Gaines-Cooper v HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE LEWISON |
| Judgment Date | 13 November 2007 |
| Neutral Citation | [2007] EWHC 2617 (Ch) |
| Docket Number | Case No: CH/2007/APP/0894 |
| Court | Chancery Division |
| Date | 13 November 2007 |
[2007] EWHC 2617 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Lewison
Case No: CH/2007/APP/0894
Mr. Michael Flesch QC and Miss Nicola Shaw (instructed by Squire Saunders & Dempsey) for the Appellant.
Miss Ingrid Simler QC and Mr. Akash Nawbatt (instructed by Solicitors for HMRC) for the Respondent.
Hearing dates: 16, 17, 18 October 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr. Justice Lewison:
| Introduction | 2 |
| The contest before the Special Commissioners | 2 |
| The decision | 3 |
| The scope of an appeal | 8 |
| Domicile: the legal test | 13 |
| Residence and chief residence | 13 |
| Wife and children | 17 |
| Mr Gaines-Cooper's marriages | 17 |
| Dilona Lantang | 17 |
| Jane Laye-Sion | 18 |
| The Seychellois witnesses | 19 |
| Other factual criticisms | 20 |
| The plastics factory | 20 |
| The coup d'état | 21 |
| Bois Noir | 21 |
| Connections with England | 21 |
| Result | 23 |
Introduction
Given that many people move about the world from one country to another, it is essential to have a means of establishing under which system of law and within the jurisdiction of which country's courts questions relating to their civil status (such as marriage, divorce and legitimacy) and some aspects of their property (such as the devolution of moveable property on their intestacy) fall to be determined. It is to accomplish that purpose that the concept of domicile has been developed. It is a neutral rule of law for determining that system of personal law with which an individual has the appropriate connection, so that it will govern his personal status and questions relating to him and his affairs. Its essential feature is that it attempts to connect a person so far as it is possible with the country in which he has his permanent home or in which he lives indefinitely. But in addition to the principal objective of the law of domicile, it also has knock-on effects, such as a person's liability to pay tax. That is what this appeal is about.
The Special Commissioners (Dr Nuala Brice and Mr Charles Hellier) decided that Mr Gaines-Cooper was domiciled in England and Wales during the tax years from 1992/93 to 2003/04. Mr Gaines-Cooper, being dissatisfied with that decision in point of law, appeals against it. His appeal is restricted to questions of law only.
The contest before the Special Commissioners
It is common ground that Mr Gaines-Cooper's domicile of origin was England and Wales. The contest before the Special Commissioners was between the continuation of Mr Gaines-Cooper's domicile of origin (as alleged by HMRC) and the acquisition by him of a domicile of choice in the Seychelles in 1976 (as alleged by Mr Gaines-Cooper). HMRC did not allege that if Mr Gaines-Cooper had acquired a domicile of choice in the Seychelles in 1976 he had subsequently abandoned it. Nor did Mr Gaines-Cooper allege that if he had not acquired a domicile of choice in the Seychelles in 1976 he had subsequently done so.
The Special Commissioners correctly described the legal issue before them (¶ 4) as:
“whether the Appellant was domiciled in England during the tax years from 1992/93 to 2003/04”
They correctly recorded Mr Gaines-Cooper's factual case on that issue (¶ 111) as follows:
“It was the Appellant's case that he abandoned his domicile of origin in England and acquired a domicile of choice in the Seychelles in 1976 and that that domicile of choice had subsisted at all times since then.”
In addition to the issue of domicile during the relevant tax years, the Special Commissioners were also required to decide whether Mr Gaines-Cooper was “resident” or “ordinarily resident” in the United Kingdom during those years. They dealt with these issues in a separate section of their decision. But Mr Flesch QC, who appears for Mr Gaines-Cooper, says that they made errors of law in formulating the legal test that they purported to apply in deciding the question of domicile. He says that in two respects the Special Commissioners' self-direction was wrong. He also says that on the facts found and the unchallenged evidence, the only true and reasonable conclusion is that Mr Gaines-Cooper acquired a domicile of choice in the Seychelles in 1976 or thereabouts. Since the Special Commissioners reached a contrary conclusion, it must be inferred that they made an error of law. There are, therefore two potential points of law, one “pure” and one “applied”.
