Petition Of Dr Sohail Raza Chaudhry V. The Advocate General For Scotland For And On Behalf Of The Commissioners For Her Majestys Revenue And Customs
| Jurisdiction | Scotland |
| Judge | Lord Tyre |
| Neutral Citation | [2013] CSOH 36 |
| Date | 06 March 2013 |
| Docket Number | P239/11 |
| Court | Court of Session |
| Published date | 06 March 2013 |
| OUTER HOUSE, COURT OF SESSION [2013] CSOH 36 | |
| P239/11 | OPINION OF LORD TYRE in Petition of DR SOHAIL RAZA CHAUDHRY Petitioner; against THE ADVOCATE GENERAL FOR SCOTLAND, FOR AND ON BEHALF OF THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS Respondent: ________________ |
Petitioner: Party
Respondent: Artis; Office of the Advocate General
6 March 2013
Introduction
[1] On 25 October 2010 a summary warrant was granted by the sheriff at Glasgow Sheriff Court in favour of an officer of HM Revenue and Customs ("HMRC") for recovery of a sum of £11,657.55 allegedly due by the petitioner in respect of income tax, national insurance contributions, interest, penalties and surcharge. On 5 November 2010, on the instructions of HMRC, sheriff officers served on the petitioner a charge for payment of the sum in respect of which the summary warrant had been granted. Payment not having been received, a petition was presented by HMRC to Glasgow Sheriff Court on 2 December 2010 for sequestration of the petitioner's estate.
[2] In this petition (which is not an application for judicial review), the petitioner seeks an order suspending the summary warrant, the charge for payment and the petition for sequestration. He also seeks declarator that HMRC do not have the right by virtue of the summary warrant to institute proceedings for sequestration of his estate. The averment seeking declarator was substituted by amendment, at an earlier stage of the procedure, for one seeking interdict and interim interdict, following an unsuccessful application by the petitioner to this court for interim suspension and interim interdict. The sequestration proceedings in the sheriff court are sisted pending the outcome of the present petition. The matter came before me on the procedure roll for debate of the respondent's pleas to the competency of the petition and the relevancy of the petitioner's averments.
Factual background
[3] The petitioner's pleadings are succinct and there is little by way of factual background to add to what has already been said. Following service of the charge, the petitioner wrote to HMRC "denying the debt", which appears to consist of liabilities said to have accrued during the tax years 2001-02 to 2005-06. At the very close of the debate the petitioner, who presented his own submissions with the assistance of a friend, made brief reference to having made an appeal which HMRC "did not take further". There are, however, no pleadings or documentary evidence regarding any such appeal having been made and I am unable to attach any weight to this assertion. The petitioner does not deny that the summary warrant and the charge are ex facie valid and regular. His contention is that having chosen to proceed by way of summary warrant rather than court action, it was not open to HMRC subsequently to apply for his sequestration instead of utilising one of the forms of diligence specified in the legislation applicable to recovery of tax by summary warrant procedure.
Competency
[4] It is appropriate to begin with the competency issues argued by the respondent. I shall summarise the arguments for the parties before addressing them in more detail.
Arguments for the Respondent
[5] Counsel for the respondent submitted that it was not competent to seek the remedy of suspension against the Crown in civil proceedings. An order for suspension was not in substance different from an order for interdict, which was prohibited by proviso (a) in section 21(1) of the Crown Proceedings Act 1947. Reference was made to Ralston v Scottish Ministers 2004 SLT 1263 (Lady Smith). An application for sequestration was of the nature of civil proceedings or, to use the phraseology of Lord Rodger of Earlsferry in Davidson v Scottish Ministers 2006 SC (HL) 41, private law proceedings. When charging for a debt or petitioning for sequestration, HMRC were utilising civil remedies available to all creditors, including ordinary citizens. The present case accordingly fell squarely within the prohibition. It was analogous to McDonald v Secretary of State for Scotland 1994 SC 234 and distinguishable from Davidson, where it was held that proceedings invoking the supervisory jurisdiction were not civil proceedings for the purposes of section 21.
