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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Bloomsbury International Ltd & Ors v Sea Fish Industry Authority & Anor [2009] EWHC 1721 (QB) (24 July 2009)
URL: http://www.bailii.org/ew/cases/EWHC/QB/2009/1721.html
Cite as: [2009] EWHC 1721 (QB), [2010] 1 CMLR 12
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Claim No: HQ08X03511 |
QUEEN'S BENCH DIVISION
Royal Courts of Justice Strand, London, WC2A 2LL |
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B e f o r e :
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| BLOOMSBURY INTERNATIONAL LIMITED OCEAN WORLD FISHERIES LIMITED VISION SEAFOOD INTERNATIONAL LIMITED SEAFRIDGE LIMITED SEATEK (UK) LIMITED VISION SEAFOODS LIMITED BRITISH SEAFOOD LIMITED FIVE STAR FISH LIMITED |
Claimants |
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| - and - |
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| SEA FISH INDUSTRY AUTHORITY DEPARTMENT FOR ENVIRONMENT FOOD AND RURAL AFFAIRS |
Defendants |
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Mr Charles Flint QC and Mr Robert Weekes (instructed by Nabarro LLP) for the 1st Defendant
Mr Tim Eicke and Mr Ian Quirk (instructed by DEFRA) for the 2nd Defendant
Hearing dates: 15/6/2009 – 18/6/2009
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Crown Copyright ©
- The First Defendant ("the SFIA") is a Non Departmental Public Body whose stated mission is "to support the seafood industry for a sustainable, profitable future". According to its website, the SFIA:
- The present proceedings concern the legality of the levy which funds the SFIA. The Claimants are a group of importing companies who challenge the legality of the levy in so far as it purports to apply to importers.
- The SFIA was constituted and given power to impose a levy on sea fish and sea fish products under the Fisheries Act 1981 ("the 1981 Act"). This power is given effect by regulations made under the Act, currently the Sea Fish Industry Authority (Levy) Regulations 1995 ("the Regulations"). The SFIA is required by the 1981 Act to apply the proceeds of the levy for the purpose of promoting the efficiency of the sea fish industry and so as to serve the interests of that industry as a whole, having regard to the interests of consumers. The SFIA is also required by the 1981 Act not to discriminate against the sea fish industries of other member states of the EU.
- The Claimants are all engaged in the UK sea fish industry, primarily as importers of sea fish and sea fish products. They have paid the levy to the SFIA as required by the Regulations. In this action they contend that the SFIA has no power to impose the levy on importers who import sea fish or sea fish products from abroad and (by proposed amendment) that the imposition of the levy on importers would be contrary to articles 23 and 25 of the EC Treaty.
- If the Claimants succeed on either limb of their argument, they seek restitution from the SFIA in respect of the levy payments which they have made in the past either on the basis that there has been an ultra vires demand for payment of a levy or on the grounds of mistake. The Claimants either seek repayment of all levy payments made (on the basis that section 32(1)(c) of the Limitation Act 1980 applies to extend the limitation period) or repayment for six years prior to the commencement of proceedings (9 September 2008).
- In addition to contending that there is no restitutionary claim since the Regulations are valid, the SFIA contends that the Claimants should not be entitled to restitution for mistake, since it has changed its position as a result of the payments. The SFIA also relies on the six year limitation period as barring any claim for levy paid before 9 September 2002.
- To the extent that the Regulations are valid, the SFIA seeks payment of outstanding levy from the Claimants, since the Claimants have not made any payments of levy since commencing these proceedings.
- The Second Defendant ("DEFRA") is the sponsoring Department for the SFIA for England and has ultimate responsibility for the SFIA in its role as the UK Fisheries Department. DEFRA's predecessor, MAFF, was the lead government department responsible for promoting the 1981 Act through Parliament and made the current secondary legislation thereunder.
- DEFRA sought (and was permitted) to be joined as a party to proceedings that had been brought by the Claimants against the SFIA in view of the challenge made to the legality of legislation for which it was responsible.
- DEFRA generally supports the position of the SFIA in these proceedings. In addition, it contends that it is an abuse of process for the Claimants to bring this claim by way of a private action, rather than through judicial review proceedings and it invites the Court to strike out the claim on this basis.
- The Claimants request permission to make a further amendment to their claim to seek Francovich damages from DEFRA on the basis that the levy on imported fish was contrary to Articles 23 and 25 of the EC Treaty, which application is opposed by DEFRA.
- The Claimants' primary case is that, insofar as the Regulations seek to impose a levy on imported sea fish and sea fish products[1], they are ultra vires and void, since the 1981 Act did not give the SFIA the power to impose a levy on imported sea fish.
- This raises an issue of statutory construction, relating in particular to what the 1981 Act means in section 4(3) by stating that Regulations may impose a levy on sea fish "landed in the United Kingdom or trans-shipped within British fishery limits".
- The Claimants contend that section 4(3) of the Act defines the circumstances in which a levy may be imposed and that, giving the term "landed in the United Kingdom" its natural and proper meaning, it covers sea fish which have been caught and are then brought to land (for example, a fisherman landing his catch) in the UK. The term cannot extend to cover sea fish which have been caught and then brought to land outside the UK and are then imported into the UK.
- The Defendants contend that section 4(3) is permissive rather than restrictive and that, in any event, on its true construction the term "landed" covers both sea fish which are brought to land for the first time and sea fish imported into the UK.
- The Claimants' alternative case (by proposed amendment) is that if the levy applies to imports then it would be contrary to Articles 23 and 25 of the EC Treaty (formerly Articles 9 and/or 12 of the Treaty of Rome), since it would be a charge having equivalent effect to a customs duty. The Claimants rely upon this both as an aid to construction on their first limb (since, if possible, the Act should be construed so as to be lawful) and as a separate ground for the Regulations being ultra vires and void insofar as they impose a levy on imported sea fish.
- In response to this second limb, the Defendants contend that the levy is not a charge having equivalent effect to a customs duty. Further or alternatively, they contend that it is a charge relating to a system of internal taxation applied systematically and in accordance with the same criteria to domestic products and imported or exported products alike and is, therefore, permissible under Article 90 of the EC Treaty.
- Whilst the SFIA was willing to consent to that amendment being made, DEFRA refused to consent and it was agreed that the application to amend should be adjourned to the trial. For reasons set out below, I give permission for this amendment to be made.
- However, in the skeleton for the trial the Claimants sought to raise a further alternative case to the effect that the levy is incompatible with Articles 23 and/or 25 and/or Article 90 on the basis that domestic sea fish and sea fish products derive an exclusive benefit or a proportionately greater benefit from the levy than do imported products.
- If the burden on domestic products is wholly offset then the charge is a charge on imported products alone and falls within Article 25. Alternatively, if the burden on domestic products is only partially offset but in a disproportionate manner then it discriminates against imported products in breach of Article 90. The case therefore depends upon an analysis of the benefits derived from the levy.
- This further alternative case raises factual issues which the parties were not in a position to deal with at the trial and I ruled that it would not be tried at the hearing before me. The parties then agreed that the issue of permission to amend should be held over until after judgment had been given on the existing issues.
- The hearing before me was an expedited trial pursuant to the Order made by Nicol J. on 12 February 2009 and concerned liability issues only. All parties served witness statements, but, since there was no material challenge to the content of those statements, none of the witnesses gave oral evidence.
- The essential issues to be determined at this trial can be stated as follows:
- The Preamble to the 1981 Act provides:
- The most relevant sections of the 1981 Act are:
- The Regulations materially provide:
- In these proceedings the Claimants assert a common law right in restitution for repayment of the levies they have paid.
- In relation to their claim in restitution the Claimants rely on two causes of action:
- The claim in restitution against the SFIA was originally the only claim in the proceedings. Subsequently DEFRA elected to join the proceedings and the Claimants now seek by amendment to advance an alternative claim for Frankovich damages against DEFRA.
- DEFRA (but not the SFIA) contend that the Claimants cannot pursue these private law claims by ordinary action, but can only do so through the judicial review procedure in reliance on the decision in O'Reilly v Mackman [1983] 2 AC 237.
- In Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988 the Court of Appeal reviewed the relevance of O'Reilly v Mackman in the light of the changes made by the CPR. Lord Woolf MR stated as follows:
- There have been a number of cases since O'Reilly v Mackman where a claimant who has a private law right has been held to be entitled to enforce that right by ordinary action even though the proceedings involve a challenge to a public law act or decision. As Lord Bridge stated in Roy v Kensington and Chelsea Family Practitioner Committee [1992] 1 AC 624, 628H-629A:
- In the Woolwich case itself Lord Slynn said at 200F:
- In Boddington v British Transport Police [1999] AC 143, 172G, Lord Steyn explained the developments since O'Reilly v Mackman as follows:
- In the present case there can be little doubt that the Claimants are asserting an "entitlement to a subsisting right in private law" and are seeking "to establish private law rights". They assert a common law right in restitution. That right arose on payment. It did not arise out of an administrative decision, nor are the Claimants seeking to set aside the decision of an administrative body. The only remedy claimed by the Claimants in the present case is a monetary remedy. They do not need to seek and do not seek any administrative law remedy or a declaration or injunction.
- The present case is analogous to British Steel plc v. Customs & Excise Commrs. [1997] 2 All ER 366 in which it was held that a Woolwich claim could be made in an ordinary action for restitution and did not need to be made by way of judicial review. In that case Saville LJ at p379 emphasised the importance of concentrating on substance rather than form and expressed disquiet at the idea that the assertion of private law rights should depend on whether the correct form of action had been used.