The decision
I will have to deal with some of the Special Commissioners' findings of fact in due course; but simply to put their conclusions in context I give the bare bones of the story now. Mr Gaines-Cooper had a domicile of origin in England and Wales. In the 1970s he began to visit the Seychelles and in 1975 he bought a house there known as Bois Noir. Also in 1975, in order to obtain a residence permit he constructed and thereafter operated a plastics factory in the Seychelles. He also retained, through the medium of an offshore company, a house and farmland in England. He was granted a residency permit for the Seychelles in 1976. In 1979 Mr Gaines-Cooper married Ms Dilona Lantang in Amsterdam. He bought a house in California which was to be the matrimonial home. However, the marriage deteriorated after a very short time, and a divorce followed. In 1993 Mr Gaines-Cooper remarried. He had met his second wife Jane in the Seychelles in 1975. She is a Seychellois but had come to study and then work in England. The marriage took place in England in 1993. In the following year Mrs Gaines-Cooper applied for naturalisation as a British subject. Their son James was born in England in 1998 and went to school in England until 2005. Substantial works were carried out to Mr Gaines-Cooper's English house in the early 1990s and to Bois Noir in 1996. The Special Commissioners also made findings about the number of days that Mr Gaines-Cooper spent in the Seychelles and the UK respectively.
Having set out the evidence and their findings at considerable length, the Special Commissioners turned to the law. No criticism is made of the summary in paragraphs 114 to 118 of the decision. In paragraph 119 they said:
“It is clear that, in considering the requirements of residence and of intention, it is necessary to look at all the evidence.”
In paragraph 120 they said:
“The totality of the evidence can include conduct after the date of the alleged acquisition of a domicile of choice.”
Having stated the principle, they then considered the twin requirements of residence and intention. So far as the question of residence is concerned, they decided that the relevant inquiry, in a case where a person has a residence in more than one jurisdiction, is which of them is his chief or principal residence. They summarised what they considered to be the correct legal principles (which amounted to their self-direction) as follows (¶ 132):
“From the authorities we conclude that a domicile of choice is acquired by the combination of residence and the intention of permanent or indefinite residence and in reaching a decision it is necessary to look at the totality of the evidence, including events which occurred after the claimed acquisition of a domicile of choice. Residence for the purposes of the law of domicile means physical presence as an inhabitant but where a person resides in two countries it is necessary to look at all the facts in the light of the principle that a person who retains a residence in his domicile of origin can acquire a domicile of choice in a new country only if the residence established in that new country is his chief residence. There must also be the intention of permanent and indefinite residence: a determination to make the alleged domicile of choice his home with the intention of establishing himself and his family there and ending his days in that country.”
I have italicised the two parts of that self-direction that Mr Flesch criticises. So far as the first is concerned, Mr Flesch says that while it is possible to look at evidence subsequent to the relevant date in considering the question whether the propositus had the necessary intention for the acquisition of a domicile of choice, it is impermissible to look at such evidence for the purpose of determining whether he had the necessary residence. So far as the second passage is concerned, Mr Flesch says that if the propositus has no family (in the sense of a nuclear family or a wife and children) at the time that he says he has acquired a domicile of choice, then his intentions as regards his family are irrelevant to the question whether he has the intention necessary to support the acquisition of a domicile of choice.
The Special Commissioners then applied their self direction to the facts they had found. Their conclusions are detailed, and it is necessary to set them out fully. They first considered whether Mr Gaines-Cooper's “chief residence” was in the Seychelles. They concluded:
“138 In favour of the Appellant is the fact that the Appellant has had a residence in the Seychelles for more than 30 years. The Appellant purchased Bois Noir as a furnished house in 1976 and after the renovations which were completed in 1998 that residence now has a certain quality. The Appellant wishes his ashes to be scattered there. He met his future wife in the Seychelles. His papers are, since 2004, kept there. In his 1977 will he declared that he was domiciled in the Seychelles. He has social, religious and charitable associations with the...
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