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United Kingdom Special Commissioners of Income Tax Decisions
You are here: BAILII >> Databases >> United Kingdom Special Commissioners of Income Tax Decisions >> Jimenez v Inland Revenue [2004] UKSC SPC00419 (23 June 2004)
URL: http://www.bailii.org/uk/cases/UKSPC/2004/SPC00419.html
Cite as: [2004] UKSC SPC419, [2004] UKSC SPC00419
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- The Appellant, Mrs. Jimenez, appeals against refusals of claims made under section 33 Taxes Management Act 1970 ("TMA") (error or mistake) for the years 1992/93 to 2000/01 inclusive. The claims were made by a single letter dated 23rd April 2001. In short, Mrs. Jimenez claimed repayment of tax she had paid for these years because, she submitted, she was in all the years of assessment concerned exempt from United Kingdom income tax by virtue of article 37(3) the claim referred to article 37(4) but no point is taken on that of the Vienna Convention on Diplomatic Relations signed in 1961 ("the 1961 Convention"), which has the force of law in the United Kingdom pursuant to section 2 of and Schedule 1 to the Diplomatic Privileges Act 1964 ("DPA").
- Article 37(3) of the 1961 Convention is as follows:
- Mrs. Jimenez was (and remains) employed as a cook by the Namibian High Commission in London (by a letter of appointment dated 3rd February 1992, confirmed after a probationary period by a letter dated 1st May 1992). She is a national of the Republic of the Philippines, and she argues that she has never been "permanently resident" in the United Kingdom.
- Her claim was (ultimately) formally refused by the Board of Inland Revenue by a letter dated 3rd December 2001. Although the Inland Revenue refused Mrs. Jimenez's claim for exemption generally on the merits, the claims in relation to 1992/93 and 1993/94 were refused because they were made outside the six-year time limit provided by section 33(1) TMA. Mr. Ewart, for Mrs. Jimenez, accepted that I must dismiss the appeal in relation to these two years of assessment, for this reason. I do so accordingly.
- In their letter refusing the claim, the Inland Revenue also took the point that no claim under section 33 TMA was competent for the years 1999/2000 or 2000/01 because, in the case of 1999/2000, the self-assessment return was still the subject of an enquiry and "until any enquiry is concluded I do not consider that any self-assessment can be considered to be excessive as your self-assessment for this year is not yet finalised", and in relation to 2000/01 no return had been received with the result that there was no self-assessment which could be excessive by reason of an error in the return. These points were not disputed in the appeal by Mr. Ewart and I therefore dismiss the appeal formally in relation to these two years of assessment as well.
- The parties' submissions before me addressed the issue of whether Mrs. Jimenez qualified for exemption from United Kingdom taxes on emoluments received by her by reason of her employment by the Namibian High Commission in London. Formally, the result on the appeal in relation to the years of assessment 1994/95 to 1998/99 inclusive depends on my decision on this issue. According to the Schedule attached to Mrs. Jimenez's claim, the tax payments made for these years totalled £5,494.44, out of a total claim for £8,103.49.
- The parties' respective arguments on the main issue did not engage with each other: they were ships passing in the night. To extend the metaphor, although they each traversed the same water (the construction of article 37(3) of the 1961 Convention) they started at different ports (the Appellant at article 37(3) itself; the Revenue at what it asserted were the rules of customary international law) and navigated by different stars (the Appellant by the plain meaning of English words and an analogy with the English law of domicile; the Revenue by accepted state practice, specifically United Kingdom practice, on the 1961 Convention). It is not surprising, then, that they arrived at different destinations.
- An Agreed Statement of Facts was before me. In addition, Mrs. Jimenez provided a Witness Statement and gave evidence in person. She was cross-examined by Mr. Qureshi for the Inland Revenue.
- I find the following facts from the Agreed Statement:
- Mrs. Jimenez came to the United Kingdom on 23rd April 1991 on a visit from the Philippines.
- She commenced employment for the Namibian High Commission in London in January 1992 as a cook. Before that she had worked for the Zambian High Commission in London.
- Mrs. Jimenez was at all times designated as "locally engaged staff" by the Namibian High Commission. She signed the High Commission's "conditions of employment for locally recruited staff" on 29th January 1993. She worked as a cook from January 1992 to September 1999 and as a receptionist from then until 2002. In that year she began to work again as a cook.
- Mrs. Jimenez paid United Kingdom tax (Schedule E). The Namibian High Commission did not at the material time(s) operate PAYE. For the years when self-assessment applied, a computation of liability was generated based upon the self-assessment return made.
- Mrs. Jimenez sought leave for her husband and four daughters to join her in the United Kingdom, but obtained leave only for her husband and youngest daughter (then 15) to enter the United Kingdom, in 1994.
- Mrs. Jimenez's youngest daughter was granted leave to remain in the United Kingdom whilst, inter alia, she remained a member of the family forming part of Mrs. Jimenez's household.