- DEFRA placed reliance upon the decision of Plender J. in Malcolm Morgan Jones (On Behalf Of The Estate Of Evan Jones In His Own Capacity) v Powys Local Health Board et al [2008] EWHC 2562 (Admin) in which, following detailed submission on the "principle in O'Reilly v Mackman", the question was put in terms of being whether:
- DEFRA contends that in this case the examination of the public law issue of the vires of the Regulations is not incidental, but is fundamental to the claim made and is the "primary focus" or "dominant issue".
- Assuming without deciding that this is the appropriate test, in my judgment it is satisfied in this case for the reasons outlined in paragraph 35 above. Where such a right is being asserted the public law issue is incidental or collateral, despite its importance and the need for it to be addressed to establish the cause of action.
- Looking at the matter more broadly, I do not consider that there is any question of the protections under Order 53 (now CPR Pt 54) being avoided "in circumstances which are inconsistent with the proceedings being able to be conducted justly". This is not a case where an ordinary action has been brought in order to circumvent or flout those protections. The claim was brought by the Claimants against the SFIA in an ordinary action because the only claim being made was a private law claim for a monetary remedy (indeed under CPR Pt 54.3(2) a claim for judicial review cannot be made where only a monetary remedy is being sought). The SFIA took and take no objection to that claim being made in an ordinary action and indeed counterclaim in the action for unpaid levies. The vires of the Regulations therefore necessarily arises as part of the Claimants' defence to that counterclaim regardless of their own claim. The claim form was issued in September 2008 and the claims have been brought to trial with expedition. DEFRA has been allowed to become a party to the proceedings and to make such submissions as they wish with regard to the vires of the Regulations. The main point DEFRA contends that it would wish to advance on any application for judicial review is that the claim has no real prospects of success, an argument that it can and does advance at this trial. In all the circumstances, there is no injustice or abuse in the claims proceeding by way of action.
- For all these reasons I therefore reject DEFRA's abuse of process argument.
- This raises two main sub-issues:
- Section 4(1) of the 1981 Act states that: "For the purpose of financing its activities the [SFIA] may impose a levy on persons engaged in the sea fish industry."
- Section 4(2) of the 1981 Act then materially states that "Any levy under this section shall be imposed by regulations...".
- Section 4(3) of the 1981 Act then states that "Regulations under this section may impose a levy either (a) in respect of the weight of sea fish or sea fish products landed in the United Kingdom or trans-shipped within British fishery limits at a prescribed rate which, in the case of sea fish, shall not exceed [2p] per kilogram; or (b) in respect of the value ....of sea fish or sea fish products landed or trans-shipped as aforesaid at a prescribed rate not exceeding 1 per cent of that value."
- DEFRA (but not the SFIA) take the position that the SFIA's power to impose a levy is solely set out in section 4(1). Any limits on that levy raising power are contained in section 14(2), by reference to the persons on whom a levy may be imposed and the activities for which that levy may be imposed. As a result, under section 4(1) the SFIA is empowered by the 1981 Act to impose a levy inter alia on anybody who "carries on in the United Kingdom the business … of importing sea fish or sea fish products" for any activity carried out in pursuit of that business.
- It is further submitted that section 4(3) does not limit the levy raising power because: (i) it is addressed to the amount of levy that may be imposed and the method by which it may be calculated rather than on what it may be levied; (ii) if the concept of "landed" in section 4(3) was of such importance as to delimit the otherwise general levy raising power conferred by section 4(3), this would have been made more clear and would not have been hidden in a subsection dealing with the method of calculating the amount of levy charged and the term "landed" would have been separately defined; and (iii) in any event, section 4(3) is permissive, not restrictive.
- I agree with the Claimants that this argument is inconsistent with section 4(3) and that it results in an ill-defined and open-ended levy raising power. Section 4(3) is intended to limit the SFIA's levy raising powers, at the minimum by imposing a cap on the levy that can be raised: either a cap of 2p per kilogram or 1% of value. The language of section 4(3) – in particular the reference to a levy being imposed either (a) on the basis of weight or (b) in respect of value – confirms that section 4(3) was intended to prescribe the only two ways that a levy could be imposed.
- Given the terms of sections 4(2) and 4(3) of the 1981 Act, it clearly would not be open to the SFIA pursuant to section 4(1) of the 1981 Act to impose, for example, a levy of, say, £100 a head on each person engaged in the sea fish industry (a sort of sea fish "poll tax").
- In the same way that section 4(3) is clearly imposing a financial cap on the levy that can be raised, it is equally defining the circumstances in which a levy can be imposed, namely on "sea fish or sea fish products landed in the United Kingdom or trans-shipped within British fishery limits". It would be bizarre if part of section 4(3) (which comprises a single sentence) was prescriptive, but the rest of the subsection was not.
- Section 4(1) defines who may have a levy imposed on them; section 4(3) defines in respect of what the levy may be imposed. They are complementary provisions. I therefore reject DEFRA's case on this issue.
- The term "landed" was not defined in the 1981 Act (prior to amendments to it) save that section 4(8)(b) of the 1981 Act stated that: "references to the landing of fish includes references to the collection for consumption of sea fish which have been bred, reared or cultivated in the course of fish farming whether in the sea or otherwise."
- Putting aside the special case of fish farming, the Claimants' case is that in the context of "sea fish" as defined under section 14(1) of the 1981 Act, the natural and normal meaning of the term "landed" is to bring fish caught in the sea to land for the first time ("the narrower meaning"). Where fish have been landed in another country and are then transported into the UK, whether by road, rail, air, or sea, this would, in normal parlance, be described as importing the fish and not landing.
- The Claimants contend that this normal distinction as a matter of language between the terms "landed" and "imported" is confirmed by the fact that the draftsman of the 1981 Act clearly recognises elsewhere in the 1981 Act that importing is a clear and distinct activity. For example, in section 14(2), the definition of the "sea fish industry" includes the business of "importing sea fish or sea fish products". They further contend that this distinction between "landed" and "imported" is reflected in the legislation leading up to the 1981 Act.
- The Defendants accept that the word "landed" may have this narrower meaning, but they contend that it may also have the wider meaning of being brought to land rather than brought to land "for the first time" and that in the context of the 1981 Act it means being brought on to the land of the UK by any means, whether road, rail, air or sea ("the wider meaning").
- The Defendants emphasise that the meaning of words depend on their context. As stated by Lord Hoffman in Charter Reinsurance Co Ltd v Fagan [1997] AC 313, 391C:
- I accept, as do the Defendants, that in many contexts the word "landed" will have the narrower meaning contended for by the Claimants. In the context of recreational fishing, for example, it is likely to have that meaning. It is equally likely to do so in the context of catches of fish made by commercial fishing vessels.
- The Claimants provided a number of examples of the word "landed" having the narrower meaning in the context of legislation relating to fishing, and in particular the regulation of the catching of fish. Examples include:
- In the context of those legislative provisions I would generally accept that the words "landed" or "landing" have the narrower meaning. However, what matters is whether it has that meaning in the specific context of the 1981 Act.
- Looking first at the immediate context in which the word "landed" is used it is significant that in section 4(3) it relates not just to "sea fish" but also to "sea fish products". "Sea fish products" will cover a wide range of processed products, and could include, for example, smoked fish, cured fish or fishmeal. Such products are not going to be landed directly from the fishing vessel that caught the fish. Processing ashore is bound to have occurred.
- To counter this point the Claimants were driven to argue that "sea fish products" only covers products which had been through the limited amount of processing that can be done on board the fishing vessel itself, such as de-heading, gutting or filleting. However, the words used are general and unqualified and it is difficult to justify this implied restriction on their meaning. In terms of the imposition of and the benefits from a levy it is also difficult to discern why a marked distinction should be drawn between these different types of sea food products.
- Looking next at the general context of the 1981 Act, the duty of the SFIA is to exercise its powers "for the purpose of promoting the efficiency of the sea fish industry" and to "serve the interests of the sea fish industry" (section 2(1)). For that purpose it is empowered to "impose a levy on persons engaged in the sea fish industry" (section 4(1)).
- The "sea fish industry" is defined in section 14(2) and specifically includes persons who carry on in the UK the business of "importing sea fish or sea fish products".
- Importers are therefore included in the class of persons for whose benefit the SFIA is to exercise its powers and upon whom they are empowered to impose a levy. However, on the Claimants' construction the vast majority of importers fall outside the levy scheme altogether.
- The word "importing" means bringing sea fish into the United Kingdom, generally from another state (in which the sea fish must previously have been "landed" in the narrower sense argued for by the Claimants). On the Claimants' construction, such an importer can never be liable to pay the levy for the levy is only payable on fish "landed" in the sense of bringing fish which have been caught to land for the first time.
- The Claimants seek to get round this difficulty by suggesting that it would still cover foreign sea fish which was first landed in the UK. They contend that limiting the operation of the levy in this way is consistent with how it applies to UK caught sea fish. However, not only does this result in a very narrow class of importers, but since a purchaser of fish landed by a foreign vessel would already be covered by section 14(2)(b) as a wholesale purchaser or retail seller, there would be no need for a separate category of importers.
- The effect of the Claimants' construction is therefore largely if not completely to exclude importers from liability for the levy. This is inconsistent with the scheme of the 1981 Act as a whole, which includes importers as a class of persons for whose benefit the SFIA's powers are to be exercised, and section 14(2) in particular, which demonstrates a clear intention that importers shall be liable for the levy.
- Turning next to consider the context of other provisions of the 1981 Act, there are a number of provisions that strongly suggest that "landed" cannot sensibly have the narrower meaning contended for by the Claimants.
