England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice
		Friday, 11th April 2003

MR. JUSTICE PARK:

OVERVIEW

1. In this judgment I use the following abbreviations.

"HUK": Hoechst UK Limited

"HAG": Hoechst Aktiengesellschaft

"the Revenue": The Commissioners of Inland Revenue

"the CJEC": The Court of Justice of the European Communities

"ACT": advance corporation tax

"the 1995 ACT": I will describe what I mean by this term later

As the case now stands there are two claimants, HUK and HAG, and two defendants, the Revenue and the Attorney General. However, in practice the outstanding issues are solely between HUK and the Revenue.

2. This judgment deals with a detailed question which remains unresolved in the context of what has been a wider dispute between HUK and the Revenue. All other questions have now been settled. The unresolved question concerns the ACT which HUK paid in July 1995 by reference to a dividend from it to its German parent company, HAG, earlier in 1995. This is "the 1995 ACT". I give more details of it later. The payment by a United Kingdom resident company of ACT entailed a timing disadvantage for the company because it had the effect of the company being obliged to pay part of its normal corporation tax liability, sometimes called "mainstream corporation tax", earlier than it otherwise would have done. HUK paid ACT on several occasions, and by reason of a decision of the CJEC, it is in principle entitled to compensation for the timing disadvantages which it suffered. However, two questions arise in the specific context of the 1995 ACT.

(1) It being undisputed that, by an action which HUK commenced in 1995, it had claimed compensation for the timing disadvantages arising from earlier payments of ACT, has it by its existing pleadings in that 1995 action claimed compensation for the timing disadvantage arising from the 1995 ACT? In my judgment the answer is no.

(2) Given that answer to question (1) can HUK now amend the pleadings in the 1995 action so as to claim compensation for the timing disadvantage arising from the 1995 ACT? Again, in my judgment, the answer is no.

BACKGROUND

3. The background to this case will be familiar to revenue law practitioners, although the point which I am deciding in this judgment is not a point of revenue law.
4. Over the years HUK has paid dividends to HAG, and in the years when the ACT system was in force it was required by section 14 of ICTA 1988 to pay ACT to the Revenue when it paid the dividends. In the 1990s a number of groups, including the Hoechst group, raised the argument that the inability of United Kingdom subsidiaries of parent companies based in other member states of the European Community to pay dividends without paying ACT was contrary to Articles of the EC Treaty. The core of the argument was that United Kingdom subsidiaries of United Kingdom parent companies could make group elections, with the result that they did not have to pay the ACT by reference to their dividends. The inability of United Kingdom subsidiaries of member state parents to make group elections of that sort arose from the reference in ICTA 1988 section 247 to "bodies corporate resident in the United Kingdom". The question was ultimately determined by the CJEC in a case where two United Kingdom subsidiaries of German parent companies were the taxpayers whose disputes with the Revenue on the issue have been referred to the court. HUK was one of the taxpayer companies.
5. The CJEC decided in principle that the United Kingdom law was in breach of the EC Treaty, and that the United Kingdom subsidiaries concerned, including HUK, were entitled to compensation or restitution for the unlawful imposition upon them of liability to pay ACT. Since in HUK's case the disadvantage was solely a timing disadvantage (because HUK in time set off its ACT payments against its liability for mainstream corporation tax) the compensation or restitution was to be calculated by reference to interest for the period over which HUK was deprived of funds by having had to pay the ACT, whereas the United Kingdom subsidiary of a United Kingdom parent would have been in a more favourable situation. The decision of the CJEC is reported under the names of the two companies concerned: Metalgesellschaft Limited & Others v Inland Revenue Commissioners & Attorney General and Hoechst AG & Anor v Inland Revenue Commissioners & Attorney General. The two cases are referred to as Joined Cases C-397/98 and C-410/98. The judgment of the CJEC is reported at various places including [2001] STC 452.
6. However, the CJEC could not itself award compensation or restitution. It was up to claimant subsidiaries like HUK to claim relief in the United Kingdom courts, and general principles of United Kingdom law relating to civil liability would apply. Those principles include the law of limitation of actions.
7. HUK had commenced its action against the Revenue in April 1995. The CJEC's decision meant that in principle the action should succeed, as should other comparable actions by United Kingdom subsidiaries of companies in other member states. A number of matters of United Kingdom law remained to be determined. They are being dealt with under the general ambit of a group litigation order. Until recently it was visualised that HUK would act as the lead claimant for some of the issues covered by the group litigation order; however, HUK and the Revenue have now reached an agreed settlement on most, but not quite all, of the issues which previously had still been in dispute between them. HUK's case is no longer suitable as a lead or test case, and I have made an order discharging HUK from being a test claimant and replacing it by another company.

