QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
1 Oxford Row Leeds West Yorkshire LS1 3BG |
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B e f o r e :
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THE QUEEN on the application of GOLDING |
Claimant |
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GENERAL COMMISSIONERS OF INCOME TAX |
Defendants |
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HER MAJESTY'S REVENUE AND CUSTOMS |
Interested Party |
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Mr Sachdeva (instructed by the Treasury Solicitor) appeared on behalf of the Defendant.
Mr Serr (instructed by HMRC) appeared on behalf of the Interested Party
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HHJ Behrens:
"I am not sure what you expect me to say [this is Mr Guy talking] further about the loss claim. [That of course is the claim to which I have referred]. My letter of 6 December complained I have not seen any documentary evidence that the loss was incurred by Mr Agus on a personal basis.
The documents I hold indicate the loss was in fact suffered by West Riding Live Events Limited. [It should have been West Yorkshire Live Events, but nothing turns on that.] No accounts have been submitted for the company which went into liquidation on 25 April 2007.
The claim for losses will, in the absence of any further documentary evidence in support of the claim that the loss was incurred by your client personally, be formally refused when my enquiry is closed.
In order that there is no doubt in your mind, I confirmed that I do not accept the loss claim of £100,000 in its entirety. I do not accept any loss claim for either 2005 and 2006/2007."
"(1) Your client allegedly appears to have returned less income than he should have according to the CIS returns HMRC holds; and
(2) There is a loss claim, which at face value seems a little out of your client's normal trading activities. HMRC are duty bound to ask for reasonable evidence to substantiate the claim."
"1. To request a hearing for a Closure Notice within one week of the enquiry being opened is highly unusual and inappropriate in this case.
2. None of information requested by HM Revenue and Customs in their letter dated 31 July 2008 has been officially provided.
3. There has been no undue delay on the part of the Revenue in opening the enquiry.
4. The Commissioners did not accept on the evidence before them that the Enquiry inspector was acting in bad faith or had any ulterior motive."
(1) that there was hostility from the chairman;
(2) that Dr Milton had written to the defendant expressing concerns at the suitability of the Wakefield bench having been commissioners who had heard another case in which he had been involved;
(3) that the chairman had accepted that Mr Guy had expressed a clear bias;
(4) that the claimant was due to appear as a witness in the Agus appeal;
(5) that the defendant knew that he had sent Dr Milton 44 pages of documents from the Agus case. This showed completely unreasonable conduct on the part of Mr Guy and clear bias by Mr Guy against Mr Agus, whose case turned on identical facts, which confirmed that the same bias must extend to the claimant.
(6) that the bias was accepted by the chairman;
(7) that his opening address was most abruptly curtailed so he could not explain all the facts of the appeal;
(8) that he intended to make various statements when he was required to move on;
(9) that he was not permitted to introduce 44 pages of evidence in relation to the Agus case and 25 pages of evidence or more relating to the Backhouse case;
(10) that he became confused;
(11) that he exchanged looks with the clerk when Dr Milton was making his submissions;
(12) that the Inspector of Taxes conducting the case on behalf of the Revenue was permitted to adduce a skeleton argument which Dr Milton had not seen before;
(13) that the inspector, Mr Smith, was permitted to make submissions about the Agus case; that he was prevented from adducing evidence of bad faith.
MR SACHDEVA: My Lord, would you give me half a minute to take instructions? (Pause)
MR SERR: Your Honour, whatever my learned friend is contemplating (inaudible) does not certain the interested party or my clients. Can we be discharged?
JUDGE BEHRENS: You are content for me to deal with what may well be an application for permission to appeal in your absence? I would not be in the least surprised if there was one.
MR SERR: My Lord, before I make any --
JUDGE BEHRENS: As far as I am concerned you may be released immediately. If you have no application you wish to make, you may go.
MR SERR: I have no application to make and I am not sure as an interested party I would have any say on an application for permission to appeal.
JUDGE BEHRENS: You have my permission to leave.