- First, and most significantly, there is section 4(8) as amended which provides that:
- Even in its unamended form section 4(8) suggests an expanded meaning of the word "landed" since it is covers fish farmed fish which may never go near a port to be "landed". However, the Channel Tunnel amendment suggests not only an expanded meaning but one which necessarily contradicts the narrower meaning. By definition, fish brought from France to the United Kingdom through the Channel Tunnel must first have been brought ashore in a state other than the United Kingdom.
- The Claimants' construction therefore produces the bizarre result that the 1981 Act covers sea fish imported by lorry carried by rail through the Channel Tunnel, but not sea fish carried by lorry on a Channel ferry. As the Claimants were constrained to accept, this would be anomalous.
- As stated in Bennion on Statutory Interpretation (5th ed, 2008), section 315, 287:
- It is well established that, in general terms, the effect of an amendment to a statute should be ascertained by construing the amended statute. Thus what is to be looked at is the amended statute itself as if it were a free-standing piece of legislation and its meaning and effect ascertained by an examination of the language of that statute as amended: Inco Europe Ltd. v. First Choice Distribution [1999] 1 WLR 270, 272-273 per Hobhouse LJ (CA).
- The Claimants sought to minimise the effect of the anomaly by contending that since the powers granted by the Channel Tunnel Act were limited to "things done or omitted or other matters arising anywhere within the tunnel system whether in England or France", no amendment made pursuant to the Channel Tunnel Act could have the effect of changing the extent to which levy could lawfully be imposed in circumstances which did not involve the Channel Tunnel. Therefore, although the amendment creates an anomaly nothing in the amendment can or should change the construction of the term "landed" which would have applied prior to the amendment (other than in relation to Channel Tunnel).
- The Claimants also referred to and relied upon Bennion section 82 dealing with consequential amendments in which it is stated at p297 that:
- I do not accept that it is correct to interpret the amended Act through the prism of the amending Act. One interprets the Act as a whole as it now stands. As stressed in Bennion in the section relied upon by the Claimants, where, as here, there are specific consequential amendments the statute user "has the amended provision as a single text and does not need to puzzle out how the new Act has altered the law".
- In any event, the amendment would only be making a "fundamental change" to the 1981 Act if the narrower meaning of "landed" was correct. If, as the Defendants contend, "landed" always had the wider meaning, then the amendment makes perfect sense, both in its drafting and its effect.
- The fact that the Channel Tunnel amendment clearly uses "landed" in its wider rather than its narrower meaning, and the anomalous consequences which would result if imports brought in by other means were not similarly subject to levies, therefore provide important support for the wider meaning.
- The other provision of the 1981 Act of particular contextual importance is section 2(2A), which provides that:
- One would expect this provision to apply to the sea fish industries of member states generally, rather than to parts of such industries, and for "sea fish industries" to have a similarly wide meaning to that given to "the sea fish industry in the United Kingdom" under section 14(3).
- If so, the provision would apply to, amongst other products, fish that have been brought ashore in another member state, processed and then imported into the UK, as borne out by the reference to "sea fish products from the sea fish industries of member States" (for sea fish products include those products that are prepared by processing in a factory on land) and to"sea fish industries of member States" (for sea fish industries include processors, importers and merchants – see section 14(3)).
- In order to fit with their case on construction, the Claimants have to contend that the levy only applies to sea fish caught in the national waters of another member state or by vessels which are part of the sea fish industry of another member state, and that it excludes processors, importers and merchants in other member states. However, the provision was designed to eliminate discrimination in favour of the UK sea fish industry against sea fish industries of other member states. It makes little sense to construe the provision as going to eliminate discrimination against only one sector of the sea fish industries of other member states, namely, the catching sector.
- For all these reasons, when one construes the word "landed" in the context of the 1981 Act as a whole, I have little doubt that the only sensible meaning to be given to the word landed is the wider meaning contended for by the Defendants, which on any view is a permissible meaning.
- Turning to consider the context of the 1981 Act itself, the Claimants laid stress on the legislative history to the 1981 Act and the distinction drawn in prior legislation between "landed" and "imported". They referred to various provisions in which this distinction had been drawn by the draftsmen.
- There is a long standing historical basis for the charging of a levy and there is statutory evidence of a power to charge the fishing industry a levy going back to 1935. Section 1 of the Herring Industry Act 1935 established the Herring Industry Board. Section 2 of that Act provided the Board with a power to make a scheme developing and regulating the herring industry.
- The Herring Industry Scheme 1935 was made under section 2 of the 1935 Act and came into force on 1st June 1935. The 1935 Scheme applied throughout the UK. Paragraph 23 provided for a levy on "first sales of fresh herring". Paragraph 2 defined "first sale" as "in relation to fresh herring, the first completed sale wholesale after the herring have been landed in or brought into the United Kingdom or, in the case of herring of British taking not landed in or brought into the United Kingdom, the first completed sale wholesale at sea, and "salesman" means the person who sells on a first sale". The Claimants relied on the juxtaposition of "landed in" and "brought into".
- Section 7 of the White Fish and Herring Industries Act 1948 provided the Herring Industry Board with a power to make, vary or revoke schemes for the development and regulation of the herring industry.
- The 1935 Scheme was continued in force until revoked by the Herring Industry Scheme 1951 which was made under Section 7 of the 1948 Act. The 1951 Scheme applied throughout the UK. A similar general levy provision was made in article 26 of the 1951 Scheme as had been in the 1935 Scheme. This provided the Board with a power to impose a general levy while article 27 provided for a special levy.
- Section 1 of The Sea Fish Industry Act 1951 constituted the White Fish Authority. Section 19 of the 1951 Act defined "white fish" as any fish found in the sea except herring, salmon and migratory trout. Section 15 provided for a levy. Section 5(6) of the 1951 Act provided for a Regulation-making power, subject to Ministerial confirmation. Section 19 defined "white fish industry" as "the white fish industry in Great Britain; and a person shall be deemed to engage in the white fish industry if he carries on the business of operating fishing vessels for the catching or landing of white fish, or if he carries on in Great Britain the business of selling white fish by wholesale or by retail or of processing white fish (including the business of a fish fryer)".
- The White Fish Authority (General Levy) Regulations Confirmatory Order 1951 came into force on 10th December 1951. It applied in Great Britain only. A near identical replacement, the White Fish Authority (General Levy) Regulations Confirmatory Order 1952, extended the application to the UK and came into force on 9th June, 1952. In both of these orders levy was to be paid on first-hand sale of white fish. "First-hand sale" was defined as:
- The White Fish Authority (General Levy) Regulations 1969 Confirmatory Order 1970 made similar provision to the 1952 order, the main exceptions being inclusion of provision for fish products and a schedule which provided for a levy differentiated by type of fish product. In this order "firsthand sale" was defined as:
- The Sea Fish Industry Act 1970 maintained the White Fish Authority and the Herring Industry Board. The 1970 order (in respect of white fish) and the 1951 Scheme (in respect of herring) continued in force.
- Section 17 of the 1970 Act provided that the authority shall have the power to impose a general levy for the purposes of financing the discharge of their functions. Section 17(1) provided that:
- Section 17(8) provided:
- The 1970 Act therefore raised a similar tension to the 1981 Act between a levy imposing power in respect of fish "landed", but which was apparently meant to apply to all persons engaged in the white fish industry, including importers. No one appears to have questioned the power to impose the levy on importers under the 1970 Act.
- The 1970 order was revoked by the White Fish Authority (General Levy) Regulations 1980 Confirmatory Order 1980. The 1980 order consolidated existing legislation (the 1970 order having twice been amended) and made provision for trans-shipment of fish and fish products. Article 1 provided for the levy to be paid on purchase of white fish or a white fish product on firsthand sale. The definition of "Firsthand sale" included: "(a) in relation to any white fish or white fish product which has been landed outside the United Kingdom and any white fish product manufactured outside the United Kingdom from such white fish or white fish product which in either case is purchased by a person carrying on business in the white fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid."
- The Claimants submit that this legislative history demonstrates a consistent and settled recognition of the distinction between fish being "landed" and "imported" and of them being treated as separate concepts. Reliance was placed upon Bennion Section 210 in which it is stated as follows (at pp599, 603):
- I am not satisfied that it would be correct to regard the relevant Acts in the present case as being equal rather than similar. Further, much of the material relied upon arises out of the Regulations rather than the Acts. In relation to prior Acts the only one which uses comparable wording to that contained in section 4(3) of the 1981 Act is section 17 of the 1970 Act, but that begs the same question.
- It is correct that historically the definition of first hand sales has frequently drawn a distinction between landing and importing, and the same point could be made in relation to the 1995 Regulations. However, one cannot derive from that practice the conclusion that throughout any legislation dealing with this subject matter, "landed" will always be used in its narrower meaning, regardless of context. It all depends on the specific context in which the word is being used.
- One point that does clearly emerge from the legislative history is that under all these schemes levies have always been imposed on imports. That being so, the obvious question which arises is why Parliament should have intended to change that policy under the 1981 Act. This is particularly so in circumstances where on any view importers are treated under the 1981 Act as being part of the sea fish industry, as they had been under the earlier legislation. Although it was suggested that this may have been because the 1981 Act was primarily intended to benefit the UK catching industry and therefore to cover catching importers only, it is not possible to deduce this from the 1981 Act. The reality is that no good reason has been advanced for why there should have been such a major change in policy.