THE FACTS RELEVANT TO THIS APPLICATION

8. The present judgment concerns one loose end which is not agreed between HUK and the Revenue. It concerns only one dividend or, more accurately, the timing disadvantage to HUK of having to pay ACT by reference to only one dividend. The dividend was £10 million and was paid on or about 7th April 1995. The associated ACT was £1,156,250 and it was paid on 14th July 1995. That is what I am referring to in this judgment as "the 1995 ACT".
9. HUK paid other dividends to HAG both before and after the 1995 dividend, and it paid ACT by reference to those other dividends. It has claimed compensation or restitution by reference to those other payments of ACT, and all of those claims are now resolved by a settlement agreement. There remains a continuing issue with reference to the 1995 ACT.

It arises as I describe in the following paragraphs.

10. HUK had commenced its civil action against the Revenue by a writ issued on 12th April 1995. That was before the payment of the 1995 ACT. The endorsement on the writ identified the following as one of the reliefs which HUK claimed (so far as still relevant):-

"Compensation for the loss of the use of monies paid pursuant to the demands by the defendant and pursuant to the Advance Corporation Tax (ACT) provisions of ICTA 1988 (namely sections 14 and 247 and schedule 13) of the said provisions being contrary to articles 6 and/or 52 and/or 58 of the [EC] Treaty ... such amounts include but are not limited to payments made by the plaintiff, namely:"

A list of payments followed, set out in two columns. The first column was inaccurately headed "Amount of tax credit applicable to dividends". It ought to have been headed "Amount of ACT applicable to dividends". The figures would be the same. The second column was correctly headed "Date ACT paid". There were six listed entries in the columns giving particulars of six ACT payments made by HUK between April 1989 and July 1994. The 1995 ACT payment which this judgment is about was not listed - obviously so, because the 1995 ACT payment had not been made at the time of the issue of the writ. I add nevertheless that the dividend, in consequence of which the 1995 ACT payment was going to be made, had been paid before the issue of the writ. If matters stopped with the writ, HUK's claim would certainly not include a claim for compensation calculated by reference to interest upon the 1995 ACT payment.

11. However, matters did not stop with the writ. In the usual way it was followed later by a statement of claim. In this case HUK served a statement of claim on 25th March 1996. That date was of course after the payment of the 1995 ACT. A major issue on the present application is whether the statement of claim, unlike the writ, claimed relief by reference to interest calculated on the 1995 ACT. I will consider later the arguments about whether it did so or not. Here I summarise the relevant contents of the statement of claim, quoting a few particularly important passages. I shall do this largely without comment at this stage.

11.1 Paragraph 3 of the statement of claim began "Hoechst UK has in the past paid dividends to Hoechst AG and intends to do so in the future".

The paragraph recorded that HUK had hitherto paid ACT in respect of the dividends. It did not say whether HUK intended for the time being to carry on paying ACT in respect of future dividends, but as the 1995 ACT payment shows, and as I believe is also shown by a payment made in 1997, HUK did carry on paying ACT.

11.2 Paragraphs 4 and 5 of the statement of claim pleaded an argument about the double taxation agreement between the United Kingdom and Germany. The argument is not material to this application.

11.3 Paragraph 6 of the statement of claim is material. HUK contended further and in the alternative that section 247 of ICTA 1988 was contrary to articles of the EC Treaty.

11.4 Paragraph 7 of the statement of claim pleaded that HUK and its parent HAG were entitled to a declaration accordingly.

