Crompton (Alfred) Amusement Machines Ltd v Commissioners of Customs and Excise (No. 2)

JurisdictionUK Non-devolved
Judgment Date1971
CourtHouse of Lords
Year1971
Date1971
[HOUSE OF LORDS]ALFRED CROMPTON AMUSEMENT MACHINES LTD APPELLANTS AND CUSTOMS AND EXCISE COMMISSIONERS (No. 2) RESPONDENTS1973 Jan. 15, 16, 17, 18, 22, 23, 24, 25, 29; July 4Lord Reid, Lord Morris of Borth-y-Gest, Viscount Dilhorne, Lord Cross of Chelsea and Lord Kilbrandon

Practice - Discovery - Privilege - Professional privilege - Purchase tax assessment dispute referred to arbitration - Communications between customs and excise commissioners and own legal department - Communications in anticipation of arbitration proceedings - Whether privileged. - Crown - Privilege - Evidence - Objection to produce documents - Claim by head of department - Documents containing information from third parties supplied in confidence - Information in connection with determination of purchase tax and anticipated arbitration - Whether documents privileged on ground of confidence.

By a letter dated July 31, 1967, the complainant company, which had for some years paid purchase tax on the wholesale values of machines made and sold by them on the basis of a formula negotiated with the Customs and Excise Commissioners, claimed that the assessment was too high and asked that the letter be treated as a request for arbitration under section 36 of the Purchase Tax Act 1963. The commissioners thereupon began to investigate the company's books and affairs and obtained from customers and other sources information relevant not only to the ascertainment of the wholesale value but also (as the Court of Appeal found) to the possible arbitration. On December 8, 1969, they gave their formal “opinion” under section 3 (1) of the Act on the way the tax should be computed. No agreement was reached and pleadings went ahead for arbitration. When the commissioners served their list of documents they claimed (1) legal professional privilege for bundles of documents consisting of communications between themselves and their legal department (a) in the ordinary course of work and (b) for the purpose of the anticipated arbitration; and also for internal memoranda, minutes and the like, stated to have been prepared, sent or received in confidence for the purpose of the arbitration; and (2) Crown privilege for a class of routine documents the disclosure of which the head of the department swore would be injurious to the public interest since they would reveal the commissioners' methods and contained confidential information from third parties supplied both voluntarily and pursuant to the exercise of the commissioners' powers under section 24 (6) of the Act.

The company applied unsuccessfully to the master for an order for discovery of those documents; but Eveleigh J. on appeal ordered the commissioners to make their claims with greater particularity by a fixed date, in default of which they should produce the documents. Further affidavits were sworn, but the company, claiming that they were still insufficient to comply with Eveleigh J.'s order, took out another summons. It came before Forbes J. who made an order which in effect required production of most of the documents in dispute, but gave the commissioners leave to appeal. The Court of Appeal allowed the appeal, holding, (i) that legal professional privilege attached to all the communications between the commissioners and their internal legal advisers from the earliest date at which “litigation” was anticipated, namely, from July 31, 1967, and that professional privilege also attached to the internal memoranda used in the process of valuation under section 3 (1) or obtained in the exercise of the commissioners' powers under section 24 since those documents came into existence after “litigation” was anticipated; and (ii) that the claim for Crown privilege in respect of the class of routine documents could not be sustained, but that the commissioners were entitled to the inherent privilege available to all litigants to withhold from production information from third parties given in confidence for a restricted purpose, and that, accordingly, on that ground those documents were privileged from production.

The company appealed: —

Held dismissing the appeal, (1) that in the circumstances legal professional privilege attached to the communications between the commissioners and their internal legal advisers from receipt of the letter of July 31, 1967, since the commissioners were entitled to take the view (which subsequent correspondence did nothing to disabuse) that whatever value was fixed would almost certainly be challenged (post, pp. 271G–H, 273G–H, 282D–F, 286A).

(2) (Viscount Dilhorne dissenting) that professional privilege did not attach to the memoranda for the first and immediate purpose for which those documents were obtained or came into existence was to assist the commissioners to ascertain the wholesale value of the goods in question in the manner prescribed by the Act (post, pp. 271G–H, 284A–F, 286A).

Jones v. Great Central Railway Co.[1910] A.C.4, H.L.(E.) applied.

Ogden v. London Electric Railway Co.(1933) 49T.L.R.542, C.A. and Seabrook v. British Transport Commission[1959] 1W.L.R.509 distinguished.

(3) That the class of documents of a routine kind were not privileged from production on the ground that they contained information from third parties given in confidence since no such ground of privilege existed (post, pp. 271G–H, 280F–H, 282C, 286A).

Enthoven v. Cobb(1852) 5De G. & Sm.595; 2De G.M. & G.632 considered.

(4) But that the memoranda (which consisted principally of documents or information obtained from third parties) and documents of a routine kind were privileged from production on the ground that it was in the public interest that they should not be disclosed since knowledge that the commissioners could not keep such information secret might be harmful to the efficient working of the Act (post, pp. 271G–H, 274E, 285F–H, 286A).

Per curiam. Confidentiality” is not a separate head of privilege, but it may be a very material consideration to bear in mind when privilege is claimed on the ground of public interest (post, p. 285A).

Decision of the Court of Appeal [1972] 2Q.B.102; [1972] 2W.L.R.835; [1972] 2All E.R.353 affirmed on different grounds.