- It is also striking that the language of section 4(3) of the 1981 Act is very similar to that of section 17(1) of the 1970 Act, under which levies were in practice imposed in importers. If there had been intended to be a change in policy one would therefore have expected different language to be used. Conversely, given that there had been no issue but that levies could be imposed on importers under the 1970 Act, if the intent was to carry on imposing levies on importers it is understandable why similar wording should be used in the 1981 Act.
- If anything, I therefore consider that the legislative history and, in particular, the long history of imposing levies on importers and the lack of any convincing explanation for a sudden and marked change in policy in that regard, supports the Defendants' case on construction.
- DEFRA also sought to place reliance on background materials relating to the 1981 Act in support of the defence case on construction. In particular, it sought to rely on explanatory notes and explanatory memoranda. In this connection I was referred to Bennion Section 219:
- It is therefore not necessary to show ambiguity before having regard to explanatory notes but their value is in identifying the contextual scene. They are not to be relied upon to seek to demonstrate the will of Parliament. In my judgment the notes sought to be relied upon by DEFRA did not go to contextual scene but rather to Parliamentary intent. As put in their pleadings, they were being relied upon as evidence that: "The intention of Parliament was that the levy raising power provided for by the legislation would apply to importers of sea fish and sea fish products". I do not consider this is permissible and therefore have no regard to the explanatory notes or memoranda.
- DEFRA also sought to rely on extracts from Hansard. As stated in Bennion Section 217:
- In the present case I am not satisfied that there is sufficient ambiguity or obscurity about the meaning of the material provisions of the 1981 Act to justify recourse to Hansard and I therefore decline to have regard to it.
- The Claimants' final argument on construction was that Parliament, when enacting section 4(3) of the Act, cannot have intended or cannot be taken to have intended, that Regulations might provide that the levy could be imposed on imports of fish (as distinct from landings of fish) because the imposition of such a levy would be in breach of what were then Articles 9 and 12 of the Treaty of Rome (and what are now Articles 23 and 25 of the EC Treaty).
- For reasons set out below, I do not accept that there would be such a breach and therefore this argument adds nothing. In any event, the argument proves too much since even on the Claimants' construction some importers will be subject to levies.
- In summary, I have reached the clear conclusion that section 4(3) has the wider meaning contended for by the Defendants and that the Regulations are not ultra vires the 1981 Act in so far as they authorise the imposition of a levy on imported sea fish or sea fish products.
- DEFRA (but not the SFIA) opposed the Claimants' proposed amendment to raise this issue. They contend that permission to amend should be refused because the claim (1) involves an abuse of process and (2) has no real prospect of success.
- I have dealt with the abuse of process argument above. Leaving that aside, no prejudice has been identified by DEFRA if the amendment is allowed. The claim made is clearly well arguable, is not opposed by the SFIA, and in the circumstances I consider that it is appropriate to exercise my discretion to grant permission for the amendment to be made.
- Article 23 of the EC Treaty provides:
- Article 25 of the EC Treaty gives effect to article 23 EC:
- The following relevant principles can be derived from the ECJ caselaw on articles 23 and 25:
- The first issue to be considered is therefore whether the levy on imports is a charge imposed on goods by reason of the fact that they pass a frontier. The Claimants submit that it is. They contend that the chargeable event triggering the payment of the levy in the case of the imported product will be the actual importation of the product. This is because of part (b) of the definition of "firsthand sale" under the Regulations which provides that in order for there to be a "firsthand sale" in relation to any sea fish first landed outside the UK there must not only be a purchase by a person carrying on business as a UK importer but the sea fish must also have been imported or brought into the UK as well. This is set out in Regulation 2 which provides that:
- The Claimants contend that the sea fish in question cannot be imported into the UK by the UK importer unless and until he has become the owner of the fish in question; thus the purchase by that importer must always precede the moment at which the goods are imported into the UK. In the circumstances the effect of part (b) of that definition is to delay the moment at which the firsthand sale takes place until the moment of importation.
- The Claimants place particular reliance upon the fact that Regulation relates to sea fish "which in either case is purchased by a person carrying on business in the sea fish industry and is imported or brought into the United Kingdom for the purposes of any such business"….They contend that this means that the importation had to be for the purpose of purchaser's business and that he must therefore necessarily have already purchased the sea fish.
- The Claimants also rely on their unchallenged witness evidence to the effect that as a matter of their practice purchase will invariably precede the importation of the fish.
- There is no doubt that the chargeable event as defined by the Regulations which is relevant to the present case is the "firsthand sale" of the sea fish. This is spelt out by Regulation 4(1)(a).
- Nor do I accept that under Regulation 2(b) purchase must necessarily precede importation. The sea fish has to be brought into the United Kingdom for the purpose of the sea fish industry business, but it does not have to be for the purpose of the importer's business. Further, the Regulation itself contemplates a sale "in the United Kingdom" and whatever may be the position in practice it is clearly possible for a sale to be made subsequent to importation. The original owner of the sea fish may, for example, bring the sea fish into the United Kingdom in order to store it and sell it subsequently to suit market conditions. Equally, even if a contract for the purchase of the sea fish has been made prior to importation, payment may not be made and property not pass until after importation, it being acknowledged that the passing of property marks the moment of sale.
- I therefore hold that the levy is not imposed on imports by reason of the fact that the sea fish passes a frontier. Even if it did, it would still not constitute a CEE if it formed part of a system of internal taxation applied systematically and in accordance with the same criteria to domestic products and imported or exported products alike.
- A levy can be lawfully imposed on goods at the time at which they cross a border provided that "the allegedly comparable charge levied on national products is applied at the same rate, at the same marketing stage and on the basis of an identical chargeable event" - Kapniki Mikhailidis AE v. Idrima Kinonikon Asphaliseon (Jointed Cases C-441 & 442/98) [2001] CMLR 13 at [24]. It was accepted that on this issue the onus of proof rests on the SFIA.
- The Claimants contend that:
- As to (1), this depends on establishing that a different chargeable event applies to imported products, a submission that I have rejected above.
- As to (2) and (3), if, as I have held, the levy is imposed on the first sale of the sea fish for all fish brought into the UK, whether brought ashore for the first time by fishermen or imported from another member state, it follows that the levy is imposed at the same marketing stage. In effect it is imposed when the sea fish is placed on the market and enters the supply chain. Further, if the products are not the same, then a different rate of levy can apply. In any event, the rate of levy paid on processed and unprocessed fish is proportionately the same. Section 4(4) requires that the burden of the levy shall not fall disproportionately on fish products, in excess of the burden placed on fish. The levy rate rises according to the proportion of inedible parts which are removed by processing. Thus the same total amount of levy should be payable on a fish irrespective of when sold in the UK it is gutted, headless, or filleted. I therefore reject the submission that the levy is imposed differently on domestic and imported fish/fish product.
- I accordingly conclude that the Regulations and/or the Act in so far as they authorise the imposition of a levy on sea fish which were landed outside the United Kingdom and then imported into the United Kingdom are not void as contrary to Articles 23 and/or 25 of the EC Treaty.
- The SFIA contend that the Claimants are in any event not entitled to restitution of any sum that they paid in levy, more than 6 years before issuing these proceedings because:
- The Claimants did not challenge (1), but disputed (2) on the facts.
- The Claimants bear the burden of proving that they could not have discovered their mistake with reasonable diligence:
- The Claimants contend that they could not with reasonable diligence have discovered the mistake earlier. They submit that reasonable diligence could not be said to require them, whenever a new piece of legislation relating to its sphere of operation came out, to instruct lawyers to consider the wording of the legislation and report back on it, and that this is what would be necessary for the mistake to be discovered.
- The difficulty with this submission is that the discovery of the mistake did not involve the instruction of lawyers. On the Claimants' own evidence, their Mr. Pilgrim considered that the 1981 Act could not apply to imported goods upon looking at the 1981 Act and the Regulations and their Mr. Holyoake found the legislation "totally transparent and clear" in this regard. The mistake was discovered simply on a reading of the 1981 Act and Regulations. The Claimants further contend that none of them could reasonably have been expected to read the legislation for themselves, but I do not accept that in relation to legislation such as this which was of obvious financial significance to them, and it is in any event belied by their own actions. The Claimants are substantial companies and were collectively paying levy on their products of up to about £76,000 per month on an ongoing basis.
- In all the circumstances, I am satisfied that a prudent person in the position of the Claimants would have read the 1981 Act and Regulations within a reasonable time of starting to pay the levy thereunder. If so, they would, on their own evidence, have discovered the mistake. I accordingly conclude that the exercise of reasonable diligence has not been proved and that the claim is accordingly barred by limitation in respect of any sum paid in levy more than 6 years before issuing these proceedings.
- The SFIA contend that in any event the claim in restitution on the grounds of mistake fails as it had changed its position in good faith in the belief that the Regulations were lawful. If so, it would mean that even if the mistake claim was not barred by limitation it would not avail the Claimants.
- Since it is accepted that this defence does not apply to the Woolwich claim its only relevance is to any claim that the Claimants may have in mistake beyond the limitation period. It is in that factual context that the issue therefore falls to be considered – i.e. whether the SFIA has changed its position in respect of levy received more than six years before the commencement of proceedings. In the present case that meant focusing on levy paid in 2001 and up to September 2002.