11.5 Paragraph 8 of the statement of claim began with the following sentence:- "Hoechst UK also claims to recover in respect of the ACT it has paid since 1989."

Five sub-paragraphs (1)-(5) followed. Sub-paragraph (3) pleaded that, although ACT paid by HUK was later set off against mainstream Corporation Tax, the Revenue "had the use of the advance meanwhile". Sub-paragraph (4) pleaded that HUK, under its argument based on the double taxation agreement, was entitled to compensation for "such advance". The sub-paragraph continued:- "HUK quantifies such sum as £8,061,987 as set out in part 1 of the schedule served herewith."

Sub-paragraph (5) read as follows:-

"Further and in the alternative, Hoechst UK claimed such sums as restitution for the use of the advance on the basis that the ACT was paid pursuant unlawful statutory provisions, and/or under a mistake of law, alternatively as damages for breach of the EC Treaty ...".

Early in that quotation the words "such sums" accurately reproduce the statement of claim as served, but I think it is clear that those words are a slip for "such sum". The reference can only have been to the sum claimed as compensation in sub-paragraph (4), which was the sum quantified as £8,061,987 as set out in part 1 of the schedule.

11.6 Paragraphs 9 to 12 of the statement of claim are not material to this application.

11.7 The prayer for relief came after paragraph 12. By sub-paragraph (3) of the prayer HUK claimed "£8,061,987 under paragraph 8 above".

11.8 The statement of claim was accompanied by a schedule. Part 1 of the schedule showed the detailed calculation of the £8,061,987. Part 1 was headed:- "Interest on ACT cash flow relating to dividends paid up to 26th April 1994". One of the columns in the schedule specified the ACT payments by reference to which the calculations were made. They were the same six payments, the earliest in 1989 and the latest in 1994, which had been itemised in the writ. The writ, it will be recalled, had been issued on 12th April 1995. The ACT payments specified in the schedule did not include the 1995 ACT payment.

12. On dates in 1996 the Revenue served a defence and HUK served a reply. Neither of those pleadings affect the present application.
13. On 1st October 1998, the writ was amended and re-issued, and on 5th October 1998 the statement of claim was amended. None of the amendments to either document made any changes which were directly material to the present issues. Neither the writ nor the statement of claim was amended so as to make specific reference to the 1995 ACT.
14. On 2nd October 1998 the general question of principle raised by HUK's claim was referred by the High Court to the CJEC.

Progress of the case in the English courts was stayed pending the decision of the CJEC.

15. On 8th March 2001 the CJEC announced its decision.
16. 13th July 2001 was not a date on which any specific event occurred. It is, however, a significant date because, if the limitation period for any claim by HUK by reference to the 1995 ACT was six years from the payment of the 1995 ACT, the period expired on 13th July 2001. By that date HUK had not commenced a separate action relating to the 1995 ACT. Nor had it applied to amend the pleadings in its existing action so as specifically to claim relief by reference to the 1995 ACT.
17. An alternative formulation of the foregoing paragraph which occurs to me is that the limitation period may have expired, not all at once on 13th July 2001, but progressively over the period from that date until six years after the date when the 1995 ACT was set off against mainstream corporation tax. That date appears to have been 1st October 1996. If that is right, this possible analysis of the limitation period makes no difference because the period would have expired finally on 30th September 2002. HUK had not by then commenced a separate action relating to the 1995 ACT, or applied to amend its existing action in a relevant way.

HOW THE PRESENT APPLICATION ARISES

18. It appears from correspondence in the bundle of documents that, in the course of exchanges about the settlement which has by now been agreed between HUK and the Revenue, the Inland Revenue Solicitor raised the point that, on limitation grounds, the Revenue could not agree that it had any liability to HUK by reference to the 1995 ACT. The Revenue's position was, and still is:

(1) That HUK's existing action, of which I have given particulars earlier, did not claim relief by reference to the 1995 ACT.

(2) That HUK was out of time to commence a new action.

(3) That HUK was also out of time to amend the written statement of claim in the existing action so as to bring the 1995 ACT within its scope.