- I find the following facts from Mrs. Jimenez's evidence (given both by her Witness Statement and orally) which supplement the above agreed facts.
- Mrs. Jimenez visited the United Kingdom from the Philippines in April 1991 accompanying her niece (aged 15) and great-nephew (aged 8) on a two-month visit to Mrs. Jimenez's brother-in-law and his wife, who lived here.
- The children returned to the Philippines on 15th June 1991. Mrs. Jimenez decided to stay on for a short time to have a holiday by herself.
- On 12th June 1991 there was an eruption of Mount Pinatubo in the Philippines, which lies to the north-west of Manila. The farm on which Mrs. Jimenez's husband worked was destroyed by the aftermath of the eruption. It also very severely impeded the surface communications with Manila, which Mrs. Jimenez's own business depended on.
- On or about 20th June 1991, Mrs. Jimenez agreed with her husband that the best thing for the family would be if she found work and stayed on legally in the United Kingdom. They were particularly concerned about their ability to continue financing their daughters' education.
- Mrs. Jimenez sought the advice of the Philippines embassy in the United Kingdom. She was informed that in order to remain in the United Kingdom legally she would be well advised to get a job with a diplomatic mission. Through a contact in the Philippines embassy, she almost immediately obtained a job as a cook with the Zambian High Commission. That job started in late June 1991. However it ended at about the end of that year, but in January 1992 she found work as a cook at the Namibian High Commission.
- In September 1992, Mrs. Jimenez returned to the Philippines on a visit to her mother who was ill. When she returned to the United Kingdom in October 1992 she found that she was exempt from immigration control as a member of a diplomatic mission. Her passport was endorsed by the United Kingdom Home Office on 9th October 1993 to show that "while the holder is employed as a cook at [the] Namibian High Commission, she is not subject to any condition or limitation on the period of permitted stay in the United Kingdom".
- Mrs. Jimenez's husband, who had joined her (with their youngest daughter) in the United Kingdom in June 1994, started to get ill with depression in March 1995. He returned to the Philippines in March 1999, only to return to the United Kingdom in June 1999. He tried to set up a business in the United Kingdom, but it was unsuccessful. He returned to the Philippines permanently in April 2000.
- Mrs. Jimenez says that she intends to return to the Philippines herself. According to her Witness Statement (dated 23rd January 2004), this will be when the present proceedings are resolved. According to her letter of 23rd April 2001, claiming repayment of tax, she intended to return to the Philippines "in the next two years" and was "only remaining in the United Kingdom so that my youngest daughter can finish her university education and I can settle any outstanding debts here". She added in that letter "At no point in time have I intended to remain in the UK beyond the completion of my daughter's education". However in evidence Mrs. Jimenez stated that her daughter had in fact given up full-time education in 1999 after one year at university and was no longer living with her. She also said that her understanding was that she is able legally to remain in the United Kingdom "as long as I am with the [Namibian] Mission". I infer (and find as a fact) that her current intention is to return to the Philippines (to retire and join the members of her family who are there) either when she has decided that she no longer wants to work at the Namibian High Commission, or when that job ends (otherwise than on her initiative).
- There is in evidence a certificate, dated 2nd February 2004, issued under section 4 of the DPA (see below) by C.R.L. de Chassiron, Head of Protocol Division, Foreign and Commonwealth Office, in the following form:
- There is also in evidence the text of a Circular, dated 27th January 1969 ("the 1969 FCO Circular"), issued by the then Foreign and Commonwealth Secretary (Mr. Michael Stewart) to the Heads of Diplomatic Missions in London giving guidance on the determination of whether or not particular persons employed in diplomatic missions should be regarded as persons permanently resident in the United Kingdom. The 1969 FCO Circular avowedly sets out "certain principles on this subject which have been formulated by Her Majesty's Government in the light of greater experience of the administration of the [DPA]".
- There is also in evidence a letter dated 20th July 1993 from the Namibian High Commission to the Foreign and Commonwealth Office (Protocol Department) applying for the further extension of Mrs. Jimenez's visa, enclosing her passport for the purpose and describing her as "employed by this mission as a cook".
- There is also in evidence a letter dated 4th November 1999 from the Namibian High Commission (Mr. Japhet Isaack, Acting High Commissioner) to the Diplomatic Liaison Officer of the Inland Revenue, enclosing a list of locally engaged staff (as requested by the Revenue), which included Mrs. Jimenez's name, address, nationality (Philippines), occupation (cook/housekeeper) and salary. I also have before me a copies of information provided to or for the Inland Revenue in July, 1995, June 1996, October 1997 and May 1998 by the Namibian High Commission about locally-engaged staff, which includes similar information about Mrs. Jimenez. I find from the documentary evidence before me that Mrs. Jimenez informed the Diplomatic Liaison Officer that she was claiming exemption from tax by reason of her work as a cook for the Namibian High Commission as early as 16th February 1995.