- In Scottish Equitable v Derby [2001] 3 All ER 818 the Court of Appeal endorsed the wider view of the defence of change of position and stated that although a causal link needed to be established one should not demand too demanding a standard of proof or a link to specific items of expenditure. They stated as follows:
- This case was considered and applied by Henderson J in FII in the context of a taxpayer's claim to recover corporate tax unlawfully demanded by the Revenue. He stated as follows:
- Although that case involved much larger sums of money which had been spent over a longer time than the present case, it is nevertheless instructive. It indicates that the mere fact that the recipient has spent the money is not enough. A causal connection must be shown, on at least a "but for" basis between the receipt and any expenditure or change of position upon which the defendant wishes to rely. However, in the context of government expenditure, there is no need to demonstrate a precise link between particular receipts and particular items of expenditure and that it is reasonable to infer that planned expenditure would not have taken place at the level which it did but for the availability of the tax receipts which were taken into account in fixing departmental budgets. In such circumstances it would be inequitable to require restitution to be made for tax which was paid by mistake when the money has long ago been spent in the public interest and everybody assumed in good faith that it had been validly levied.
- In relation to this issue the SFIA relied on the evidence of Mr. Rutherford, the SFIA's Chief Executive, who explained in his statement that:
- In all the circumstances the SFIA contends that it is clear that all the levy received more than six years before proceedings were commenced would have been spent by it, that it was spent in good faith on the assumption that the levy was valid, that it would have planned its budget and arranged its affairs accordingly, and that in those circumstances a sufficient causal link and inequity had been made out to establish the defence of change of position.
- The Claimants reserved the right to challenge the approach taken by Henderson J in FII in relation to the defence of change of position should this case go further (and also his decision that the defence was available to a mistake claim which is based on assumed lawfulness). In reliance upon Scottish Equitable v Derby they submit that in order to establish the necessary causal connection the SFIA had to prove that it would have acted differently if it had not received that part of the levy attributable to the Claimants, which it could not do.
- In my judgment, it is not necessary for the SFIA to show that it would have acted differently in 2001/2002 if it had not received the Claimants' specific levy contributions. It is sufficient if it can establish, as I find it has, that those contributions form part of levy monies which have been expended in good faith and that it has arranged its budgeting and planned its expenditure on the basis that it was entitled to receive and spend those monies.
- In the Scottish Equitable case upon which the Claimants relied it is to be noted that Mr Derby was entitled to rely on change of position in relation to money which had gone on increased spending by him. Similarly, in the present case it can be inferred that the SFIA spent more than it otherwise would have as a result of its receipt of the Claimants' levy payments.
- In all the circumstances I hold that the SFIA's change of position defence has been made out.
- In summary, even if it was otherwise liable in restitution to the Claimants, the SFIA would not be liable in respect of levy payments made more than six years before the commencement of these proceedings.
- For the reasons outlined above I therefore reject the Claimants' challenge to the legality of the levy imposed upon importers by the SFIA under the 1981 Act and the Regulations. I also hold that in any event the Claimants would only have been able to claim in respect of levy paid since 9 September 2002. I shall hear the parties further in relation to the Claimants' proposed amendment to raise a challenge to the legality of the levy on the basis of exclusive or disproportionate benefit.
Mr Justice Hamblen:
Introduction
"works across all sectors of the seafood industry to promote good quality, sustainable seafood. Our research and projects are aimed at raising standards, improving efficiency and ensuring that our industry develops in a viable way.
We are the UK's only cross-industry seafood body working with fishermen, processors, wholesalers, seafood farmers, fish friers, caterers, retailers and the import/export trade.
A Non Departmental Public Body (NDPB), we are sponsored by the four UK government fisheries departments and funded by a levy on seafood."
Outline of the case
The Issues for trial
(1) Is the Claimants' claim an abuse of process in that it seeks to raise a challenge to a public law act by means of a private law action depriving the Defendants of the protection guaranteed by CPR Part 54, and accordingly should the claim be struck out?
(2) Are the Regulations in so far as they authorise the imposition of a levy on sea fish which were landed outside the United Kingdom and then imported into the United Kingdom ultra vires section 4 of the 1981 Act?
(3) Are the Regulations and/or the 1981 Act in so far as they authorise the imposition of a levy on sea fish which were landed outside the United Kingdom and then imported into the United Kingdom void as contrary to Articles 23 and/or 25 of the EC Treaty?
(4) Are the Claimants' barred from claiming restitution of any levy payment made more than six years before the issue of proceedings on the grounds of (a) limitation and/or (b) change of position?
The Relevant Legislation
"An Act to establish a Sea Fish Industry Authority with the duty of promoting the efficiency of the sea fish industry in the United Kingdom…"
Section 2
2 Duties of the Authority
(1) [Subject to subsection (2A) below[2]] it shall be the duty of the Authority to exercise its powers under this Part of this Act for the purpose of promoting the efficiency of the sea fish industry and so as to serve the interests of that industry as a whole.
(2) In exercising its powers under this Part of this Act the Authority shall have regard to the interests of consumers of sea fish and sea fish products.
[(2A) If any levy imposed under section 4 below has effect in relation to sea fish or sea fish products from the sea fish industries of member States other than the United Kingdom, the Authority shall so exercise its powers under this Part of this Act as to secure that benefits are conferred on those industries commensurate with any burden directly or indirectly borne by them in consequence of the levy. [3]]
Section 3
Section 4
4 Levies
(1) For the purpose of financing its activities the Authority may impose a levy on persons engaged in the sea fish industry.
(2) Any levy under this section shall be imposed by regulations made by the Authority and confirmed by an order of the Ministers; and in this section "prescribed" means prescribed by such regulations.
(3) Regulations under this section may impose a levy either—
(a) in respect of the weight of sea fish or sea fish products landed in the United Kingdom or trans-shipped within British fishery limits at a prescribed rate which, in the case of sea fish, shall not exceed [2p[4]] per kilogram; or
(b) in respect of the value, ascertained in the prescribed manner, of sea fish or sea fish products landed or trans-shipped as aforesaid at a prescribed rate not exceeding 1 per cent of that value.
(4) If regulations under this section impose a levy as provided in subsection (3)(a) above the prescribed rate in relation to any sea fish product shall be such that its yield will not in the opinion of the Authority exceed the yield from a levy at the rate of [2p[5]] per kilogram on the sea fish required on average (whether alone or together with any other substance or article) to produce a kilogram of that product.
(5) Different rates may be prescribed for sea fish or sea fish products of different descriptions; and the Authority may repay the whole or part of the levy in such circumstances as it may determine but not so as to discriminate between different persons in the same circumstances.
(6) Any levy imposed under this section shall be payable by such persons engaged in the sea fish industry, in such proportions and at such times as may be prescribed; and the amount payable by any person on account of the levy shall be a debt due from him to the Authority and recoverable accordingly.
(7) The Ministers may by order increase or further increase the rate per kilogram specified in subsections (3)(a) and (4) above and the percentage specified in subsection (3)(b) above.
(8) For the purposes of this section—
(a) parts of a sea fish shall be treated as sea fish products and not as sea fish;
(b) references to the landing of fish include references to the collection for consumption of sea fish which have been bred, reared or cultivated in the course of fish farming whether in the sea or otherwise [and references to the landing of fish or fish products include references to bringing them through the tunnel system as defined in the Channel Tunnel Act 1987.[6]]
....
Section 14
14 Interpretation of Part I
(1) In this Part of this Act—
…
"sea fish" means fish of any kind found in the sea, including shellfish and, subject to section 4(8)(a) above, any part of any such fish but does not include salmon or migratory trout.
(2) For the purposes of this Part of this Act other than [sections 2(2A) and 3(5)[7]] "the sea fish industry" means the sea fish industry in the United Kingdom and a person shall be regarded as engaged in the sea fish industry if—
(a) he carries on the business of operating vessels for catching or processing sea fish or for transporting sea fish or sea fish products, being vessels registered in the United Kingdom; or
(b) he carries on in the United Kingdom the business of breeding, rearing or cultivating sea fish for human consumption, of selling sea fish or sea fish products by wholesale or retail, of buying sea fish or sea fish products by wholesale, of importing sea fish or sea fish products or of processing sea fish (including the business of a fish fryer).
2. Interpretation
In these Regulations, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them—
…
"firsthand sale" means—
(a) in relation to any sea fish or sea fish product which has been first landed in the United Kingdom the first sale thereof (other than a sale by retail) whether prior to or after landing in the United Kingdom;
(b) in relation to any sea fish or sea fish product which has been first landed outside the United Kingdom and any sea fish product manufactured outside the United Kingdom from such sea fish or sea fish product which in either case is purchased by a person carrying on business in the sea fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid;
(c) in relation to any sea fish or sea fish product which is trans-shipped within British fishery limits, the first sale thereof,
"sale by retail" means a sale to a person buying otherwise than for the purpose of resale or processing or use as bait, and includes a sale to a person for the purposes of a catering business (other than a fish frying business); and "sell by retail" has a corresponding meaning;
"wholesale merchant" means a person selling or offering for sale sea fish or sea fish products otherwise than by retail.
…
4 Imposition of Levy
(1) There shall be paid to the Authority subject to and in accordance with the provisions of these Regulations by every person engaged in the sea fish industry who—
(a) purchases any sea fish or any sea fish product on a firsthand sale; or
(b) trans-ships within British fishery limits any sea fish or, any sea fish product by way of firsthand sale; or
(c) lands any sea fish or sea fish product in the United Kingdom for subsequent sale other than in the United Kingdom;
a levy (hereinafter referred to as "the levy") at the rate per kilogram set out in the second column of the Schedule hereto in respect of any sea fish or sea fish product specified opposite thereto in the first column of the said Schedule so purchased or trans-shipped or landed by him.
(2) The levy shall not be payable in respect of any live sea fish purchased for cultivation or in respect of canned or bottled sea fish or sea fish products.