MR SERR: Thank you. (Counsel left court) (Pause)
MR SACHDEVA: My Lord, I have an application for costs in three parts. The first is the simplest part, which is our costs in principle for the claimant. The second aspect to it is that we are here on an indemnity basis. And the third aspect of it is that we ask for the joinder of Dr Milton as party to this litigation because we intend to make an application for a costs order under section 51 of the Supreme Courts Act which we will undertake to issue relatively shortly, which we hope will lead to an half hour telephone hearing by which the trial judge, your Lordship, can quickly (inaudible) fairly shortly determined rather than with (inaudible) but the essence of that will be that --
JUDGE BEHRENS: I can assure you that there will not be a telephone hearing in relation to that.
MR SACHDEVA: My Lord, be that as it may --
JUDGE BEHRENS: An application under section 51 is to my mind quite an important application. I am not going to stop you from making --
MR SACHDEVA: My current instructions are -- I mean, there is a proportionality issue here given I think -- the costs schedule that I will be handing up I think comes to about £12,000 in total, but that is the third aspect. I am not sure I need to deal with it right now. The only thing I am going to ask your Lordship for was an order joining Dr Milton to the proceedings so that we may make that application. That is all I was going to ask you.
JUDGE BEHRENS: You have to set out in writing the grounds on which --
MR SACHDEVA: Yes. I need to set out the grounds and file witness evidence.
JUDGE BEHRENS: Yes.
MR SACHDEVA: And refer to case law because it is a highly unusual --
JUDGE BEHRENS: I know. I am well aware of all that.
MR SACHDEVA: Indeed, my Lord.
JUDGE BEHRENS: The only question is, you need my permission, do you?
MR SACHDEVA: To join Dr Milton, yes.
JUDGE BEHRENS: Yes, thank you very much.
MR SACHDEVA: Anyway, that is the third aspect. The costs in principle is the first point and in support of that there is a letter in the bundle where we wrote on.
JUDGE BEHRENS: You succeeded.
MR SACHDEVA: Indeed. There it is. Those are the points I wish to make.
JUDGE BEHRENS: Anything you wish to say about costs, Mr Golding?
MR GOLDING: Sir, I cannot afford it.
JUDGE BEHRENS: You cannot afford it?
MR GOLDING: No.
JUDGE BEHRENS: Thank you very much. In my view, this is a case where the defendant has succeeded. There should be an order for costs. It is also a case where Judge Grenfell granted permission. In those circumstances I do not myself think it is an appropriate case for costs on the indemnity basis. There will be an order for costs on the standard basis.
MR SACHDEVA: My Lord, yes. There is the third aspect joining Dr Milton for our application for section 51 (inaudible).
JUDGE BEHRENS: I am prepared to include a fourth element, which might involve in saving money, which is to say that if there were an application before me for a modest interim payment I might be willing to make an order for a modest interim payment, then you can decide whether you wish to go to the trouble of a formal assessment for the balance.
MR SACHDEVA: My Lord, yes.
JUDGE BEHRENS: That is my normal practice. Your letter says your costs are £7,000, so you have gone up £5,000 since your letter.
MR SACHDEVA: I think they say £8,000.
JUDGE BEHRENS: Do they? I read it very fast. It is a letter, attending and the skeleton arguments, is it not?
MR SACHDEVA: This is prior to the skeleton being drafted.
JUDGE BEHRENS: The only letter I've seen. Let me just have a look at it.
MR SACHDEVA: My Lord, yes.
JUDGE BEHRENS: No, it is not. I did say a letter I thought was £7,000.
MR SACHDEVA: It is £7,000.
JUDGE BEHRENS: You show me the letter; I am more than happy to believe I have misremembered it.
MR SACHDEVA: No, no... (Pause) page 65, £7,000.
JUDGE BEHRENS: That is what I thought.
MR SACHDEVA: "Incurred to date are in the region of £7,000".
JUDGE BEHRENS: So what is "to date"? What is the date of that letter?
MR SACHDEVA: That is 15 April.
JUDGE BEHRENS: What are we today?
MR SACHDEVA: We are now 4 May. Can I hand up an updated schedule. (Handed)
JUDGE BEHRENS: Yes.
