Heidelberg Graphic Equipment Ltd and Another v HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Mr JUSTICE HENDERSON |
| Judgment Date | 08 April 2009 |
| Neutral Citation | [2009] EWHC 870 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC01CO0117 |
| Date | 08 April 2009 |
[2009] EWHC 870 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Before: The Honourable Mr Justice Henderson
Case No: HC01CO0117
MR DAVID CAVENDER (instructed by Messrs Dorsey & Whitney) appeared on behalf of the CLAIMANTS
MR RUPERT BALDRY (instructed by the Solicitor for HMRC) appeared on behalf of the DEFENDANTS
This is an application by the two Heidelberg claimants (“Heidelberg”) for an interim payment pursuant to CPR Rule 25.7(1)(c). The application is brought by an application notice which was issued on 9th March 2009.
Heidelberg was one of the 19 test claimants in the Europcar group of cases which I heard within the ACT GLO in April of last year and in which I handed down my reserved judgment on 19th June 2008. The main purpose of the Europcar proceedings was to determine four out of five of the Class 1 Post-judgment Issues which related to limitation and pleading. The remaining Post-judgment Issue, Post-judgment Issue E, concerned the validity of section 320 of the Finance Act 2004 which introduced a new and strict limitation period. Rimer J by his order of 20th July 2007 had directed that determination of that issue was to await developments in the Aegis test case, which was a test case for what became Limitation Issue Q in the FII GLO. That, of course, was one of the questions which I determined in the FII hearing in which I handed down judgment in November, following a three week hearing last July.
Returning to Europcar, I held that Heidelberg alone of the test claimants had not succeeded in making a valid claim in mistake before 8th September 2003, that being the date from which section 320 applied. I also held that amendments to Heidelberg's claim form made on 27th February 2007 raised a new claim in mistake, which did not arise out of the same or substantially the same facts as the claim in its original form. It followed that Heidelberg's claim at trial succeeded only in relation to amounts of ACT which it had paid within six years before the date of issue of its original claim form in January 2001. Heidelberg's claim in relation to amounts of ACT paid before that time was unsuccessful.
Heidelberg appealed against my decision, with permission to appeal given by myself, but the present position is that the appeal has been stayed until after the Court of Appeal has given judgment on the FII appeal, which it is due to hear in October of this year. The direction to that effect was made by Lloyd LJ on 30th March 2009. He said it seemed to him the most sensible course would be to stay Heidelberg's appeal until after judgment on the FII appeal, rather than to list it to come on immediately after that appeal as Heidelberg had requested.
The order which was made following my judgment in Europcar recited an agreement between the parties that determination of the Class 1 Post-judgment Issue E should await resolution of Limitation Issue Q in the FII GLO, and paragraph 12 of the order provided that the claim of Heidelberg should otherwise be stayed “pending further developments in relation to the determination of Limitation Issue Q in the Franked Investment Income GLO”.
Limitation Issue Q, as I have said, was considered by myself in the FII test case, and in the judgment (which I delivered on 27th November 2008) I held that section 320 breached Community law by purporting to curtail the applicable limitation period without providing transitional arrangements. It followed that the Revenue were not entitled to rely on section 320 as a defence to the test claims. I did, however, give the Revenue permission to appeal on all points which I had decided adversely to them, on the footing that they raised important and difficult questions of law; and on 30th January 2009 the Revenue filed their appellant's notice, including an appeal against my decision on section 320.
The notice of appeal does not provide details of the arguments in support of the appeal which will be deployed, but I am certainly prepared to accept, as Mr Baldry submitted to me this morning, that the issue is an important and difficult one. It turns not so much on the absence of transitional arrangements, which is fairly plainly unlawful if Community law is relevantly engaged, but rather on a much more difficult underlying issue as to whether a mistake- based claim in restitution under English law is necessary to satisfy the principle of effectiveness in relation to San Giorgio claims under community law. It is there that the real difficulties are involved, which I fully accept are eminently arguable both ways, and will no doubt occupy the Court of Appeal and probably in due course the Supreme Court (as it will by then be) as well.
Against that background the current application was made, as I say, by an application notice issued on 9th March. It is supported by a witness statement of Mr Gerard Heanue dated 6th March. The Revenue have given their consent to the application being heard by myself as envisaged by CPR 25.9. The reason why they gave their consent, although nothing turns on this, is that issues of quantum are no longer in dispute between the parties. Quantum has been agreed, subject only to the issue of liability.
The only objection raised by the Revenue to this application is set out in their Notice of Objection dated 3rd April 2009 where they say that Heidelberg relies on my decision in FII in relation to section 320, but the decision is subject to appeal, and until the appeal is decided “it is impossible to say that [ Heidelberg] would obtain judgment for a substantial amount of money in the present case”.
The relevant rule is CPR 25.7 (1), which provides:
“The court may only make an order for an interim payment where any of the following conditions are satisfied –
…
(c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment…”
It is important to remember that the court has no inherent jurisdiction to make interim payments. That is reflected in the wording of the rule, which says that the court may make an order only if the specified conditions are satisfied; and the circumstances for which provision is made are by way of exception to the normal rule, which is that a final judgment is required before any sum is to become payable by a defendant to a successful claimant.
It is common ground that the burden of proof on the issue lies upon the claimant, and the court needs to be satisfied on the balance of probabilities. The court does not need to be satisfied to the criminal standard of proof, beyond all reasonable doubt. There is some learning in the Court of Appeal about the degree of certainty or satisfaction rather that the court needs to feel. The reported cases, as Mr Cavender rightly says, concentrate on the question whether a court which has given unconditional leave to defend on an application for summary judgment can simultaneously be satisfied that the claimant will succeed at trial for the purposes of the interim payment rule.
The leading decision in the Court of Appeal is the case of British and Commonwealth Holdings plc v Quadrex Holdings Inc [1989] 1QB 842 (“ Quadrex”) where the...
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