- The Agreed Statement of Facts and Issues lists the following two issues: (1) Was [Mrs. Jimenez] a member of the service staff of the mission at any material time? And (2) Was [she] permanently resident in the United Kingdom at any material time? As the argument developed, however, it became clear that this was not an adequate summary. There is a further compound issue, namely, is notification under article 39(1) of the 1961 Convention necessary for Mrs. Jimenez to found her case for exemption, and, if it is, was there the required notification?
- It is necessary to set out further provisions of the DPA and the 1961 Convention in order that the scope and content of these issues can be appreciated.
- The relevant provisions of the DPA provide as follows:
- Mr. Ewart, for Mrs. Jimenez, submitted that she fulfilled the conditions for exemption from taxes on the emoluments she received by reason of her employment at the Namibian High Commission in that, in terms of article 37(3) of the 1961 Convention she was a "member of the service staff" of the Namibian High Commission, not a national of the United Kingdom and not permanently resident in the United Kingdom.
- Mr. Ewart observed that it was common ground that Mrs. Jimenez was not a national of the United Kingdom. He submitted that she was, as a matter of fact, a member of the service staff of the High Commission relying on her appointment as a Cook in relation to which documentary evidence (which I accept) as to the approval of that appointment (by a letter dated 3rd February 1992) and as to its confirmation (by a letter dated 1st May 1993), with signed "Conditions of Employment for locally recruited staff" was before me.
- Mr. Ewart submitted that the Commissioners' argument that Mrs. Jimenez was not a "member of the service staff of the" Namibian High Commission for the purposes of article 37(3) of the 1961 Convention because she had not been notified as a member of the mission (as evidenced by Mr. de Chassiron's certificate) was misconceived. He relied on the decision of the Court of Appeal in R v Secretary of State for the Home Department ex parte Bagga [1991] 1 All ER 777 as authority for the proposition that there is no requirement for notification as a condition precedent to the acquisition of the status of a member of a mission.
- Mr. Ewart's primary case was that the appeal was simply a matter of the construction and application of article 37(3) of the 1961 Convention.
- He said that at a late stage, after skeleton arguments had been settled, Mr. Qureshi had raised the point that article 39 must also be satisfied if a person entitled to exemption is to enjoy it. (It is correct that neither skeleton argument makes reference to article 39.) Mr. Ewart's response was that, if that was so, there had been sufficient notification within article 39(1) of the 1961 Convention, citing the letter dated 20th July 1993 from the Namibian High Commission to the Foreign and Commonwealth Office (Protocol Department) applying for the further extension of Mrs. Jimenez's visa, enclosing her passport for the purpose and describing her as "employed by this mission as a cook" and the letters from the Namibian High Commission referred to in paragraph 28 above.
- Mr. Ewart further submitted that whether the Appellant was at any time "permanently resident" in the United Kingdom was an issue of interpretation which should be resolved having regard to the principles enunciated by Mummery J in IRC v Commerzbank AG [1990] STC 285, see in particular pp.297f-298h. These principles emphasise that the exercise is to give effect to "the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose" (a citation made by Mummery J (at p.298c/d) from article 31(1) of the Vienna Convention on the Law of Treaties). Mr. Ewart argued that the ordinary meaning of "permanently resident" had been elucidated in the context of the private international law concept of the acquisition of a domicile of choice by Rule 10 of Dicey and Morris on The Conflict of Laws (every independent person can acquire a domicile of choice by the combination of residence and intention of permanent or indefinite residence, but not otherwise). Rule 10 is elaborated by Rules 11 and 12. He invited me to adopt the same approach, by analogy, to the construction of "permanently resident" in the context of article 37(3) of the 1961 Convention. Specifically, he argued that the Appellant cannot have been permanently resident in the United Kingdom at any time since the evidence was that she had not at any time had the intention to reside permanently or for an unlimited time in this country (the animus manendi referred to in Dicey and Morris).
- Mr. Ewart's submission on the 1969 FCO Circular was that it could not bind me as to the interpretation of the phrase "permanently resident", as that was a question of law for me. He pointed out that the context of the 1969 FCO Circular was the administration of diplomatic relations between the government and foreign missions, not an appeal in which the true meaning of the 1961 Convention was in issue. This point was made clear by, in particular, paragraph 4 of the 1969 FCO Circular which suggested a consultation procedure to resolve any "difference of opinion" which might arise between a Mission and Her Majesty's Government as to whether an individual is permanently resident here.
- Mr. Qureshi, for the Revenue, presented his case under six headings: (1) an overview; (2) the 1961 Convention; (3) the proper approach to construction; (4) the DPA, and what he described as the "gateway" and "doorkeeper" provisions; (5) the requirement and significance of notification; and (6) the question of permanent residence.