MR SACHDEVA: My Lord, and the difference essentially is skeletons were not in, the bundle was not done and the hearings had not been attended, so costs have increased substantially since that estimate was put in, but that is only to be expected. And I think we would rather have a summary assessment of these costs rather than it going to detailed assessment and we will ask for that payment. If that is acceptable to the court, otherwise –
JUDGE BEHRENS: When did you serve the schedule?
MR SACHDEVA: Lunchtime today. My Lord, I think the fact is that these costs for a judicial review are extremely modest…
JUDGE BEHRENS: Yes.
MR SACHDEVA: … compared to what they could be had private parties been acting.
JUDGE BEHRENS: I agree with all that.
MR SACHDEVA: I should say that we are quite keen to avoid the expenditure of the costs of a detailed assessment, for instance should it come to that given the real possibility that (inaudible) --
JUDGE BEHRENS: That is why I propose to make an interim payment..
MR SACHDEVA: Indeed. If my Lord is --
JUDGE BEHRENS: … which will have the same effect.
MR SACHDEVA: Indeed, -- to go down that route, I would ask for payment on account of I think £6,000 because there is no realistic prospect that we will -- unless there are some serious flaws in the schedule and we suggest there are not.
JUDGE BEHRENS: Thank you. I take the view, Mr Golding, there is no possibility of the costs that you being ordered to pay be less than £6,000. I hesitate to say this because of embarrassment to (inaudible) but I think they will rather more than £6,000. I propose to order a detailed assessment of the defendant's costs, but to order under I think 44.3(8) that there be an interim payment of £6,000, payable within 14 days.
MR SACHDEVA: I am most grateful, my Lord.
JUDGE BEHRENS: I also propose -- Do you want to say anything, Dr Milton, before I decide whether to -- the effect of joining you raises the possibility that there will be an application against you for an order for costs of these proceedings.
DR MILTON: I am saying it should not take place, my Lord. I have worked on this case without charge at all. I have not charged Mr Golding a single penny. I have merely done this to assist him at his request. I have not acted unreasonably. I am simply Mr Golding's friend and accountant. To make me responsible for the cost in the case, I suggest, would be extremely unfair given that I have simply been helping Mr Golding as a friend and, as I have said, have not charged one penny for anything that has been done, even the Commissioners hearing. In the conduct of the investigation I have acted completely voluntarily.
JUDGE BEHRENS: Anything you want to say about that, Mr Sachdeva?
MR SACHDEVA: My Lord, all I seek is an order enabling us to make the application. The merits of the application are not before the court at the moment, unless it is clearly unfounded. The basis on which the application will be made, if it is made, is that Dr Milton went beyond merely the role of an adviser and in some sense, in his own words, entered into this litigation as a joint enterprise. It was not simply the legal adviser leaving it down to the claimant to decide what to do at each stage. The only evidence in support of this case came from Dr Milton, not the claimant. Dr Milton was the only person who attended in December and for various other reasons we say that it is certainly not unarguable that (inaudible) should be made in this case. That is all we ask.
JUDGE BEHRENS: Thank you very much. I take the view that it is not unarguable and I, therefore, will give you permission to join Dr Milton. I, however, propose to direct that any application for costs against Dr Milton be made within 28 days and that any evidence in support be filed within 28 days and that Dr Milton, if he wishes to answer it, will answer it within 28 days thereafter and the matter will then be re-listed before me for a further hearing, not by telephone.
MR SACHDEVA: Thank you very much, my Lord.
JUDGE BEHRENS: When you have seen Dr Milton's (inaudible) I would like you to give the court an estimate of the time. Mr Golding, the only other matter is the question of an appeal. I do not know how far you have had any advice about appeals. The position is that to appeal my order you require permission. That permission has to come either from me or the Court of Appeal. You are not obliged to ask me for permission to appeal, but if you were to ask me and I were to give it you would not need to ask the Court of Appeal. But if you are going to ask, now is the time to ask.
MR GOLDING: I would ask for permission to appeal.
JUDGE BEHRENS: I refuse permission to appeal, so you now have to go to the Court of Appeal. Thank you very much. I take the view that my own decision was within my discretion. And I do not think -- well, for the reasons I give in my judgment I do not think the Court of Appeal would interfere. Thank you very much. You need to appeal by 25 May and make your appeal to the Court of Appeal.