R v Board of Inland Revenue, ex parte Goldberg

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
Judgment Date28 Apr 1988

Queen's Bench Division (Divisional Court).

R
and
Board of Inland Revenue, ex parte Goldberg

Mr. John Thomas Q.C. and Mr. David Joseph (instructed by Linklaters & Paines) for the applicant.

Mr. Alan Moses (instructed by the Solicitor of Inland Revenue) for the Crown.

Before: Watkins L.J. and Kennedy J.

The following cases were referred to in the judgment:

Anderson v. Bank of British Columbia ELR(1876) 2 Ch. D. 644

Buttes Gas & Oil Co. & Anor. v. Hammer & Anor. (No. 3)ELR[1981] 1 Q.B. 223

Chadwick v. Bowman ELR(1886) 16 Q.B.D. 561

Lyell v. Kennedy ELR(1884) 27 Ch.D. 1

Minet v. Morgan (1873) 8 Ch. App. 361

Palermo, The ELR(1883) 9 P.D. 6

Pearce v. Foster & Ors. ELR(1885) 15 Q.B.D. 114

R. v. King WLR[1983] 1 W.L.R. 411

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

Watson v. Cammell Laird & Co. (Shipbuilders and Engineers) Ltd.WLR[1959] 1 W.L.R. 702

Waugh v. British Railways Board ELR[1980] A.C. 521

Powers of the Revenue - Power to require disclosure of documents from third parties - Legal professional privilege - Notices served on applicant requiring him to produce copy documents held in his chambers relating to tax affairs of client - Copies made for purpose only of obtaining counsel's advice - Whether applicant obliged to comply with notices - Taxes Management Act 1970 section 20 subsec-or-para (3) section 20B subsec-or-para (8)Taxes Management Act 1970, sec. 20(3) and 20B(8).

This was an application by a barrister for judicial review of decisions of the Board of Inland Revenue relating to documents in his possession.

An American lawyer, R, practising in London, consulted the applicant, Mr. David Goldberg Q.C., concerning an investigation by the Revenue of the tax affairs of R's client, A, and of A's companies, involving about £17m. For the purpose of obtaining the applicant's advice, R provided the applicant with copies of certain documents.

The Revenue served notices on R and A which were not complied with because the documents were no longer in the possession of R who had parted with them at the request of A and the whereabouts of A and the documents were unknown.

The Board therefore served notices on the applicant under the Taxes Management Act 1970, Taxes Management Act 1970 section 20 subsec-or-para (3)sec. 20(3) requiring him to disclose the copies. When he did not comply with the notices, claiming professional privilege, the Board decided to commence penalty proceedings against him under Taxes Management Act 1970 section 98 subsec-or-para (1)sec. 98(1) of the Act.

The applicant sought judicial review of the Board's decision to reject his claim to legal professional privilege in respect of the documents and of the decision to commence penalty proceedings.

The grounds relied on by the applicant were that the documents requested were copies of documents brought into existence solely for the purpose of obtaining advice from him as counsel in contemplation of possible proceedings by the Board against or involving A and R. No consent for the documents to be produced to the Board had been given by R or his client.

Further or alternatively the copy documents were made by legal professional advisers and were the result of the professional knowledge, research and skill of those advisers.

The applicant maintained that the documents were clothed with professional privilege and consequently he was, by virtue ofTaxes Management Act 1970 section 20sec. 20B(8) of the Act, not obliged to disclose them without the consent of his client.

The Board contended that the documents should be disclosed. In the field of taxation, public policy required that where unprivileged original documents were not accessible the Revenue should be given access to copies, otherwise frauds could be committed and tax would be lost.

Held, granting a declaration that the documents were protected by professional privilege:

The copies came into existence for the sole purpose of obtaining legal advice from the applicant. They attracted privilege so that the applicant could not, without the consent of his client, comply with the requirements of the notices served on him.

JUDGMENT

Watkins L.J.: (giving the judgment of the court): David Gerard Goldberg is a Queen's Counsel practising at the Bar in taxation matters from chambers in Gray's Inn.