- Mr. Qureshi stressed that the 180 States were signatories of the 1961 Convention and that the underlying purpose of the Convention was to give a framework for reciprocity between the signatory States. In consequence, he submitted, an individual can claim immunity under the 1961 Convention only by reason of his connection with a State, and in consequence of his relationship with a State. He illustrated this principle by observing that sending States (not individuals) can waive immunities arising under the Convention, and receiving States (not individuals) can declare an individual persona non grata.
- He explained the distinction between entitlement to privileges and immunities and enjoyment of them (which is brought out by article 39(1) of the 1961 Convention) against this background. As a matter of diplomatic usage, he submitted, entitlement to privileges and immunities is conferred by the sending State (for example by the employment of an individual) and enjoyment of privileges and immunities is conferred by an act of the receiving State (for example, following notification). He described article 37(3), read with the definitions in article 1, which provides entitlement to (in this case) exemption from taxes on emoluments as the "gateway" provision. He described article 39(1), which provides for enjoyment of privileges and immunities, as the "doorkeeper" provision.
- Mr. Qureshi supported his submissions by reference to extensive extracts from a publication called "Diplomatic Law A Commentary on the Vienna Convention on Diplomatic Relations" (second edition) by Eileen Denza, published by the Oxford University Press. I was told that Ms. Denza was formerly a senior lawyer at the Foreign and Commonwealth Office. Mr. Qureshi adopted as part of his submissions Ms Denza's comments to the effect that state practice is recognised as having a function in clarifying ambiguities in the 1961 Convention. Thus, Ms. Denza states, at page 6 of her Introduction: "To be sure of the meaning of many of its [the 1961 Convention's] provisions it is still important to go back to the customary law, and many of the ambiguities in the Convention have now been clarified by consistent state practice". Mr. Qureshi submitted that the basis for this comment is to be found in, among other provisions, the fourth and fifth indents of the Preamble to the 1961 Convention, viz:
- Mr. Qureshi submitted that the proper approach to the interpretation of the 1961 Convention, as a treaty or international instrument, should be that set out by Lord Steyn in his speech in R v Secretary of State for the Home Department, ex parte Adan [2001] 1 WLR 143. In particular, it is necessary to determine the autonomous meaning of the relevant treaty provision (ibid. at p.153E). Lord Steyn referred in particular to article 31 (General rule of interpretation) of the Vienna Convention on the Law of Treaties (1980) (Cmnd 7964), which provides as follows:
- Mr. Qureshi submitted that article 39 of the 1961 Convention must be read in conjunction with article 10, even thought article 39 was, but article 10 was not, included in the Schedule to the DPA listing those Articles of the 1961 Convention which have the force of law in the United Kingdom. The effect of this submission was that the reference in article 39(1) to enjoyment of privileges and immunities "from the moment when [an] appointment is notified to the Ministry of Foreign Affairs or such other ministry as may be agreed" must be interpreted having regard to the requirement for notification contained in Article 10. That is to say, the "notification" referred to in article 39 is, according to Mr. Qureshi, notification qua member of a mission pursuant to article 10, and not any other form of notification.
- Mr. Qureshi contended that the Bagga case did not assist the Appellants, because in that case it was accepted that the individuals concerned had been designated as members of the mission by the sending State and it was a case concerning individuals entering the jurisdiction, whereas this is a case of an individual already present in the United Kingdom being employed by a mission here.
- Mr. Qureshi relied on Mr. de Chassiron's Certificate and its effect pursuant to section 4 of the DPA to conclude (against the Appellant) the factual issue of whether her appointment had been notified in accordance with article 39(1), and whether she was a member of a mission. In support of this submission, Mr. Qureshi argued that section 4 exists because the factual basis pursuant to which entitlement to diplomatic privileges and immunities arises is a matter for the sending State and the receiving State, and that if this were not so, there would arise the possibility of an individual being able as a matter of law to clothe himself or herself with diplomatic privileges and immunities which, as he had already explained, would be contrary to principle.
- Mr. Qureshi's primary submission was that Mrs. Jimenez was never a member of a mission (and, so, she was never a member of the service staff of the Namibian mission) and that therefore no further enquiry as to whether she fulfilled the other conditions in article 37(3) was required or appropriate. His secondary submission was that, although the Commissioners accepted that she was not a national of the United Kingdom, she was "permanently resident" in the United Kingdom for the purposes of article 37(3) and, for that reason also, was disqualified from exemption from tax on her emoluments.
- In support of this secondary submission, Mr. Qureshi relied on the 1969 FCO Circular in which, at paragraph 3, the Foreign and Commonwealth Secretary suggested to the Heads of Mission addressed that:
- Mr. Qureshi informed me that these provisions of the 1969 FCO Circular had never been challenged by Heads of Mission and he submitted that they represented practice which was reflective of customary international law. They were, he submitted, part of a proper, studied, consistent approach to the question of permanent residence.
- In this case, Mr. Qureshi submitted, Mrs. Jimenez's right to remain in the United Kingdom was not tied to employment with a diplomatic mission.