[6] Counsel further submitted that it was not competent to seek the remedy of declarator in petition procedure unless expressly authorised by statute or rules of court as in, for example, an application for judicial review. This traditional approach differentiating ordinary procedure from petition procedure remained applicable: see Maxwell, Court of Session Practice (1982), p.433, and the cases there cited. In Renyana-Stahl Anstalt v MacGregor 2001 SLT 1247, Lord MacFadyen expressed the view at para 52 that the passage in Maxwell remained a correct statement of practice. It was accepted that in certain respects there had been an erosion in modern practice of the distinction between the two forms of procedure, and that the desirability of maintaining such technical rules had been questioned recently by Lord Malcolm in Fraser &Anor, Petitioners [2012] CSOH 184. Nevertheless it remained the case that, with the exception of applications for judicial review, petition procedure was not the place for declaratory conclusions.
[7] Counsel made a third submission, which he did not develop, that it was incompetent and in any event premature to seek to suspend in this court a sequestration process in the sheriff court, the proper course being to seek to persuade the sheriff that there was cause why the sequestration could not competently be awarded.
Arguments for the petitioner
[8] The petitioner submitted that I should regard the case of Ralston v Scottish Ministers as distinguishable on its facts from the present case. In Ralston, the consequence of granting suspension would have been to compel the Crown to act in a particular way, namely to transfer a prisoner out of segregation. In contrast, suspension in the present case would not require the Crown to do anything, although it would remain open to them, if they chose, to proceed against the petitioner in a more appropriate way by beginning with an action for payment. The petitioner further submitted that I should not, in any event, follow the decision in Ralston because the distinction drawn by Lady Smith (at para 21) between technical effect and actual effect was not consistent with the later decision of the House of Lords in Davidson.
[9] So far as the prayer for declarator was concerned, the petitioner referred to section 21(1) of the 1947 Act which expressly conferred power on the court to make orders declaratory of a party's rights in proceedings against the Crown. It would be odd and unfortunate if the petitioner's substitution of an application for declarator for his previous application for interdict resulted in a need to raise a fresh action using ordinary procedure.
Decision: competency
[10] I deal firstly with the competency of granting an order for suspension of the summary warrant, charge for payment and petition for sequestration. Section 21(1) of the Crown Proceedings Act 1947, so far as material, provides as follows:
"In any civil proceedings by or against the Crown, the court shall, subject to the provisions of this Act, have power to make all such orders as it has power to make in proceedings between subjects, and otherwise to give such appropriate relief as the case may require:
Provided that:
(a) where in any proceedings against the Crown any such relief is sought as might in proceedings between subjects be granted by way of injunction or make an order for specific performance, the court shall not grant an injunction or make an order for specific performance, but may in lieu thereof make an order declaratory of the rights of the parties ..."
For the avoidance of any doubt, section 43(a) provides that in the application of the Act to Scotland, the expression "injunction" means interdict.
[11] In McDonald v Secretary of State for Scotland 1994 SC 234, a serving prisoner claimed to have been subject to illegal searches on at least 3,000 occasions. He sought interdict and interim interdict against the defender or his representatives from searching him without lawful authority, and reparation for each allegedly unlawful search that had occurred. The sheriff's refusal of the pursuer's crave for interim interdict as incompetent was upheld by the Court. Lord Justice-Clerk Ross (with whom the other members of the Court concurred) observed at page 242G:
"So far as the present case is concerned, I am quite satisfied that the granting of interdict or interim interdict is prohibited by virtue of the provisions of section 21(1) of the 1947 Act. The action which the pursuer has raised plainly constitutes civil proceedings. Moreover these clearly are civil proceedings against the Crown since directing the proceedings against the Secretary of State for Scotland is one method by which civil proceedings can be instituted against the Crown. The matter appears to me to be clearly covered by the provisions of section 21(1)(a), and it follows that the sheriff was well founded in refusing the crave for interim interdict as incompetent."
Lord Justice-Clerk Ross went on (page 243H) to express the obiter view that "there would be formidable difficulties in the way of any submission to the effect that application to the supervisory jurisdiction of the Court of Session did not constitute civil proceedings within the meaning of section 21". That view has now been disapproved by the House of Lords in Davidson v Scottish Ministers. The opinions of Lord Nicholls of Birkenhead and Lord Rodger of Earlsferry include a detailed account of the effect of section 21 on the remedies available against the Crown in England and Wales, and reach the conclusion that it could not have been the intention of Parliament in 1947 to restrict the scope of remedies by way of judicial...
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