19. HUK has brought this application in order to ascertain whether the Revenue's position is correct. In form it is an application to re-amend the 1995 writ and the 1995 statement of claim (those documents having already been amended once in 1998) by:

(1) Adding to the list of ACT payments in the writ the 1995 ACT (ie £1,156,250 paid on or about 14th July 1995).

(2) Adding a new schedule to the statement of claim which calculates a claim for compensation of £102,238 by reference to the 1995 ACT.

(3) Amending HUK's money claim so that it now claims that amount of £102,238 by way of compensation or restitution for HUK having suffered the timing disadvantage of paying £1,156,120 of its corporation tax liability earlier than a subsidiary of a United Kingdom parent company would have had to pay it.

As a response to the Revenue's first argument (that HUK's existing action did not claim relief by reference to the 1995 ACT) HUK's real point is that it does not need to amend the writ and statement of claim at all, because properly understood they already do claim relief by reference to the 1995 ACT. So far as this argument by HUK is concerned, the proposed amendment is just a procedural device to raise the issue. Counsel both accepted that the real question is whether HUK strictly needs to amend at all. I will approach this part of the case on that footing.

20. There is a second aspect of the application which I will describe in the next paragraph, but there is a detailed point which it is convenient to make here. HUK also applies to amend the written statement of claim so as effectively to delete all the specific claims for relief which it had previously made. Those amendments are consequential on all issues except the ones about the 1995 ACT having been settled.

They are uncontroversial in themselves, and I will of course amend the written statement of claim in those respects. HUK wants the case which it began in April 1995 to become one, after amendment of the pleadings, by which its only claim is for compensation of £102,238 by reason of its having been constrained by ICTA 1988 section 247 to pay the 1995 ACT in July 1995. The Revenue's position is that that cannot be done. The existing case never included a claim for the £102,238; the agreed settlement has disposed of the existing case in its entirety, and the case cannot continue as a claim for the £102,238.

21. The second aspect of the application which is presently before me arises if HUK is wrong on its first argument. Thus if, contrary to HUK's argument, the existing claim does not extend to compensation for having had to pay the 1995 ACT, HUK wishes to amend its pleadings so that, after the amendments, the claim does so extend. On this second argument the amendments, if made, would change the position. So in this respect the application is more than a procedural device to determine what the present position is.

THE LAW

22. The relevant statutory provisions are section 35(1)-(5) of the Limitation Act 1980 and the CPR rules 17.1(2)(b) and 17.4(1) and (2). I will not set them out in this judgment. I believe that their effect can be summarised as follows: where an amendment to a claimant's pleading is proposed outside the limitation period, the first question is whether the amendment would involve the addition or substitution of a new cause of action to or for the cause or causes of action already pleaded. If it would not, the court has a discretion to allow the amendment. If the amendment would add or substitute a new cause of action, another question has to be asked: would the new cause of action arise out of the same facts or substantially the same facts as those out of which a cause of action which has already been pleaded arises? If it would, the court has a discretion to allow the amendment. If it would not, the court may not allow the amendment.
23. It may be helpful to express the effect in the negative. An amendment for which permission may not be given is one of which the following three propositions are true:

i. The amendment is sought to be made outside the limitation period.

ii. The amendment involves the addition or substitution of a new cause of action. And

iii. the new cause of action does not arise out of the same facts or substantially the same facts as a cause of action already pleaded.

24. Two critical concepts which feature in the foregoing formulations of the legal position are those of a cause of action and of the limitation period. A cause of action in this context is not so much the label attaching to a claimant's claim (for example "breach of statutory duty" or "money paid under a mistake of law"). Rather, it is the set of facts which entitles the claimant to relief:-

"Every fact which is material to be proved to entitle the plaintiff to succeed - every fact which the defendant would have a right to traverse".

(Brett, J. in Cooke v Gill (1873) 8 CP 107 at 116). See also Diplock, LJ in Letang v Cooper [1965] 1 QB 232 at 242-3:

"A cause of action is simply a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person".