- Mr. Qureshi criticised Mr. Ewart's approach to the resolution of the issue of whether Mrs. Jimenez was permanently resident in the United Kingdom by analogy with the United Kingdom law of domicile, which he submitted was a "distinctive feature of the legal system of the United Kingdom" and, thus, following Lord Steyn's reasoning in ex parte Adan (ibid. p.154F), inappropriate to be a source for the derivation of the independent, autonomous meaning which it was appropriate to give to the terms of the 1961 Convention.
- As to Mrs. Jimenez's lack of intention to reside permanently or for an unlimited time in this country, as relied on by Mr. Ewart, Mr. Qureshi challenged this conclusion on the evidence, suggesting that her intention was to remain in this country for her own financial reasons for an indeterminate period. In particular, the suggestion made by her at various times, that she intended to remain here only until her daughter's education was completed, was not borne out by the evidence. Mr. Qureshi submitted that it was at least arguable that Mrs. Jimenez had acquired an English domicile, although it was not part of his case that she had done so.
- On any view, this appeal turns on an interpretation and application of provisions of the 1961 Convention (whether article 37(3) on its own, which was Mr. Ewart's primary submission, or article 37(3) in the light of article 39(1) and article 10, as contended for by Mr. Qureshi). The starting point for my decision therefore is to examine the authorities which have been cited to me as guidance as to how I should interpret treaty provisions. These are Commerzbank, cited by Mr. Ewart, and ex parte Adan, cited by Mr. Qureshi.
- I have already noted that both Mummery J in Commerzbank and Lord Steyn in ex parte Adan referred to article 31 (General rule of interpretation) of the Vienna Convention on the Law of Treaties. Further, in both cases, it is emphasised that the court's object is to interpret treaty terms "unconstrained by technical principles of English law, or by English legal precedent, but on broad principles of general acceptation" (per Lord Wilberforce in James Buchanan & Co. Ltd. v Babco Forwarding & Shipping (UK) Limited [1978] AC 141 at 152, cited in both authorities, in Commerzbank at ibid. p.298b/c and in ex parte Adan at ibid.pp.153/154). In ex parte Adan this principle is further described as a search for the "true autonomous and international meaning" of the treaty (ibid. p.154G).
- Mr. Ewart's reliance on the references in Commerzbank to the "clear meaning of the words used in the relevant article of the convention" (ibid. at p.297h/j) cannot exclude a consideration of the purposes of the convention as a whole, as expressed, in particular by other articles bearing on the meaning or operation of the article principally in review. He submitted that "one only gets to a purposive construction where the ordinary meaning of the provision is either unclear or ambiguous or leads to a result which is manifestly absurd or unreasonable" (referring to the fourth principle, derived from Fothergill v Monarch Airlines [1981] AC 251 and cited by Mummery J in Commerzbank at ibid. p.298). But that is presented by Mummery J as a condition precedent to having recourse to "supplementary means of interpretation" (for example, travaux prιparatoires) pursuant to article 32 of the Vienna Convention on the Law of Treaties. I have no doubt that I must construe article 37(3) of the 1961 Convention having regard to whatever light article 39(1) and article 10 of the same Convention throw on the Convention's object and purpose.
- Therefore I must consider how to interpret a provision which gives exemption from tax on emoluments to members of the service staff of the mission (article 37(3)) in the light of a provision in the same Convention which provides that a person "entitled to" such an exemption shall "enjoy" it from the moment (in the circumstances of this appeal) when his or her appointment is notified to the Secretary of State concerned (article 39(1) interpreted in accordance with section 2(1), DPA).
- Further, I must have regard for these purposes to the requirement (provided by article 10) that the Ministry of Foreign Affairs of (in this case) the United Kingdom shall be notified of the engagement of persons resident in the United Kingdom as members of a mission entitled to privileges and immunities. I note that this requirement is not imported into our domestic law by the DPA, and is therefore not subject to the interpretation provisions of section 2(1), DPA, but this does not, in my view, affect its relevance in the interpretation of article 37(3). I also note that there is no evidence before me of any agreement to substitute another ministry for the Ministry of Foreign Affairs for the purposes of article 10, and so I proceed on the basis that the relevant requirement under article 10 is to make notification to the Foreign and Commonwealth Secretary.
- This suggests that notification of Mrs. Jimenez's appointment to the Foreign and Commonwealth Secretary pursuant to article 10 is a pre-requisite to her "enjoyment" of exemption from tax under article 37(3). Does the decision of the Court of Appeal in Bagga, on which Mr. Ewart relied, show the contrary?
