Commissioners of Customs and Excise v Leicester University Student Union
| Jurisdiction | England & Wales |
| Judge | Peter Gibson L.J.,Lady Justice Arden,Mr Justice Morland |
| Judgment Date | 21 December 2001 |
| Neutral Citation | [2001] EWCA Civ 1972 |
| Docket Number | Case No: A3/2001/0810/CHRVF |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 2001 |
[2001] EWCA Civ 1972
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
Rimer J.
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Peter Gibson
Lady Justice Arden and
Mr Justice Morland
Case No: A3/2001/0810/CHRVF
Mr. Owain Thomas (instructed by The Solicitors for Customs & Excise of Salford for the Respondents) Mr. Rupert Baldry (instructed by Messrs Bray and Bray Solicitors of Market Harborough for the Appellant)
The dispute underlying this appeal is whether supplies of soft drinks made by the University of Leicester Students' Union ("the Union") to students are exempt from Value Added Tax ("VAT"). The Manchester Value Added Tax and Duties Tribunal (Mr. D. S. Porter) on 11 August 2000 by an interim decision on a preliminary issue held that the Union was entitled to an exemption on any such supplies which were closely related to the supply of education. It did so on the ground that the Union was an integral part of the University of Leicester ("the University"). The Tribunal has not yet determined whether the supplies in question are closely related to the supply of education. The Commissioners of Customs and Excise ("the Commissioners") appealed against the Tribunal's decision and the appeal was allowed by Rimer J. (see [2001] STC 550). The Union now appeals with the permission of Robert Walker L.J.
The University was established by Royal Charter dated 1 May 1958. By clause 1 the University was constituted and founded.
Clause 2 provided for the incorporation of the University in the following terms:
"…. [Lord Adrian (the first Chancellor of the University)], the persons named in the First Schedule hereto as members of the Court, the Council and the Senate, and the Faculties of the University, the Graduates and the Undergraduates of the University, the Chancellor, the Pro-Chancellors, the Vice-Chancellor, the Treasurer, the Pro-Vice-Chancellor and the Deans of the Faculties of the University for the time being and all others who shall pursuant to this our Charter and the Statutes for the time being be Members of the University are hereby constituted and from henceforth for ever shall be one body politic and corporate with perpetual succession and a Common Seal by the name and style of "The University of Leicester" …. with full power and capacity by and in such name to sue and be sued and to take and hold land …. and to do all other lawful acts whatsoever …."
By clauses 4 – 9 the office of Chancellor of the University and the various other University offices incorporated into the University by clause 2 were established. Clause 10 stated that the supreme governing body of the University was the Court. Clause 11 provided for a Council of the University to be the governing body and executive of the University. By clause 12 a Senate of the University was established to regulate and superintend the education and discipline of students of the University. Clause 13 was in this form:
"There shall be a Convocation of the University and there shall also be a Students' Union. The Convocation and the Students' Union shall respectively have such and so many representatives on the Court and on such conditions as may be provided by the Statutes of the University."
Clause 14 stated that the University should be both a teaching and an examining body and should have the power, amongst other things,
"(m) To enter into any agreement for the incorporation in the University of any other institution."
Clause 15 provided for Statutes of the University to prescribe and regulate the constitution, powers and business or duties of the Court, the Council, the Senate and the Boards of Faculties and the constitution of, and other matters relating to, the Convocation. No mention is made of the Union. Clause 16 allowed the Statutes of the University to direct that any other matter directed by the Charter to be prescribed by Statutes should be prescribed by Ordinances of the University. Clause 17 provided for Regulations to be made by the Court and the Council. Clause 22 provided for amendments to be made to the Charter by the Court if allowed by the Privy Council.
Statutes of the University laid down in section 13 of whom the Court should consist. This is a vast body widely drawn (for example they include no less than a minimum of 27 representatives of public authorities). Included in the numerous "Representatives of the University" are three representatives of the Union elected by the Union. Section 25 provided:
"There shall be a Students' Union of the University and Ordinances shall prescribe the constitution functions privileges and other matters relating to such Union."
Section 36 stated that the Statutes were to be interpreted so as not to conflict with the Charter.
Ordinance XV related to the Union. The relevant provisions of that Ordinance are incorporated in the detailed written constitution of the Union. Paragraph 3 (1) provides that there should be a Students' Union of the University "for the promotion of the general interests of students and to afford a recognised channel of communication between students and University authorities". Paragraph 3 (2) stated who should be members of the Union, viz. all registered students of the University, such members of staff as might elect to become Associate Members of the Union and such persons as the Union in accordance with its Regulations might admit or elect as Associate, Life, Honorary or External Members. But to these provisions there was a proviso giving any registered student the right to opt not to be a member of the Union. Paragraph 3 (12) – (15) provided for accounts, annual and quarterly reports and budgets of the Union to be prepared and presented to the Council for approval. Paragraph 3 (16) prohibited the Union from incurring expenditure or taking any other action which was inconsistent with the law relating to charities.
Paragraph 4 (1) provides that under the University regulations relating to the Union, the consent "of the University" is required if the Union is to do certain specific things. As the judge pointed out, that might be said to suggest that the University is an entity separate from the Union. Paragraph 4 (7) similarly refers to "agreement between the University and the Union" enabling students who opt out of Union membership to use Union facilities. But in paragraph 4 (4) reference is made to the Union as being "part of a charitable organisation." It is convenient to mention at this point that the Union is an educational charity. However, as such it is an entity distinct from the University, which has its own charitable purposes.
In that part of the Union's constitution which contains its regulations are set out the aims of the Union. They are to provide official representation of students in all matters affecting their interests, to provide social, cultural, intellectual and athletic activities for its members, and to assist students in dealing with their problems and to reduce the occurrence of such problems.
There are detailed provisions relating to membership. Whilst only registered students of the University can be Full Members of the Union with the right to vote, other wide classes of persons can be Associate Members (for example, past Full Members and members of staff of the Union), Honorary Members (such persons as are elected by the Union Council) and External Members (for example, spouses and children of Full Members and all members of the National Union of Students), and such members of the Union who are not Full Members have some of the privileges of the Full Members such as the right to take advantage of all of the facilities of the Union.
There are also provisions in the Union's constitution relating to the government and administration of the Union. They include in paragraph 10.1 that the finances of the Union should be the final responsibility of the Union Council. There are provisions for the investment of surplus funds of the Union and for the appointment of the Union's bankers and auditors. Ten Committees of the Union are provided for in its rules with the possibility of further committees being formed. They include an Education Committee, the functions of which are to advise officers and members of the Union about policy on educational issues and to assist in the formation of educational policy for the Union, to coordinate representation on the University Senate, to provide a structure by which course representatives may transmit their views on educational issues to the Union and to assist with the promotion of educational issues and any education campaigns run by the Union.
A formal agreement has been entered into between the University and the Union concerning the use by the Union of a building known as the Perry Gee Building on the University campus. Under the agreement the respective responsibilities of the University and the Union in relation to the building are specified.
A brochure on the Union describes its building and the wide range of services which the Union provides, including shops, restaurants, bars, meeting rooms, clubs and a travel agency. The Union issues its own newspaper and has its own radio station, local TV show and website.
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