25. As regards the limitation period, in the present case it is agreed that it is six years under section 2 of the Limitation Act 1980. But the vital question is: when does the six years start to run? The Act provides that it starts with the date of accrual of the cause of action. In this case, in so far as HUK relies simply on the fact that it had to pay part of its corporation tax liability earlier than it would have done if it had been the subsidiary of a UK parent company, the cause of action accrued on 14th July 1995 (or possibly accrued progressively over the period from 14th July 1995 to the date when the ACT was set off against mainstream corporation tax, that date being 1st October 1996). On that basis the limitation period expired before HUK made its application. I shall proceed on that footing in this judgment. There is, however, a further possible aspect of this, to which I will refer at the end of the judgment.

DISCUSSION AND DECISION

26. Proceeding as I do on the footing that the limitation period has expired, it is too late for HUK to commence a new action claiming relief by reference to the 1995 ACT payment. It can only recover such relief if it can bring the claim for it within the relief claimed by the existing action (the one commenced by the writ issued on 12th April 1995), and there are only two ways in which it might be able to do that. The first is by establishing that the existing pleadings already do claim relief for the consequences of the 1995 ACT payment. This route overlaps with establishing that HUK's proposed amendments to the pleadings do not involve the addition of a new cause of action. The second route is by showing that, if the amendments do involve the addition of a new cause of action, nevertheless the new cause of action arises out of substantially the same facts as the cause or causes of action which have already been pleaded.
27. On behalf of HUK Mr. Fitzpatrick has submitted that either or both of the foregoing routes is available in this case. Despite his excellent and thorough presentation of the submissions, I cannot agree. I accept the submissions of Mr. Carr on behalf of the Revenue that the existing pleadings do not claim relief by reference to the 1995 ACT and that it is too late to amend them now.
28. I begin with HUK's existing pleadings. They consist so far as relevant of (1) the writ as issued in April 1995 and as amended and re-issued on 1st October 1998, and (2) the statement of claim as served on 25th March 1996 and as amended on 5th October 1998. It is clear that the writ makes no claim by reference to the 1995 ACT. As I have said already, the 1995 ACT had not been paid when the writ was issued. The writ lists six ACT payments, of which the latest in date was made in July 1994. When the writ was amended the opportunity was not taken to add the 1995 ACT payment to the list.
29. I turn to the statement of claim. It was served in March 1996, after the payment of the 1995 ACT. Mr. Fitzpatrick relies on one short sentence which was contained in paragraph 8 of the statement. (The paragraph number has changed since in consequence of the 1998 amendment). paragraph 8 began:

"HUK also claims to recover in respect of the ACT it has paid since 1989".

I agree that that sentence, if read by itself, would cover the 1995 ACT. However, in my judgment the sentence cannot be read by itself. By sub-paragraphs 8(4) and (5), which I have quoted earlier, HUK stated that it quantified the sum which it was claiming as £8,061,987 as set out in part 1 of the schedule. Part 1 of the schedule listed earlier ACT payments (from 1989 to 1994) and quantified the claim by reference to interest on those payments. It did not list the 1995 ACT payment and no part of the quantified claim of £8,061,987 is derived from the 1995 ACT. Sub-paragraph 3 of the prayer pleaded that HUK claimed "£8,061,987 under paragraph 8 above". In the circumstances, it is in my opinion clear that the claim made by paragraph 8 was restricted to compensation or restitution in respect of the ACT payments in the schedule, and it did not extend to the 1995 ACT.