The following cases are referred to in their Lordships' opinions:

Admiralty v. Aberdeen Steam Trawling and Fishing Co. Ltd.1909S.C.335.

Birmingham and Midland Motor Omnibus Co. Ltd. v. London and North Western Railway Co.[1913] 3K.B.850, C.A.

Chantrey Martin & Co. v. Martin[1953] 2Q.B.286; [1953] 3W.L.R.459; [1953] 2All E.R.691, C.A.

Crompton (Alfred) Amusement Machines Ltd. v. Customs and Excise Commissioners[1971] 2All E.R.843.

Enthoven v. Cobb(1852) 5De G. & Sm.595; 2De G.M. & G.632.

Hopkinson v. Lord Burghley(1847) 2Ch.App.447.

Jones v. Great Central Railway Co.[1910] A.C.4, H.L.(E.).

Longthorn v. British Transport Commission[1959] 1W.L.R.530; [1959] 2All E.R.32, C.A.

Norwich Pharmacal Co. v. Customs and Excise Commissioners[1973] 3W.L.R.164; [1973] 2All E.R.443, H.L.(E.).

Ogden v. London Electric Railway Co.(1933) 49T.L.R.542, C.A.

Reynolds v. Godlee(1858) 4K. & J.88

Seabrook v. British Transport Commission[1959] 1W.L.R.509; [1959] 2All E.R.15.

Watson v. Cammell Laird & Co. (Shipbuilders and Engineers) Ltd.[1959] 1W.L.R.702; [1959] 2All E.R.757, C.A.

Whitehill v. Glasgow Corporation, 1915S.C.1015.

The following additional cases were cited in argument: Adam Steamship Co.

Ltd. v. London Assurance Corporation[1914] 3K.B.1256, C.A.

Anderson v. Bank of British Columbia(1876) 2Ch.D.644, C.A.

Ankin v. London and North Eastern Railway Co.[1930] 1K.B.527, C.A.

Attorney-General v. Clough[1963] 1Q.B.773; [1963] 2W.L.R.343; [1963] 1All E.R.420.

Attorney-General v. Mulholland; Attorney-General v. Foster[1963] 2D Q.B.477, [1963] 2W.L.R.658; [1963] 1All E.R.767, C.A.

Bristol Corporation v. Cox(1884) 26Ch.D.678.

Bulman and Dixon v. Young, Ehlers & Co. and Commercial S.S. Co.(1883) 31W.R.766.

Bustros v. White(1876) 1Q.B.423, C.A.

City of Baroda, The(1926) 134L.T.576.

Connecticut Importing Co. v. Continental D;stilling Corporation(1940) 1F.R.D.190.

Conway v. Rimmer[1968] A.C.910; [1968] 2W.L.R.998; [1968] 1All E.R.874, H.L.(E.).

Cowan v. Stanhill Estates Pty. Ltd.[1966] V.R.604

Dunbar v. Harvie(1820) 2Bligh351.

Ellis v. Watson(1818) 2Stark.453.

Fenner v. London and South Eastern Railway Co.(1872) L.R. 7 Q.B.767.

Gamini Bus Co. Ltd. v. Commissioner for Income Tax, Colombo[1952] A.C.571, P.C.

Graham Farm Land Co. v. Commonwealth(1950) 70A. 2d.219.

Greenlaw v. King(1838) 1Beav.137.

Henderson v. M'Gown, 1916S.C.821.

Hubbard v. Vosper[1972] 2Q.B.84; [1972] 2W.L.R.389; [1972] 1All E.R.1023, C.A.

Jenkins v. Glasgow Corporation, 1934S.L.T.53.

Joseph Hargreaves Ltd., In re[1900] 1Ch.347, C.A.

Krew v. Commissioner for Taxation(1970) 45A.L.J.R.249.

Lee v. Birrell(1813) 3Camp.337.

Macdonald v. Hedderwick & Sons(1901) 3F.674.

M'Corquodale v. Bell(1876) 1C.P.D.471.

Milne v. Wakelin (Milne's Judicial Factor), 1933S.L.T.274.

Mortimer v. M'Callan(1840) 6M. & W.58.

Parr v. London, Chatham and Dover Railway Co.(1871) 24L.T.558.

Reg. v. Beynon[1963] N.Z.L.R.635.

Reg. v. Lewes Justices, Ex Parte Secretary of State for Home Department[1973] A.C.388; [1972] 3W.L.R.279; [1972] 2All E.R.1057, H.L.(E.)

Reg. v. Snider[1954] S.C.R.479.

Reid v. Langlois(1849) 1Mac. & G.627.

Russell v. Jackson(1851) 9Hare387.

Smith v. East India Co.(1841) 1Ph.50.

Society of Medical Officers of Health v. Hope[1960] A.C.551; [1960] 2W.L.R.404; [1960] 1All E.R.317, H.L.(E.).

Southwark and Vauxhall Water Co. v. Quick(1878) 3Q.B.D.315, C.A.

Storey v. Lord Lennox(1836) 1My. & Cr.525.

Theodor Korner, The(1878) 3P.D.162.

Westminster Airways Ltd. v. Kuwait Oil Co. Ltd.[1951] 1K.B.134; [1950] 2All E.R.596, C.A.

Wheeler v. Le Marchant(1881) 17Ch.D.675, C.A.

Woolley v. North London...

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