R v Commissioners of Inland Revenue, ex parte National Federation of Self-Employed and Small Businesses Ltd

JurisdictionEngland & Wales
Judgment Date27 February 1980
Judgment citation (vLex)[1980] EWCA Civ J0227-1
Docket NumberNo. 109/79
CourtCourt of Appeal (Civil Division)
Date27 February 1980
The Queen
The Commissioners of Inland Revenue Ex parte the National Federation of Self-Employed and Small Businesses Ltd.

[1980] EWCA Civ J0227-1


The Master of the Rolls

(Lord Denning)

Lord Justice Lawton and

Lord Justice Ackner

No. 109/79

In The Supreme Court of Judicature

Court of Appeal

On Appeal from the High Court of Justice

Queen's Bench Division

(Divisional Court)

MR. R. J. HARVEY, Q. C. and MR. S. SILMAN (instructed by Messrs. Beachcroft, Hyman Isaacs) appeared on behalf of the Applicant (Appellant).

MR. P. MEDD, Q. C. and MR. B. DAVENPORT (instructed by The Solicitor, The Inland Revenue) appeared on behalf of the Respondents.


The men are called the "Fleet Street Casuals". There are about 6,000 of them. They do casual work for newspapers. They love a bit of humour. When signing their pay dockets, they do not sign their true names. They use fictitious names and addresses. One favourite is "Mickie Mouse of Sunset Boulevard". Another is "Sir Gordon Richards of Tattenham Corner". But they do not sign in these names merely for fun. They use them for a serious purpose. It is to hide their true identities: so that they should not be discovered by the taxmen. By this means the "Fleet Street Casuals" have defrauded the Revenue of about £1 million a year.


The employers did not know their true names. But the trade unions did. There are three trade unions controlling this newspaper trade: NGA, NATSOPA and SOGAT. Every casual worker has to be a member of one of these trade unions: because they operate a closed shop. Each union has the names and addresses of all its casuals. When a man seeks work, he has to go to the "call office" of the union. He is then given a "call slip" authorising him to go to a particular newspaper for work. He does his work; receives his pay; signs his pay docket as "Mickey Mouse" or other fictitious name and address; and goes home. This device defeats the Revenue authorities completely. They do not know the true names of these men. The trade unions do. They have a complete list of the men, their names and addresses, and the shifts worked by them. In many ways the trade unions fill the role of the men's employers. But the Revenue authorities have no access to these lists. They have no power to compel the unions to disclose the true names and addresses. So they cannot assess them to tax on their earnings.


A year or two ago the Revenue authorities found out aboutthese false signatures. So did the B. B. C.. They had a programme on "Panorama" exposing these frauds. The Revenue authorities were perplexed. They wondered what was the best way to deal with the problem. They would have liked to have legislation to deal with it. But in the absence of new legislation, they felt that they had to make a special arrangement with those concerned. It looks as if these casuals threatened to take industrial action if their names were disclosed and they were made to pay up their past taxes. So the Revenue authorities had discussions with the employers and the trade unions. They came to a special arrangement. It was this: The men were to give their true names for the future and pay their future taxes: but they were given an AMNESTY for much of the past. They were to be let off most of the past tax of which they had defrauded the Revenue. The reasons are given in an affidavit by Mr. Hoadley, a principal inspector of taxes:


"… I considered that if any solution was to have a real prospect of being effective the agreement of the employers and the co-operation of the casual printing workers and their union representatives was essential. I feared that if this co-operation could not be achieved, the employers would be unlikely to agree to any solution because of the real possibility of industrial action being taken. The newspaper industry, as is well known, is peculiarly vulnerable to industrial action and the workers have a tradition of independence. Even when the new arrangement which I describe below was introduced with the approval of the employers and the co-operation of the trade unions, over ten million copies of newspapers were lost from consequential industrial action. While the possibility of industrial action would not prevent me from seeking a satis-factory solution to the problem of printing workers in Fleet Street, I considered that any scheme could only be effective for the future if it were introduced by general agreement rather than against a background of opposition ….