30. In that respect the statement of claim was in line with the writ. That is as one would have expected, because if the statement of claim had pleaded more extensive relief than was claimed by the writ, that would have been in contravention of order 18, rule 15.2 of the Rules of the Supreme Court. It is true that that would have been an irregularity which did not render the claim by reference to the 1995 ACT a nullity, and which could have been waived by the court. But the significant point is that, if the solicitors and counsel who prepared the statement of claim had intended it to cover the 1995 ACT, they would not have proceeded as they did; they would probably have applied to amend the writ first.
31. The final point on the statement of claim is that when it was amended in 1998 (within the limitation period), it could have been amended so as to incorporate into the schedule and the quantification of the claim, the timing disadvantage caused by the 1995 ACT. It was not so amended.
32. For the foregoing reasons, I accept Mr. Carr's submission that HUK's existing pleadings do not claim relief by reference to the 1995 ACT.
33. The consequence is that, in my view, the amendments which HUK now seeks to make would add a new cause of action to the cause or causes of action already pleaded. Under the provisions which I specified earlier, that can only be done if the new cause of action arises out of substantially the same facts as the cause or causes of action already pleaded.
34. Despite Mr. Fitpatrick's attractive submission that it did, in my judgment it did not. It is true that the background to the causes of action is the same. HUK was a subsidiary of a German parent company, and UK tax law did not permit the making of a group election between them. But the central fact which gave rise to a cause of action was the payment of a specific dividend and the consequential payment of ACT to the Revenue, calculated by reference to the dividend. So far as concerns HUK's cause of action arising from the 1995 ACT, the facts were: (1) that HUK paid a dividend of £10 million to HAG on or about 7th April 1995; and (2) that in consequence HUK paid ACT of £1,156,250 on 14th July 1995. Those are not substantially the same facts as, to take one example which I derive from the schedule to the statement of claim, the following: (1) that HUK paid the dividend £43 million to HAG on 16th January 1989; and (2) that in consequence HUK paid ACT of £14,333,33 on 14th April 1989. I could, of course, repeat the example by reference to all the other five dividend and associated ACT payments which HUK had made and which were specified in the writ and statement of claim.
35. For that reason I do not believe that I have the discretion to permit the amendments which HUK applies to make, and I therefore dismiss the application.

ONE POSSIBLE REMAINING ISSUE

36. There is one detailed matter which I must mention. There is a possibility that my decision may not finally dispose of HUK's claim for compensation by reference to the 1995 ACT. The possibility arises in this way. HUK and other companies which are claimants participating in the group litigation order argue that their claims to be paid money by the Revenue can be supported on all or any of three different bases:

(1) As compensation for breach of the EC Treaty;

(2) As restitutionary relief for breach of the EC Treaty;

(3) As restitution for money paid under a mistake of law.

If (1) or (2) applies but (3) does not, it is agreed that the limitation period was six years from the date when the ACT was paid, or possibly six years from the date when the ACT was set off against mainstream corporation tax. In that situation HUK, for the reasons explained in this judgment, cannot succeed on its claim by reference to the 1995 ACT. However, if (3) applies, there is an argument that the limitation period began to run at a much later date. If that is the case, HUK's application to amend its pleadings may not have been out of time after all.

37. The questions of whether (3) is a valid basis of claim at all, and, if so, when the limitation period started to run, are to be decided in a future test case to be heard within the GLO. This will be the test case to decide EU issues (i) (A) and (B). If that case is decided in favour of the claimant, HUK may wish to argue that it is entitled after all to the restitution of £102,238 which it calculates by reference to its 1995 ACT payment.
38. There was some discussion in the hearing of how best to deal with this. No conclusion was reached and I will welcome further discussion with counsel about it. A suggestion which I make is that I should dismiss HUK's application now but subject to the proviso that within a time limit, say six weeks after the future test case is finally decided, HUK may apply for the application which is now before me to be reconsidered in the light of the decision.

So, Mr. Carr, where do we go from that?

MR. CARR: My Lord, the costs of the application, and secondly to deal with the point that your Lordship raised about the mistake in law point.

MR. JUSTICE PARK: Shall we deal the costs first? Would the costs follow, Mr. Fitzpatrick?

MR. FITZPATRICK: My Lord, I cannot oppose my learned friend's application.

MR. JUSTICE PARK: Right, that is found, so costs -- there was a costs schedule.

MR. CARR: There was, my Lord.

MR. JUSTICE PARK: I confess I am not sure where it is now.

MR. CARR: I have got another copy.

MR. JUSTICE PARK: Do you want me to deal with it that way?

MR. CARR: Well, the costs schedule only covered the first day of the hearing, it does not cover the attendance today, and I do not have a separate schedule dealing with the additional costs that were incurred as a result of attending today, so I think I would invite your Lordship to order a detailed assessment of this hearing.