(3) If any sea fish or any sea fish product is purchased on a firsthand sale through or from a wholesale merchant the levy shall be paid to the Authority by the said wholesale merchant, who shall be entitled to recover as a civil debt from the purchaser of such sea fish or sea fish product a sum equal to the amount of the levy so paid.
(4) Where the levy becomes payable by any person in respect of any sea fish or sea fish product trans-shipped within British fishery limits by way of firsthand sale by him, it shall not be payable by any person who subsequently purchases such fish or fish product.
(5) Where any sea fish or sea fish product is trans-shipped by way of sale within British fishery limits more than once, the levy shall be payable in respect of the first such trans-shipment only.
(6) Where the levy becomes payable in respect of any sea fish it shall not be payable in respect of the products of such sea fish.
5 Time Limits for Payment
(1) Levy payable by a person who purchases any sea fish or sea fish product on a firsthand sale shall be paid to the Authority within seven days after the week end of –
(a) the week during which there took place the firsthand sale of the fish or fish product in respect of which the levy is payable; or
(b) the week during which such fish or fish product was imported or brought into the country;
whichever is the later.
(2) Levy payable by a person who trans-ships any sea fish or sea fish product by way of firsthand sale shall be paid to the Authority within seven days after the end of the week during which there took place the trans-shipment of the fish or fish product in respect of which the levy is payable.
(3) Levy payable by a person who lands any sea fish or sea fish product for subsequent sale other than in the United Kingdom shall be paid to the Authority within seven days after the end of the week during which there took place such landing of the fish or sea fish product in respect of which the levy is payable."
The Issues
(1) Is the Claimants' claim an abuse of process in that it seeks to raise a challenge to a public law act by means of a private law action depriving the Defendants of the protection guaranteed by CPR Part 54, and accordingly should the claim be struck out?
(1) restitution for money paid pursuant to an ultra vires demand by a public authority (a so-called 'Woolwich claim' after Woolwich Equitable Building Society v. Inland Revenue Commissioners [1993] AC 70);
(2) restitution for money paid under a mistake.
"34 The court's approach to what is an abuse of process has to be considered today in the light of the changes brought about by the CPR Those changes include a requirement that a party to proceedings should behave reasonably both before and after they have commenced proceedings. Parties are now under an obligation to help the court further the overriding objectives which include ensuring that cases are dealt with expeditiously and fairly: CPR., rr. 1.1(2)(d) and 1.3. They should not allow the choice of procedure to achieve procedural advantages…
…
39 The emphasis can therefore be said to have changed since O'Reilly v. Mackman [1983] 2 AC 237. What is likely to be important when proceedings are not brought … under Order 53, will not be whether the right procedure has been adopted but whether the protection provided by Order 53 has been flouted in circumstances which are inconsistent with the proceedings being able to be conducted justly in accordance with the general principles contained in Part 1. Those principles are now central to determining what is due process." (emphasis added)
"where a litigant asserts his entitlement to a subsisting right in private law, whether by way of a claim or defence, the circumstance that the existence and extent of the private right may incidentally involve the examination of a public law issue cannot prevent the litigant from seeking to establish his right by action commenced by writ or originating summons"
"the revenue has contended that the proper procedure was for Woolwich to seek to challenge its decision not to pay interest by way of judicial review, although it would of course contend that no order should be made on such a review in the present case. I do not accept this. If a claim lies for money had and received, judicial review adds nothing. If the money fails in law to be repaid, a direct order for its repayment is more appropriate than a declaration that it should repay it or an order setting aside a refusal to repay."
"Since O'Reilly v Mackman decisions of the House of Lords have made clear that the primary focus of the rule of procedural exclusivity is situations in which an individual's aim was to challenge a public law act or decision. It does not apply in a civil case when an individual seeks to establish private law rights which cannot be determined without an examination of the validity of a public law decision".
(1) The Claimants were "asserting an entitlement to a subsisting right in private law" which "may incidentally involve the examination of a public law issue" [28]; or
(2) the "primary focus" or "dominant issue" is to challenge a public law act or decision.
(2) Are the Regulations in so far as they authorise the imposition of a levy on sea fish which were landed outside the United Kingdom and then imported into the United Kingdom ultra vires section 4 of the 1981 Act ?
(1) First, does the SFIA have unfettered discretion to impose any levy it wishes on any person engaged in the sea fish industry or can a levy only be imposed that complies with section 4(3) of the 1981 Act?
(2) Second, if section 4(3) limits the levy raising powers of the SFIA, what is the proper construction of the term "sea fish or sea fish products landed in the United Kingdom".
(a) Does the SFIA have unfettered discretion to impose any levy it wishes on any person engaged in the sea fish industry or can a levy only be imposed that complies with section 4(3) of the 1981 Act?
(b) If section 4(3) limits the levy raising powers of the SFIA, what is the proper construction of the term "sea fish or sea fish products landed in the United Kingdom".
"I think that in some cases the notion of words having a natural meaning is not a very helpful one. Because the meaning of words is so sensitive to syntax and context, the natural meaning of words in one sentence may be quite unnatural in another. Thus a statement that words have a particular natural meaning may mean no more than that in many contexts they will have that meaning. In other contexts their meaning will be different but no less natural."
(1) Article 10 of the Registration of Fish Buyers and Sellers and Designation of Fish Auction Sites Regulations 2005/1605 which provides that:
"Any person who sells first sale fish which has been landed in the United Kingdom otherwise than by a licensed fishing vessel is guilty of an offence."
(2) The Sea Fish (Conservation) Act 1967 and in particular to sections 1(1), 1(5), 4(6)(a), 6(1), 6(5), 7, 8, 9(1). Section 9(1), for example, refers to:
"Nothing in section 1(1) or (5) of this Act shall restrict the landing of fish taken in the course of fishing operations.."
(3) The Salmon and Migratory Trout (Restrictions on Landing) Order 1972/1966, Article 2 of which provides:
"landing" in relation to salmon and migratory trout means the first landing thereof after catching and "land" shall be construed accordingly."
(4) EU legislation relating to the Common Fisheries Policy, and in particular to EU Regulations 753/80, 2057/82, 2241/1987, 2847/1993 and 2371/2002.
"references to the landing of fish include references to the collection for consumption of sea fish which have been bred, reared or cultivated in the course of fish farming whether in the sea or otherwise [and references to the landing of fish or fish products include references to bringing them through the tunnel system as defined in the Channel Tunnel Act 1987]."
"The court seeks to avoid a construction that creates an anomaly or otherwise produces an irrational or illogical result".
"Interpretation of consequential provisions It is presumed that Parliament, in making amendments to an Act dealing with one subject matter which are purely consequential on the passing of an Act dealing with a quite different subject matter, does not intend (as it were by a side wind) to make any fundamental change in the former Act".
"If any levy imposed under section 4 below has effect in relation to sea fish or sea fish products from the sea fish industries of member States other than the United Kingdom, the Authority shall so exercise its powers under this Part of the Act as to secure that benefits are conferred on those industries commensurate with any burden directly or indirectly borne by them in consequence of the levy".
"(a) in relation to white fish which has been landed outside the United Kingdom, but which is purchased by a person carrying on business on the white fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid;
(b) in relation to any other white fish, the first sale thereof (other than a sale by retail) after it has been landed in the United Kingdom".
The Claimants stressed the contrast between fish being "landed" and being "imported or brought into" the UK.
"(a) in relation to any white fish or white fish product which has been landed outside the United Kingdom and to any white fish product manufactured outside the United Kingdom from such white fish or white fish product which in either case is purchased by a person carrying on business in the white fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid;
(b) in relation to any other white fish product which is landed in the United Kingdom, the first sale thereof (other than a sale by retail) whether prior to or after it has been landed in the United Kingdom".
Again the Claimants stressed the contrast between fish being "landed" and being "imported or brought into" the UK.
"(1) The Authority shall have power for the purpose of financing the discharge of their functions,-
(a) to impose a general levy on persons engaged in the white fish industry-
(i) in respect of white fish landed in Great Britain, at a prescribed rate not exceeding 2 d. for each stone of white fish landed; and
(ii) in respect of white fish products so landed, at a prescribed rate in respect of each stone of the products;"
"References in subsections (1) and (6) above to persons engaged in the white fish industry shall be construed as including references to persons carrying on in Great Britain the business of buying the products of white fish by wholesale or of importing white fish or their products."
"(3) Under the Barras principle, where an Act uses a form of words with a previous legal history, this may be relevant in interpretation. The question is always whether or not Parliament intended to use the term in the sense given by this earlier history.
…
Acts in pari materia The following are in pari materia
…
d) Other Acts which deal with the same subject matter on the same lines.
Here it must be remembered that the Latin word par or paris means equal, and not merely similar. Such Acts are sometimes described as forming a code. This does not mean that the Acts are codifying Acts however.
If the Acts are in pari materia it is assumed that uniformity of language and meaning was intended, attracting the same considerations as arise from the linguistic canon of construction that an Act is to be construed as a whole."
When a Public Bill is before Parliament, various kinds of explanatory material may be provided by the promoter of the Bill (usually the government) for the use either of members of Parliament or of ministers seeking to explain the Bill's provisions. Since these are designed to throw light on the meaning of the Bill, they are of obvious relevance when the Bill has become an Act.