"… The main factor in my mind throughout this matter was to secure a new system for the future which would be effective to stop the tax loss. I considered that by this means more tax would be collected than if, without first securing the future, an attempt were made to recover the whole of the past tax which might have been lost. Such an attempt, being made against a large number of hostile workers where no records were available to show that they had been in receipt of casual earnings, would have been unlikely to produce any substantial sums of money and would, I consider, have seriously delayed or even permanently frustrated the introduction of the new arrangement".


News of the AMNESTY was given in the newspapers and on the television. Many were shocked by it. Especially some self-employed and small shopkeepers - good men and true who pay their taxes. They asked themselves: "Why should these 'Fleet Street Casuals' - who have defrauded the Revenue - be given this preferential treatment? Why should they be let off when any one of us (if he did any such thing) would have been pursued to the uttermost farthing?"


So these small men, through their Association, 50,000 of them, took legal advice. On it they have taken advantage of a new procedure called "Judicial Review". They have come to the courts and ask for this relief:


(i) A declaration that the Board of Inland Revenue acted unlawfully in granting an amnesty to casual workers in Fleet Street, and (ii) an Order of Mandamus directed to the Boardof Inland Revenue to assess and collect income tax from the said casual workers in Fleet Street, according to the law.


In support of their case, the self-employed and small shopkeepers sought to get the Board of Inland Revenue to disclose their papers relating to this amnesty: especially as to the negotiations with the unions and the employers. This has been adjourned: because of this preliminary objection: The Board of Inland Revenue object to these proceedings being taken against them. They say that no one has any standing to come to the courts to complain of their actions. No one at all. Not an ordinary citizen. Not even a taxpayer who is aggrieved by them. Not even the 50,000 of them in this Association. May be the Attorney-General might do so, but he has never been known to proceed against- a government department. The Divisional Court has upheld the contention of the Board of Inland Revenue. The self-employed and small shopkeepers, as taxpayers, appeal to this court.


This case thus raises a problem which was described a week ago in the New Law Journal for the 21st February, 1980 as "the major problem in revenue law. Locus standi. Who can challenge the legality of a tax concession?"


At first sight the House of Lords in Gouriet's case ( 1978) Appeal Cases 435 seem to have slammed the door against ordinary citizens coming to the court - except one who has suffered a particular damage. But that decision was concerned only with relator actions. Lord Wilberforce pointed out that it did not apply to the prerogative writs such as mandamus or certiorari. He said (at page 482) that "these are often applied for by individuals and the Courts have allowed them liberal access under a generous conception of locus standi". It is theseremedies that we are here concerned with. They apply only to public authorities, not to trade unions: so they were not available in Gouriet's case.


Now as to these prerogative remedies, it was thought in the 19th century that the applicant must show that he had a "specific legal right" to ask for the interference of the court. So said Tapping on Mandamus in 1828, followed by Mr. Justice R. S. Wright in ( The Queen v. The Guardians of the Lewisham Union 1897) 1 Queen's Bench at-page 500. That was a deplorable decision. The guardians of the poor for Lewisham were obliged by statute to see that everyone was vaccinated against smallpox. They failed in their duty. Owing to their default a great number of people were not vaccinated. That put everyone else at risk. Yet no one had any locus standi to complain. Not even the local authorities. Nobody was allowed to come to the court - so as to compel the performance of the duty. Similarly, in ( The Queen v. Commissioners of Customs and Excise, Ex parte Cook 1970) 1 Weekly Law Reports 450. Under a statute bookmakers were bound to pay for their licence by two half-yearly instalments. Yet a Minister, by a private concession, allowed some of them to pay monthly. It was held that nobody was allowed to come to the court so as to question the validity of the concession. Not even rival bookmakers could complain. Lord Parker, C. J. felt that the result was alarming in "that the word of the Minister is outweighing the law of the land". Yet he felt he must follow the Lewisham case. The time has come when we must declare that those cases were wrongly decided. They meant that public authorities could break the law with impunity: for the simple reason that no one had any locus standi. It is now clear that all the talk about "specificlegal right" was a mistake. There is only one requirement and that is simply that the applicant must have a "sufficient interest in the matter to which the application relates". That was the test recommended in 1975 by the Law Commission in their Report on Remedies in Administrative Law (Cmnd. 6407 paragraph 48) and adopted in the Rules of the...

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