MR. JUSTICE PARK: Yes, unless agreed. That is what I would like to do. Yes.

MR. CARR: Thank you. My Lord, on the other matter I do not know whether it is for me to go first or Mr. Fitpatrick. I am happy to deal with it either way.

MR. JUSTICE PARK: Since you are on your feet, what do you think?

MR. CARR: My Lord, you will recall on the first day of the hearing I indicated a view that this application was arguably premature, given the question of the mistake claim was going to be dealt with shortly by this court.

MR. JUSTICE PARK: Yes.

MR. CARR: It is also the case that in making an application to amend under CPR 17.4, the position that the claimant is in is that they have got to demonstrate either that there is no arguable limitation defence so we have not lost the limitation defence, or substantially the same and facts allowing an amendment outside the limitation issue. Having made that application and failed, in my submission your Lordship should simply dismiss the application full stop, without leaving an escape route which the claimants might seek to pursue at a later date.

MR. JUSTICE PARK: So that is the end of the road for them, is it, if the ----

MR. CARR: My Lord, yes.

MR. JUSTICE PARK: If Deutsche Morgan Grenfell is a case in which the taxpayers succeed, that is just tough on Hoechst; they should not have brought this application now.

MR. CARR: My Lord, yes, because it was for them to decide when to make the application. If they decided to put their eggs in the 17.4 basket now and make the application, they put us all in a position where potentially we would otherwise have a second application to deal with. They could have ----

MR. JUSTICE PARK: There will not be a second application, will there? Well, there might be, but it will be concerned with different arguments. Is that not right?

MR. CARR: The position at the moment, my Lord, is that there is no extant claim in relation to 1995 ACT payment. An application has been made. Your Lordship should dismiss it. If they wish at a later date to resurrect the application, well, that matter could be dealt with as and when it arises.

MR. JUSTICE PARK: They could do that, but if they did that, what would be to stop Hoechst from commencing a new action?

MR. CARR: There may be abuse of process and Henderson v Henderson arguments that could be run if they sought to bring a second action, having failed to bring within the first set of proceedings a proper claim which it was open to them to bring at any stage up to the ----

MR. JUSTICE PARK: But, I mean, it was perfectly sensible for them to bring this application now, was it not, although I have not agreed with Mr. Fitzpatrick's argument. The position adopted by Hoechst UK was that given the settlement that had been reached on all issues, that settlement, they contended, applied equally to the 1995 dividend, bring the 1995 dividend into it, pay them the amount that has been settled, and they are away and the case is all over.

MR. CARR: My Lord, I have made my submissions.

MR. JUSTICE PARK: Yes. All right. Yes. What would you say about that, Mr. Fitzpatrick?

MR. FITZPATRICK: My Lord, first of all picking up on my learned friend's comment about CPR 17.4 and his approach to the exercise of discretion under that, and the question of whether they had an arguable limitation defence and how arguable that limitation defence has to be, one of the things which I think was to some extent canvassed in correspondence prior to this application, although not finally resolved in any sort of detailed manner, was that we wanted to avoid having to argue about mistake of law before your Lordship prior to the hearing of the DMG case.

MR. JUSTICE PARK: Yes, of course.

MR. FITZPATRICK: My Lord, it seems to me that what my learned friend is saying would actually involve us in further argument about the status of their limitation defence with regard to mistake of law, because your Lordship would have to consider all of the arguments which would be advanced before you in DMG. Furthermore, my Lord, with regard to the timing of this application, it is very much as your Lordship has suggested, which is that from the point of view of Hoechst -- if they were right about this application then that would indeed be the end of the matter and they would not have to subscribe to the limitation issues, and they would not have to pay the costs of the limitation issues. So on that basis, my Lord, I would submit that the application was brought at the right time in the right manner.

The suggestion which your Lordship makes which is effectively to preserve the position pending the decision of your Lordship in DMG, is eminently sensible.

MR. JUSTICE PARK: Yes. The other thing I could do is just dismiss this application and leave you to start a whole new claim.