- Bagga was a case on section 8(3) of the Immigration Act 1971 in its state of amendment before further amendment by the Immigration Act 1988. Section 8(3) relevantly provided that immigration controls did not apply to any person who was not a British citizen "so long as he is a member of a mission (within the meaning of the [DPA]". The definition of "members of the mission" in article 1 of the 1961 Convention (as set out above at paragraph 31) was in point, and, having regard to the terms of article 39(1) of the 1961 Convention, the first issue for decision by the Court of Appeal was formulated by Parker LJ as follows: "Does the exemption from immigration control only apply upon notification by the mission or embassy to the Foreign and Commonwealth Office of appointment or employment and, possibly, acceptance by that office of the appointment, or can it apply prior to notification (and acceptance)?" (ibid. at pp.784-5). By section 8(3) of the 1971 Act, exemption from immigration control was dependent and dependent only on whether the person concerned was a member of a mission within the meaning of the DPA (cf. ibid. at p.785c). Parker LJ concluded (departing from earlier authorities) that status as a member of a mission ("save, possibly, in the case of a head of a mission or other person of diplomatic rank" ibid. p.788a/b) did not depend on notification or acceptance, but merely on the fact of appointment to some post in the mission, or employment by the mission in fact ibid. p.786a. Glidewell and Leggatt LJ agreed with this conclusion.
- Although Bagga is, in my judgment and as Mr. Ewart submitted, authority for the proposition that the status of a member of a mission does not require notification under the 1961 Convention, the case also makes it clear that enjoyment of diplomatic immunities by a person (such as Mrs. Jimenez) who is already in this country does depend on notification by reason of article 39 of the 1961 Convention (see ibid. pp.785b and f, 794h), and the circumstances relating to when a person begins to enjoy the benefits conferred by the DPA are described as "what may be diplomatic niceties" by Parker LJ at ibid. p.785j.
- Mr. Ewart agreed that in order to win the appeal he needed to show that Mrs. Jimenez was not only entitled to the exemption but also enjoyed it from a time relevant to her claims in respect of the years 1994/95 to 1998/99. I therefore go on to consider whether there has been the necessary notification.
- I accept Mr. Qureshi's submissions as to the rationale and purpose of these complementary articles (37(3) and 39(1)) in the Convention and, as I have already indicated, I consider that the necessary notification must be notification by the sending State (usually by or on behalf of its Head of Mission) to the Foreign and Commonwealth Secretary pursuant to article 10, that is, notification qua member of a mission. This is, in my view, inherent in the fact that such notification concerns "what may be diplomatic niceties".
- It seems to me, therefore, that I am not permitted to go behind the certificate under section 4 of the DPA which is before me. Mr. de Chassiron has certified on the Foreign and Commonwealth Secretary's authority that Mrs. Jimenez has not been notified to the FCO as a member of a diplomatic mission in the United Kingdom. I must accept that fact and therefore hold that Mrs. Jimenez cannot enjoy any exemption from tax. I must therefore dismiss this appeal.
- However, for completeness, and in deference to the detailed arguments which were addressed to me, I will deal briefly with the following points: the status of the various factual notifications of Mrs. Jimenez's employment to emanations of the United Kingdom government, and the question of whether she has at any relevant time been "permanently resident" in the United Kingdom for the purposes of article 37(3) of the 1961 Convention.
- Mrs. Jimenez was regarded by the Namibian High Commission as "locally recruited staff". This is made clear by her conditions of employment. I consider that I can reasonably assume that this is an indication that the Namibian High Commission, bearing in mind the terms of the 1969 FCO Circular, regarded Mrs. Jimenez as an employee to whom paragraph 3(iii) of that Circular applied that is, a person who is locally engaged and who is presumed to be permanently resident in the United Kingdom unless the Head of Mission concerned shows that [she] is going to return to [her] own country or to proceed to a third country immediately on the termination of [her] appointment in the United Kingdom. The Namibian High Commission never acted to rebut this presumption.
- The notifications which were made, and which were relied upon by Mr. Ewart, were factual notifications that Mrs. Jimenez was employed by the mission, and, in the case of the notifications with information for tax purposes, that she was employed as locally engaged staff, a term which, it seems to me, carries the connotation that she was presumed to be permanently resident here.
- As I have already indicated (in paragraph 62 above), these notifications do not in my judgment, amount to notification within the meaning of article 39(1) of the 1961 Convention, having regard to article 10 of that Convention. Indeed I cannot see any logic in making a private notification of this kind a pre-condition for the enjoyment of diplomatic privileges and immunities (including exemption from tax). Of course a person claiming exemption would have to prove membership of a mission, but private notification of that status seems to me to add little in the context of a legal precondition to enjoyment of the privileges and immunities. On the other hand, official recognition of the status (which notification pursuant to article 10 conveys) by the sending State (and, presumably, the receiving State) has the substance which one would expect a legal precondition to the enjoyment of the privileges and immunities to contain.
- Turning to the question of whether Mrs. Jimenez was "permanently resident" in the United Kingdom, this, also, of course, is a question of interpretation of the 1961 Convention. The principles of the interpretation of treaty provisions which I have set out above apply to this question also. I must apply "broad principles of general acceptation" in the search for the "true autonomous and international meaning" of the expression as it is used in the context of article 37(3) of the 1961 Convention.