…
The current position regarding explanatory notes was outlined by Brooke LJ:
"The use that courts may make of Explanatory Notes as an aid to construction was explained by Lord Steyn in R (Westminster City Council) v NASS [2002] UKHL 38 at [2]-[6]; [2002] 1 WLR 2956; see also R (S) v Chief Constable of South Yorkshire Police [2004] UKHL 39 at [4], [2004] 1 WLR 2196. As Lord Steyn says in the NASS case, Explanatory Notes accompany a Bill on introduction and are updated in the light of changes to the Bill made in the parliamentary process. They are prepared by the Government department responsible for the legislation. They do not form part of the Bill, are not endorsed by Parliament and cannot be amended by Parliament. They are intended to be neutral in political tone: they aim to explain the effect of the text and not to justify it.
The text of an Act does not have to be ambiguous before a court may be permitted to take into account an Explanatory Note in order to understand the contextual scene in which the Act is set (NASS, para [5]). In so far as this material casts light on the objective setting or contextual scene of the statute, and the mischief to which it is aimed, it is always an admissible aid to construction. Lord Steyn, however, ended his exposition of the value of Explanatory Notes as an aid to construction by saying (at para [6]):
"What is impermissible is to treat the wishes and desires of the Government about the scope of the statutory language as reflecting the will of Parliament. The aims of the Government in respect of the meaning of clauses as revealed in Explanatory Notes cannot be attributed to Parliament. The object is to see what is the intention expressed by the words enacted".
The value of … Explanatory Notes as an aid to construction … is that it [sic] identifies the contextual scene … That is all. If, however, it is impossible to treat the wishes and desires of the Government about the scope of the statutory language as reflecting the will of Parliament, it is in my judgment equally impossible to treat the Government's expectations as reflecting the will of Parliament. We are all too familiar with statutes having a contrary result to that which the Government expected through no fault of the courts which interpreted them".
(1) In arriving at the legal meaning of an enactment to which this section applies, the court may have regard to any statement, as set out in the Official Report of Debates ('Hansard') on the Bill for the Act, which satisfies the requirements of subsections (3) to (5) below, together with such other parliamentary material (if any) as is relevant for understanding that statement and its effect. In allowing an advocate to cite such material the court must ensure that he or she does not in any way impugn or criticise the statement or reasoning of the person making it.
(2) This section applies to an enactment contained in an Act where, in the opinion of the court construing the enactment, it is ambiguous or obscure, or its literal meaning leads to an absurdity.
(3) The statement must be made by or on behalf of the Minister or other person who is the promoter of the Bill.
(4) The statement must disclose the mischief aimed at by the enactment, or the legislative intention underlying its words.
(5) The statement must be clear".
(3)Are the Regulations and/or the 1981 Act in so far as they authorise the imposition of a levy on sea fish which were landed outside the United Kingdom and then imported into the United Kingdom void as contrary to Articles 23 and/or 25 of the EC Treaty?
"1. The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.
2. The provisions of Article 25 and of Chapter 2 of this title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States. "
"Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.
There is no exception in the Treaty to justify charges contrary to article 25. Therefore if the levy imposed pursuant to the 1981 Act is a charge having equivalent effect ("CEE") to such a duty then that levy insofar as it applies, would be incompatible with article 25.
(1) Customs duties are forbidden, independently of any consideration of the purposes for which they are levied or of the destination of the revenue they raise. This is because the justification for such a prohibition rests on the fact that any pecuniary charge, however slight, imposed on goods by reason of the fact that they pass a frontier, is an obstacle to the movement of goods: Sociaal Fonds voor de Diamantarbeiders, Antwerp v. S. A. Ch. Brachfeld & Sons, Antwerp (C-2/69) [1969] CMLR 335, 349 ('Diamantarbeiders'). The same principle applies to a CEE.
(2) As the objective of articles 23 and 25 is the prohibition of customs duties and CEEs with respect to trade between member states, it follows that the provisions do not concern the importation or exportation of products coming from or destined for non-member countries: Hansen v. Hauptzollamt Flemsburg (C 148/77) [1979] 1 CMLR 604 at [22]; Lamaire NV v. Nationale Dienst voor Afzet Van Land-en Tuinbouwproduckten (C-130/93) [1995] 3 CMLR 534 at [15].
(3) The principal characteristic of a CEE, just as a customs duty, is the imposition of the charge by reason of the fact that the goods pass a frontier. It is immaterial whether the imported product competes with a domestic product or a domestic product is thereby protected. As the ECJ held in Diamantarbeiders (at p349):
"… any pecuniary charge, however slight, which is imposed unilaterally on national or foreign goods by reason of the fact that they cross a national border, and which is not stricto sensu a customs duty, is a tax of equivalent effect within the meaning of Articles 9 and 12 of the Treaty, whatever the name by which it is known, even if the proceeds are not paid over to the State, even if it has no discriminatory or protective effects and even if the product so taxed does not compete with any similar product of national manufacture […]"
(4) Even if it is shown that a charge is imposed on goods by reason of the fact that they cross a frontier, it will escape classification as a CEE if it can be established that the charge is related to a system of internal dues applied systematically and in accordance with the same criteria to domestic products and imported or exported products alike under article 90 EC (former article 95), i.e., if it forms part of a system of internal taxation.[8] As the ECJ held in Diamantarbeiders (at pp349-350):
"In this connection, it follows from Article 95 et seq. that the concept of tax of equivalent effect does not include taxes imposed in the same way, within a State, on similar or comparable national products, or at least, in the absence of such products, taxes falling within the general system of taxation or aimed at compensating, within the limits laid down by the Treaty, such internal taxes."
As the ECJ further held in Denkavit Loire Sarl v. Administration des Douanes (C 132/78) [1979] 3 CMLR 605, 613 ('Denkavit') at [7]:
"[A charge] escapes that classification [as a CEE] if it relates to a general system of internal dues applied systematically and in accordance with the same criteria to domestic products and imported products alike, in which case it does not come within the scope of articles 9, 12, 13 and 16 but within that of article 95 of the Treaty".
Accordingly, a charge may be levied on products by reason of the fact that they are imports and nevertheless not constitute a CEE. In Gaston Schul Douane Expediteur BV v. Inspecteur der Invoerrechten en Accunzen, Roosendaal (Case 15/81) [1982] 3 CMLR 229 ('Gaston Schul') at [18]-[20], the Court held that where VAT was levied on the sale price of imports and on the sale price of goods within the country, the import tax did not fall to be considered under ex article 12 EC but under article 90 EC. The relevant VAT directives had (at [21]):
"established a uniform taxation procedure covering systematically and according to objective criteria both transactions carried out within the territory of the member-States and import transactions. It should be pointed out in particular in that respect that the common system makes imports and supplies of like goods within the territory of a member-State subject to the same rate of tax. As a result the tax in question must be considered as an integral part of a general system of internal taxation for the purposes of Article 95 of the Treaty and its compatibility with Community law must be considered in the context of that article and not of that of Articles 12 et seq. of the Treaty."
(5) It is well established that article 25 EC and article 90 EC are mutually exclusive. The same charge cannot constitute both a CEE and an internal tax. The former is unlawful but the latter lawful to the extent that it does not discriminate in favour of domestic products: see, for example, Industria Gomma Articoli Vari (Igav) v. Ente Nazionale per la Cellulosa E per la Carta (C-94/74) [1976] 2 CMLR 37, 53 at [6]; Nygård v. Svineafgiftsfonden (C-234/99) [2002] ECR I-3657 at [17]; De Danske Bilimportøorer v. Skatteministeriet, Told-og Skattestyrelsen (C-383/01) [2003] 2 CMLR 1265, 1288 at [33].
(6) In order for a charge to form part of a system of internal taxation, it must be shown that:
(a) The charge applies to both domestic and imported products. As the Court held in Gaston Schul at [19]:
"The essential characteristic of a charge having an effect equivalent to a customs duty, and the one which distinguishes it from internal taxation, is therefore that it affects only imported products as such whereas internal taxation affects both imported products and domestic products".
And;
(b) Domestic and imported products are subject to the same duty in respect of the same products at the same marketing stage and that the chargeable event giving rise to the duty is identical. As the Court held in Denkavit (at [8]):
"It is however appropriate to emphasise that in order to relate to a general system of internal dues, the charge to which an imported product is subject must impose the same duty on national products and identical imported products at the same marketing stage and that the chargeable event giving rise to the duty must also be identical in the case of both products."
"firsthand sale" means—
(a) in relation to any sea fish or sea fish product which has been first landed in the United Kingdom the first sale thereof (other than a sale by retail) whether prior to or after landing in the United Kingdom;
(b) in relation to any sea fish or sea fish product which has been first landed outside the United Kingdom and any sea fish product manufactured outside the United Kingdom from such sea fish or sea fish product which in either case is purchased by a person carrying on business in the sea fish industry and is imported or brought into the United Kingdom for the purposes of any such business, the first sale thereof (whether in the United Kingdom or elsewhere) to such a person as aforesaid;"
"(1) There shall be paid to the Authority subject to and in accordance with the provisions of these Regulations by every person engaged in the sea fish industry who—
(a) purchases any sea fish or any sea fish product on a firsthand sale";
Under the definition of "first hand sale" in Regulation 2, the levy will only be payable provided the sea fish has been brought into the United Kingdom, but in my judgment it is the sale that is the chargeable event. The fact that conditions have to be satisfied for the levy to be payable does not alter the fact that it is the sale that is the basis of liability for the levy. Equally the time limits for payment of the levy under Regulation 5 do not affect the nature of the event which founds liability for the levy.
(1) the domestic and imported products are not subject to the levy on the basis of an identical chargeable event since the chargeable event for imports is importation rather than sale levy.
