Revenue's papers for the company for the relevant period, from both our Bristol office and our International Division. I have to say that I must endorse the view that others have taken, that your information does not qualify for a reward, whether you take the wording of the policy on rewards as set out in 1997 or in more recent Parliamentary answers."
"As regards the policy for paying rewards to informers, I quite accept that the policy should be as set out in the Parliamentary Answers which you received from me in last October and February. That is to say, that a reward may be paid where tax is recovered as a result of information provided to the Inland Revenue. The Inland Revenue's view, however, is that Mr Churchhouse does not qualify for a reward on this criterion. You said in your letter to Gordon Brown that the information which Mr Churchhouse provided was vital and resulted in the Revenue recovering very substantial amounts of corporation tax. The Revenue does not accept that.
I am very sorry that this difference of view exists between Mr Churchhouse and the Revenue. They have considered his case at a very senior level in the Department and cannot see any way of accepting his contentions. The rules of tax confidentiality mean that the Revenue are unable to tell Mr Churchhouse anything about how they have handled [X]'s tax affairs. This makes it impossible for them to explain the detailed circumstances in which, and the reasons why, they have reached their decision. This no doubt makes the decision more difficult for Mr Churchhouse to accept."
"We beg leave to bring under the consideration of Your Lordships the present arrangements for granting rewards to persons by whom frauds upon the Revenue have been detected with a view to such alterations being affected therein as the changed circumstances under which payments under this head are now made and to which we here propose to advert may seem to call for.
By Your Lordships letter of the 9th September 1848 we were authorized to assign to deserving Officers in our service by way of rewards such a sum as would not in the aggregate exceed the moiety of the total net penalties recovered and until a recent date Informers not in Revenue employment were legally entitled to a moiety of the net proceeds of each particular case in which they were interested. Since the date of Your Lordships letter of September 1848 the expenditure of the Department under our control has been made subject to a vote of Parliament and the amount required for rewards is now annually specified in the Estimates and duly sanctioned by your Lordships. The Act 31 and 32 Vic. cap. 124 has also been passed and under its provisions the whole amount of penalties etc. recovered in cases relating to Inland Revenue are now payable to the Crown and all expenses and rewards connected with such cases become chargeable upon the supply granted by Parliament. Your Lordships will perceive that the effect of this enactment is to impose upon us the duty of assigning to Police Officers and other Informers who formerly were legally entitled to claim a moiety of the penalties recovered.
We should not because of the foregoing considerations merely have desired to disturb the present arrangements under which we obtain from month to month the formal sanction of Your Lordships for the payment of rewards; but, since the conversion of the Assessed Taxes upon servants, horses, dogs, etc. into duty of Excise the number of cases of prosecution to be deal with by us has so enormously increased as to cause considerable delay in the issue of rewards and consequently not only much dissatisfaction on the part of the recipients of the same but also great inconvenience to the Department.
We submit for the consideration of Your Lordships whether under the circumstances it would not be advisable that these monthly applications to your Lordships should be dispensed with and that we should have a general authority from your Lordships to pay henceforward from time to time such sums by way of rewards as we may deem fit so long as the total amount fixed in our annual Estimate under this head be not exceeded." (emphasis added)
"With reference to your report of the 30th ultimo in which you advert to the present arrangement for granting Rewards for the detection of frauds upon the Revenue with a view to such alterations being effected therein as the changed circumstances under which payment on this account are now made seem to call for, I am directed by the Lords Commissioners of Her Majesty's Treasury to state that my Lords are pleased to approve of your suggestion that the monthly applications to this Board should be dispensed with, and They authorise you to pay henceforward from time to time such sums by way of rewards as you may deem fit, so long as the total amount fixed in your Annual Estimate under this head, be not exceeded, but I am at the same time to state that My Lords would be glad to be furnished at the termination of each quarter with a statement showing the amount of the penalties recovered in such quarter and the amount of the rewards paid out of the vote of Parliament."
"The Commissioners may at their discretion reward any person who informs them of any offence against any Act relating to inland revenue or assists in the recovery of any fine or penalty, provided that a reward exceeding fifty pounds shall not be paid in any case without the consent of the Treasury."
"All costs, charges, and expenses payable by the Commissioners in respect of proceedings for the recovery of any fine, penalty or forfeiture incurred under any Act relating to inland revenue, and all sums of money allowed as rewards, shall be deemed to be charges of collection and management, and shall be paid out of money provided by Parliament for that purpose."
"the value of the result of the information … may prove to be nothing for reasons of which the informer may be totally unaware, eg, that the Inland Revenue authorities may already be in possession of much of the information which the informer believes to be confined to himself."