- In accordance with article 31(3) of the Vienna Convention on the Law of Treaties (referred to by Lord Steyn in ex parte Adnan see: paragraph 43 above), I ought to take into account "any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation". Mr. Qureshi has informed me that the provisions of the 1969 FCO Circular (which certainly records "subsequent practice in the application of the treaty" bearing on the meaning of "permanently resident") have never been challenged by the Heads of Mission in the United Kingdom (and Mr. Ewart did not dissent from this). Therefore I consider I should have regard to it in accordance with article 31(3) of the Vienna Convention on the Law of Treaties, and I further consider that it is reflective of customary international law which, by the fifth indent of the Preamble to the 1961 Convention "should continue to govern questions not expressly regulated by the provisions of the [1961] Convention".
- The terms of paragraph 3 of the 1969 FCO Circular (see: paragraph 48 above) as applied to this case lead to the conclusion that Mrs. Jimenez should not be regarded as permanently resident in the United Kingdom for the purposes of article 37(3) of the 1961 Convention.
- I reject Mr. Ewart's submission that it is appropriate for me to decide this question by analogy with the English law rules relative to the acquisition of a domicile of choice. It seems to me that the intention of permanent or indefinite residence which falls to be considered in the context of the domicile issue is not the same (or even a similar) concept as or to the concept of whether a person who is a foreign national is permanently resident in the receiving State, so as thereby to be deprived of privileges and immunities (including exemption from tax) under the 1961 Convention. I am not surprised by the conclusion that "permanently resident" for these purposes effectively means resident for a purpose unconnected with the holding of the status of membership of the mission. In this sense, it is simply the converse of "impermanently resident" for the purposes of the mission.
- Having said that, I also (at the very least) doubt seriously Mr. Qureshi's suggestion that it was arguable that Mrs. Jimenez had acquired an English domicile. I have set out (at paragraph 24 above) my findings as to her intentions in relation to future residence in the United Kingdom and I consider that they are most unlikely to support a case that she has acquired an English domicile. However that is an issue which I do not have to decide and I therefore say no more about it.
- Finally, I would comment that the Inland Revenue's correspondence to Mrs. Jimenez in relation to this dispute could not have been very helpful to her in explaining exactly why she did not qualify for exemption from tax. It is not surprising that she was not satisfied with being told simply that "the term (permanently resident) is a term used in the [DPA] to describe an individual who was living in the UK at the time of their appointment" (the Inland Revenue Diplomatic Liaison Officer's letter to her dated 1st August 2001). It would, I am sure, have assisted her and her advisers if a much more detailed account of the Revenue's reasons for dismissing her claim had been given in the correspondence.
- My conclusion is that although Mrs. Jimenez was at the relevant times a member of the service staff of the Namibian High Commission, she was permanently resident in the United Kingdom within the meaning of article 37(3) of the 1961 Convention and for that reason disqualified from exemption from tax under that article. Moreover, even if she was not permanently resident in the United Kingdom within the meaning of article 37(3), she is in any case prevented from enjoying any such exemption because there was no appropriate notification of her appointment as required by article 39(1) of the 1961 Convention.
- For these reasons, and with grateful recognition of the assistance rendered to me by both Counsel in their careful submissions, I dismiss the appeal in relation to the years of assessment 1994/95 to 1998/99 inclusive. (I have already dismissed the appeal in relation to the years of assessment 1992/93 and 1993/94, and 1999/2000 and 2000/01 see: respectively, paragraphs 4 and 5 above.)
SPC00419
INCOME TAX Appeal against a refusal of an "error or mistake" claim: s.33 TMA 1970 claim for exemption from UK income tax on emoluments received by reason of employment as member of the service staff of a diplomatic mission: article 37(3) of the Vienna Convention on Diplomatic Relations, 1961, having the force of law in the United Kingdom by virtue of section 2 of the Diplomatic Privileges Act 1964 held that the Appellant, although a member of the service staff of a diplomatic mission was permanently resident in the United Kingdom within the meaning of article 37(3) and therefore disqualified from exemption held further that even if she was not so permanently resident she was in any case prevented from enjoying such exemption because there was no appropriate notification of her appointment as required by article 39(1) of the Convention appeal dismissed: Article 10 of the Convention, article 31 of the Vienna Convention on the Law of Treaties, 1980, section 4 of the Diplomatic Privileges Act 1964, IRC v Commerzbank AG [1990] STC 285, R v Secretary of State for the Home Department, ex parte Adan [2002] 1 WLR 143, R v Secretary of State for the Home Department, ex parte Bagga [1991] 1 All ER 777 also considered.
THE SPECIAL COMMISSIONERS
LUTGARDA JIMENEZ
Appellant
Respondent
David Ewart, of Counsel, instructed by the Mary Ward Legal Centre, for the Appellant
Khawar Qureshi, of Counsel, instructed by the Solicitor of Inland Revenue, for the Respondent
Introduction
"3. Members of the service staff of the mission who are not nationals of or permanently resident in the receiving State shall enjoy immunity in respect of acts performed in the course of their duties, exemption from dues and taxes on the emoluments they receive by reason of their employment and the exemption contained in Article 33."