MR. FITZPATRICK: My Lord, yes. That is one alternative. There is a potential downside to the claimant if that happens. If your Lordship were to - depending on the date that your Lordship decided was the start date in DMG.

MR. JUSTICE PARK: Yes. Yes. Six years may have expired already, yes.

MR. FITZPATRICK: Yes, the maths gets quite complicated, but ----

MR. JUSTICE PARK: Yes.

MR. FITZPATRICK: But that would be a disadvantage.

MR. JUSTICE PARK: And so you would like me to do what I have suggested?

MR. FITZPATRICK: My Lord, yes.

MR. JUSTICE PARK: Yes. Well, Suffering from the failing of always being in favour of my own suggestion, that is still what I want to do, but -- do you want to have another go to dissuade me from it, Mr. Carr?

MR. CARR: I am not sure I could dissuade ----

MR. JUSTICE PARK: All right. Very well. In that case I will dismiss this application but with a proviso to go in the order to that effect. Do you think I could ask the two of you to help the associate by doing a draft minute which will encapsulate that? It will probably be necessary to make some reference to the paragraph numberings of the EU issues and some -- I have put in the end of the judgment just the rather general expression, "six weeks after the future test case is finally decided". You will probably have to explain what is meant by that. I guess it would be a decision where the time for appealing has expired or if there is an appeal, it will keep going until the appeal chain has been fully exhausted. But I am sure you can manage all that, can you not?

MR. FITZPATRICK: My Lord, I am confident we can.

MR. JUSTICE PARK: All right. Anything further?

MR. CARR: No, my Lord.

MR. JUSTICE PARK: All right.

MR. FITZPATRICK: I am sorry, my Lord, there is something further from our point of view, which is that it is sort of standard practice now to actually ask for leave to appeal ----

MR. JUSTICE PARK: Yes, it is.

MR. FITZPATRICK: -- must seek the leave of the trial judge first.

MR. JUSTICE PARK: Yes.

MR. FITZPATRICK: My Lord I would ask for leave to appeal in respect of both of your Lordship's decisions, the real reason being that this case raises a question as to what is a cause of action and when is a cause of action properly pleaded, in respect of which different views may be taken by a different tribunal. And, my Lord, on that basis it is a suitable case for leave to appeal.

MR. JUSTICE PARK: Yes.

MR. FITZPATRICK: I do not think I want to give leave myself, Mr. Fitzpatrick. I can well imagine that your clients may want to approach the Court of Appeal, given a fair wind, if that is what they want to do. But I do not think I will myself give leave. A point which sometimes arises on a situation like this is that I may be asked if I am not prepared to give permission myself, will I give you a longer time period than appears in the rules for serving an appellant's notice seeking leave there. You have got what I have got in manuscript, but you would probably like to see a transcript, would you not?

MR. FITZPATRICK: My Lord, it would certainly make the process easier. I think also in terms of preparing documentation for the Court of Appeal.

MR. JUSTICE PARK: Can you remember which is the particular paragraph in part 52? It may be in 52.4, yes. If you look at 52.4.2,

"The appellant must file the appellant's notice at the Appeal Court

(a) within such period as may be directed by the lower court, or

(b) where the court makes no such direction, 14 days after the date of the decision of the lower court that the appellant wishes to appeal".

Suppose I said I refused permission to appeal myself, but I will direct that any appellant's notice applying in the first instance for permission to appeal from the Court of Appeal must be filed within blank days of a transcript of my judgment being made available to the parties. And I was going to suggest for the blank fourteen. If you have not got a fairly full record, which I hope you can read, of what I have said, I might have said 21 or 28, but it is pretty well all here, is it not, and although I made quite a lot of changes in the earlier parts, I think in the later parts where I was going through the reasoning, what I said is very close to the text that you have.

MR. FITZPATRICK: Fourteen days after ----?

MR. JUSTICE PARK: The transcript. Yes. Well, if you could put something to give effect of that in a minute of order and make it available to the associate, that would be very helpful.

MR. FITZPATRICK: My Lord, yes.

MR. JUSTICE PARK: That, perhaps, is the end, is it? All right. Thank you very much for the help.

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