He seeks relief by judicial review of the decision of the Board of Inland Revenue made in June 1987 to reject his claim to legal professional privilege in respect of documents which are in his chambers and of the decision to commence proceedings for penalties against him under Taxes Management Act 1970 section 98 subsec-or-para (1)sec. 98(1) of the Taxes Management Act 1970 for failure to comply with two notices served upon him under Taxes Management Act 1970 section 20 subsec-or-para (3)sec. 20(3) of the Act. The penalties to which he could become liable if he has wrongfully failed to comply with the notices are a penalty not exceeding £50 and further to that a penalty of £10 a day for a continuing failure to comply.

The relief he seeks is a declaration that the documents referred to in the Board's notices are protected by professional privilege and consequently he is by reason of Taxes Management Act 1970 section 20Bsec. 20B(8) of the Act not obliged to produce them and another declaration that by reason of his protection underTaxes Management Act 1970 section 20B subsec-or-para (8)sec. 20B(8) in respect of those documents the Board is not entitled to commence or to continue the bringing of penalty proceedings against him.

The grounds he relies upon are that the documents requested are copies of documents brought into existence solely for the purpose of obtaining advice from him as counsel in contemplation of proceedings possibly to be brought by the Board against or involving his client, Mr. Al-Atia, and his instructing solicitor, Mr. Rickless, who is an American lawyer. His client has not given consent for the documents in Mr. Goldberg's possession to be produced to the Board. Further or alternatively the documents form part of his instructions to advise on taxation related matters. Further or alternatively the documents were made by legal professional advisers of a party being the result in whole or in part of the professional knowledge, research and skill of those advisers. So for any one or more of those reasons it is maintained that the documents are clothed with professional privilege and if necessary reliance is placed upon the provisions of Taxes Management Act 1970 section 20B subsec-or-para (8)sec. 20B(8).

The Board is anxious to see the documents in question. For a number of years the tax affairs of Mr. Al-Atia have been under investigation by the Special Office. This concerns the receipts by him or his Panamanian companies, so they are said to have been, of about £17m by way of commissions on oil shipments from Abu Dhabi to an American company. Documentary evidence of the relevant transactions has been impossible to obtain. Mr. Al-Atia in interview has denied receiving money taxable in this country. Original documents, the copies of which are those in question, are no longer in the possession of Mr. Rickless. Their present whereabouts are at present unknown. Notices to disclose those documents have been served on both Mr. Rickless and Mr. Al-Atia but they have not been complied with. Assessments have been made on Mr. Al-Atia but they have not borne fruit.

The Board has been frustrated at every turn in its endeavours to fully enquire into...

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7 cases
  • Dubai Bank Ltd v Galadari
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 20 October 1989
    ...with the view expressed by the Divisional Court of the Queen's Bench Division in a judgment delivered by Watkins L.J. in R v. Inland Revenue, Ex p. Goldberg [1989] Q.B.267. It is also necessary to consider the position on the facts. 4 The basis of this privilege on grounds of law goes back ......
  • Graham Brown and Another v Maurice Bennett and Others
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 18 December 2001
    ...clients. 94 So far as more recent authorities are concerned, I refer first to the decision of the Divisional Court in R. v. Board of Inland Revenue, Ex parte Goldberg [1989] Q.B.267. That case suggests that the principle in Lyell v. Kennedy (or explained in Ventouris [1991] 1 W.L.R.607 at 6......
  • Tromso Sparebank v Beirne (No. 2)
    • Ireland
    • High Court
    • 1 January 1989
  • Lubrizol Corporation and Another v Esso Petroleum Ltd and Others
    • United Kingdom
    • Chancery Division
    • 7 May 1992
    ...v Cammell Laird & Co (Shipbuilders and Engineers) LtdWLR ([1959] 1 WLR 702) and R v Board of Inland Revenue, Ex parte GoldbergELR ([1989] QB 267); and that the Canadian affidavits were for that reason privileged. However, in Dubai Bank Ltd v GaladariELR ([1990] Ch 98) the Court of Appea......
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