The Facts
"Under the authority of Her Majesty's Principal Secretary of State for Foreign and Commonwealth Affairs conferred on me and in accordance with the provisions of Section 4 of the Diplomatic Privileges Act 1964, I, Charles Richard Lucien de Chassiron, Head of Protocol Division at the Foreign and Commonwealth Office, hereby certify that Mrs Lutgarda Jimenez has not been notified to or received by the Foreign and Commonwealth Office as a member of a diplomatic mission in the United Kingdom."
The Issues
The DPA and the 1961 Convention
"Section 1. The following provisions of this Act shall, with respect to the matters dealt with therein, have effect in substitution for any previous enactment or rule of law.
"Section 2 (1). Subject to section 3 of this Act [which is irrelevant for the purposes of this case], the Articles set out in Schedule 1 to this Act (being Articles of the Vienna Convention on Diplomatic Relations signed in 1961) shall have the force of law in the United Kingdom and shall for that purpose be construed in accordance with the following provisions of this section.
"national of the receiving State" shall be construed as meaning citizen of the United Kingdom and Colonies;
"Ministry for Foreign Affairs or such other ministry as may be agreed" shall be construed as meaning the department of the Secretary of State concerned; "
"Section 4. If in any proceedings any question arises whether or not any person is entitled to any privilege or immunity under this Act a certificate issued by or under the Secretary of State stating any fact relating to that question shall be conclusive evidence of that fact.
"Schedule 1
"Article 1. For the purpose of the present Convention, the following expressions shall have the meanings hereunder assigned to them:
(a) the "head of the mission" is the person charged by the sending State with the duty of acting in that capacity;
(b) the "members of the mission" are the head of the mission and the members of the staff of the mission;
(c) the "members of the staff of the mission" are the members of the diplomatic staff, of the administrative and technical staff and of the service staff of the mission;
(d) the "members of the diplomatic staff" are the members of the staff of the mission having diplomatic rank;
(e)
(f) the "members of the administrative and technical staff" are the members of the staff of the mission employed in the administrative and technical service of the mission;
(g) the "members of the service staff" are the members of the staff of the mission in the domestic service of the mission;
(h) a "private servant" is a person who is in the domestic service of a member of the mission and who is not an employee of the sending State;
"Article 37(3) (which has already been cited, but which is repeated here for completeness)
Members of the service staff of the mission who are not nationals of or permanently resident in the receiving State shall enjoy immunity in respect of acts performed in the course of their duties, exemption from dues and taxes on the emoluments they receive by reason of their employment and the exemption contained in Article 33.
"Article 39
(1) Every person entitled to privileges and immunities shall enjoy them from the moment he enters the territory of the receiving State on proceeding to take up his post or, if already in its territory, from the moment when his appointment is notified to the Ministry of Foreign Affairs or such other ministry as may be agreed.
"Article 10 (which is not one of the Articles of the 1961 Convention having the force of law in the United Kingdom by virtue of the DPA)
(1) The Ministry of Foreign Affairs of the receiving State, or such other ministry as may be agreed, shall be notified of:
(a) the appointment of members of the mission, their arrival and their final departure or the termination of their functions with the mission;
(b) the arrival and final departure of a person belonging to the family of a member of the mission and, where appropriate, the fact that a person becomes or ceases to be a member of the family of a member of the mission;
(c) the arrival and final departure of private servants in the employ of persons referred to in sub-paragraph (a) of this paragraph and, where appropriate, that fact that they are leaving the employ of such persons;
(d) the engagement and discharge of persons resident in the receiving State as members of the mission or private servants entitled to privileges and immunities.
(2) Where possible, prior notification of arrival and final departure shall also be given.
The Appellant's case
The Commissioners' Case
"The State Parties to the present Convention
Realizing that the purpose of such privileges and immunities is not to benefit individuals but to ensure the efficient performance of the functions of diplomatic missions as representing States,
Affirming that the rules of customary international law should continue to govern questions not expressly regulated by the provisions of the present Convention
Have agreed as follows:"
(1) A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
(2) The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument relating to the treaty.
(3) There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties.
(4) A special meaning shall be given to a term if it is established that the parties so intended.
"when in determining whether or not a particular member of your staff should be regarded as a permanent resident of the United Kingdom the test should normally be whether or not he would be in the United Kingdom but for the requirements of the sending State"
and, at paragraph 3(iii) that:
"local recruitment of the individual: a person who is locally engaged is presumed to be permanently resident in the United Kingdom unless the Head of Mission concerned shows that he is going to return to his own country or to proceed to a third country immediately on the termination of his appointment in the United Kingdom;"
Decision
JOHN WALTERS QC
SPECIAL COMMISSIONER
RELEASED : 23/06/2004
SC 3126/03