(2) the levy is imposed differently on domestic and imported sea fish because whereas the domestic product is typically fresh fish which has not been processed at all, or which has been subject to only the limited type of processing which may be carried out on board a fishing vessel (e.g. de-heading, gutting and some limited filleting), the imported product is typically frozen which has been manufactured as a result of a second phase of processing (e.g. the preparation of the sea fish into sizes suitable for the retail market, glazing, packaging and so forth – the sort of processing which can only be carried out at a land-based processing plant).
(3) the levy is imposed on domestic and imported fish/fish products at different marketing stages, because the levy will be imposed on the domestic product after initial (first phase) processing only, whereas the levy will be imposed on the imported after the secondary phase of processing referred to above.
(4)Are the Claimants' barred from claiming restitution of any sum paid in levy more than six years before the issue of proceedings on the grounds of (a) limitation and (b) change of position?
Limitation
(1) the claim for restitution of money paid in tax or levy pursuant to an ultra vires demand (the 'Woolwich claim') is statute-barred after 6 years, as the claim would be subject to the ordinary 6 year limitation period - see Deutsch Morgan Grenfell Group Plc v. Inland Revenue Commissioners [2006] UKHL 49, [2007] 1 AC 558 ('DMG') at [37] per Lord Hoffmann. Further, section 32(1)(c) of the 1980 Act does not apply to such claims. Under that provision, a limitation period may be postponed where the action is for relief from the consequences of a mistake, but mistake is not a necessary ingredient of a Woolwich claim: DMG at [13] per Lord Hoffmann; see also Claimants in FII Litigation v R & C Comrs ("FII") [2009] STC 254 at [243], [260] per Henderson J.
(2) the claim for restitution of money paid under mistake is statute-barred after 6 years, unless the Claimants can avail themselves of section 32(1)(c) on the grounds that they did not discover the mistake and could not with reasonable diligence have discovered the mistake earlier.
(1) The burden of proof under section 32 is on the party seeking to rely on that section in order to postpone the limitation period - see Paragon Finance Plc v. D B Thakerar & Co [1999] 1 All ER 400, 418 b-c ('Paragon') per Millett LJ.
(2) The test of reasonable diligence has been said to require proof that the mistake could not have been discovered without:
129.2.1. Taking exceptional measures which they could not reasonably have been expected to take: See Paragon at p418c per Millett LJ and/or
129.2.2. doing more than that which an ordinarily prudent person in the position of the Claimants would have done having regard to all the circumstances: See, Peco Arts Inc v. Hazlitt Gallery Inc [1983] 1 WLR 1315, 1323 per Webster J.
Change in position
"30. The judge noted the view, put forward by Andrew Burrows (The Law of Restitution (1993) pp.425–8) that there is a narrow and a wide version of the defence of change of position, and that the wide view is to be preferred. The narrow view treats the defence as "the same as estoppel minus the representation" (so that detrimental reliance is still a necessary ingredient). The wide view looks to a change of position, causally linked to the mistaken receipt, which makes it inequitable for the recipient to be required to make restitution. In many cases either test produces the same result, but the wide view extends protection to (for instance) an innocent recipient of a payment which is later stolen from him (see Goff & Jones, The Law of Restitution 5th ed (1998) p.822, also favouring the wide view).
31. In this court Mr Stephen Moriarty QC (appearing with Mr Richard Handyside for Scottish Equitable) did not argue against the correctness of the wide view, provided that the need for a sufficient causal link is clearly recognised. The fact that the recipient may have suffered some misfortune (such as a breakdown in his health, or the loss of his job) is not a defence unless the misfortune is causally linked (at least on a 'but for' test) with the mistaken receipt. In my view Mr Moriarty was right to make that concession. Taking a wide view of the scope of the defence facilitates "a more generous approach .. to the recognition of the right to restitution" (Lord Goff in Lipkin Gorman at p.581; and compare Lord Goff's observations in Kleinwort Benson v Lincoln City Council [1999] 2 AC 349 at p.385 A–F).
…
33. I would readily accept that the defence is not limited (as it is, apparently, in Canada and some states of the United States: see David Securities Pty v Commonwealth Bank of Australia (1992) ALJR 768 , 780, noted in Goff & Jones at p.819) to specific identifiable items of expenditure. I would also accept that it may be right for the court not to apply too demanding a standard of proof when an honest defendant says that he has spent an overpayment by improving his lifestyle, but cannot produce any detailed accounting: see the observations of Jonathan Parker J in Philip Collins v Davis [2000] 3 AER 808 , 827, with which I respectfully agree."
"343. I now turn to the factual elements of the defence. I remind myself that the mere fact that the recipient has spent the money is not enough, and that a causal connection must also be shown, on at least a "but for" basis, between the receipt and any expenditure or other change of position upon which the defendant wishes to rely. Scottish Equitable v Derby suggests, albeit in a very different factual context, that the defence is not limited to specific identifiable items of expenditure, and that it will often be inappropriate to apply too demanding a standard of proof where an honest defendant has spent the money but cannot account for it in detail. How, then, should the court approach the question in a case where the Revenue has received many millions of pounds of mistakenly paid tax over a period stretching back for more than 30 years?
344. To state the obvious, taxation is not imposed for its own sake, but in order to fund government expenditure. It is one of the two main ways in which public expenditure is funded, the other being public sector borrowing. One would expect government spending decisions, at a policy level, to be reached at least in part on the basis of the tax revenues which it has received in the past, and which it expects to receive in the future. Even if tax revenues are not spent immediately, common sense suggests that they will be used up over a fairly short period, and that it is probably safe to assume that tax receipts which predated the claims in the present case by more than six years, and therefore fell outside the scope of a Woolwich claim with its six year limitation period, will have been exhausted well before the commencement of the action. As a matter of causation, no precise link can be demonstrated between particular receipts and particular items of government expenditure, but common sense again suggests that planned government expenditure would not have taken place at the level which it did but for the availability of the tax receipts which were taken into account in fixing departmental budgets. If all concerned, both the government and the taxpayers, proceeded on the footing that the tax was validly levied, I ask myself what is wrong with the argument that it would now be inequitable to require the Revenue to make restitution for the tax which was paid by mistake, because the money in question has long ago been spent in the public interest, and everybody assumed in good faith that it had been validly levied? I confess that, once the question is stated in these terms, the answer to it seems to me to be obvious. It would in my judgment be inequitable to require repayment in such circumstances, always bearing in mind that the claimants have a perfectly good separate San Giorgio claim for repayment of the unlawfully levied tax itself, free from any change of position defence.
345. It may be objected to my analysis that the necessary causal link is not made out, because it would always have been open to the government to raise the necessary money in a different way (for example by borrowing, or by an increase in tax rates, or by a corresponding cut in expenditure elsewhere, or by a combination of those methods) if the mistakenly paid tax had not been available to it. However, although this argument has superficial attractions, it seems to me to miss the point. What matters is the existence of a causal link between the tax revenues which were in fact received and the expenditure which was actually made. The fact that the money could have been raised in a different way is, in my judgment, neither here nor there.
346. A related objection is that, once departmental spending policy has been fixed and budgeted for, the various items or heads of expenditure should be regarded as commitments which have to be honoured, and are thus analogous with debts which have to be paid off in one way or another, rather like the mortgage in Scottish Equitable v Derby . In my view the answer to this point is again the same. Departmental spending plans are themselves likely to be predicated in part on the receipt of identifiable tax revenues, and (if so) they cannot be treated as purely extraneous obligations which the government would anyway be under an obligation to fund.
347. I must also clear away one major misconception which, as it seems to me, has bedevilled much of the pleading and evidence on this issue. Most of the Revenue's pleaded case in support of its change of position defence is directed to establishing the proposition that it would now cost an enormous amount, and would severely disrupt public finances, if the Revenue had to pay the claimants' claims in full: see the particulars which I have quoted in paragraph 310 above. Similarly, much of the evidence of Mr Ramsden (to which I will come in the next section of this judgment), and most of his cross-examination by Mr Aaronson, was devoted to that aspect of the matter. But the relevant question is not what it would now cost the Revenue to meet a judgment, or how it could reasonably expect to do so. The relevant question is whether the Revenue has in the past changed its position, on the strength of the receipts paid under a mistake, in such a way that it would now be inequitable to require the Revenue to make restitution. That question is correctly pleaded in paragraph 31 of the Amended Defence, and is reflected in the simple and (to my mind) compelling point made in paragraph 32, namely that the sums in question formed part of the UK's tax revenue for the years in which they were paid, and have since been irretrievably spent, in some cases decades ago."
(1) The SFIA reaches its spending decisions principally on the basis of the levy income which it has received in the past and expects to receive in the future.
(2) The SFIA proceeds in good faith on the basis of its belief that the levy is lawful, and that it is entitled to receive levy and disburse its proceeds on the SFIA's activities.
(3) The SFIA's income is approximately equivalent to its expenditure but for the financial year ending March 2009, the SFIA will report a deficit of about £1.2 million.
Conclusion
Note 1 For simplicity further references to “sea fish” mean sea fish and sea fish products [Back] Note 2 Words in square brackets inserted by SI 1989/1190, reg 2. [Back] Note 3 Words in square brackets inserted by SI 1989/1190, reg 2. [Back] Note 4 Sum in square brackets substituted by SI 1990/1641, art 2. [Back] Note 5 Sum in square brackets substituted by SI 1990/1641, art 2. [Back] Note 6 Words in square brackets inserted by SI 1994/1390, art 2. [Back] Note 7 Words in square brackets substituted by SI 1989/1190, reg 2(4). [Back] Note 8 Article 90 EC provides: “No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.
Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.” [Back]