R v R (Disclosure to Revenue)
| Jurisdiction | England & Wales |
| Judgment Date | 01 October 1997 |
| Date | 01 October 1997 |
| Court | Family Division |
Family Division.
Wilson J.
Michael Addison, Solicitor, Inland Revenue.
James Turner (instructed by Payne Hicks Beach) for the husband.
The wife appeared but took no part.
The following cases were referred to in the judgment:
J(HD) v J(AM)WLR [1980] 1 WLR 124
R v IR Commrs, ex parte TC Coombs & Co TAXTAXTAX[1989] BTC 251; [1991] BTC 89 (HL); (1989) 64 TC 124
R v Revenue Adjudicator's Office, ex parte Drummond TAX[1996] BTC 587
S v S (Disclosure of Material) TAXWLR[1997] BTC 333; [1997] 1 WLR 1621
This was an application by the Revenue to set aside an order of the court that an inspector attend an appointment to produce pages of a judgment given in chambers which they had obtained in irregular circumstances. The husband, in proceedings by the wife for ancillary relief, had made an application to the court that the Revenue be ordered to deliver up all copies of the judgment in their possession.
On 7 November 1994, the judge had delivered a written judgment in chambers. In the course of that judgment he found, on the evidence of the husband and his accountant, that the husband had not disclosed all his income to the Revenue over a number of years. The judge therefore made an addition to the husband's declared income in his calculations of ancillary relief.
The judgment was not released for publication, but copies of some pages of it were sent to the Revenue and assessments raised against the husband in consequence.
The only people who had authorised access to the judgment were the husband and his accountant and the wife and her accountant.
Eight months after the judgment, when he became aware that copies had been sent to the Revenue, the husband made an application to the court to reduce the order for ancillary relief because, he alleged, the very substantial tax assessments made on him had made the allocation of capital directed in 1994 grossly unfair. On 19 August 1997 the court made an order that an inspector should attend and produce all correspondence between the wife and her accountant with the Revenue concerning the husband's affairs and any covering letter which might indicate how parts of the transcript of the judgment came into the possession of the Revenue.
The Revenue objected to that order on the ground that it was an important principle that those who provided information to the Revenue about possible under-declarations of income by others should not have their identity revealed. Otherwise information valuable to the Revenue would not be forthcoming.
Held, dismissing both applications:
1. While it was in the public interest that the anonymity of informers should be preserved, there was also a public interest that in proceedings for ancillary relief the parties should make full and frank disclosure of their resources. If it was thought that candour would lead to exposure of tax evasion and additional assessments, many litigants might not make full disclosure.
2. In this case, if the wife had been instrumental in sending the judgment to the Revenue, her conduct could be relevant to any adjustment of the financial order and the circumstances in which the transcript came to be in the possession of the Revenue should be explored. The inspector should attend as ordered.
3. However, the Revenue should be allowed keep the copy pages of the transcript in view of the detailed evidence of under-declaration which they contained which had been acted on and the eight-month delay by the husband in making his application:S v S (Disclosure of Material) TAX[1997] BTC 333distinguished.
Wilson J: Two applications are before me: an application by the Revenue to set aside an order that I made on 19 August 1997 that Mr Kennedy, an inspector of taxes, should attend a production appointment before the court today; and an application by the husband, as I will call him notwithstanding that decree absolute of divorce has been pronounced, that the Revenue should deliver up to the court all copies which it holds of any part of the transcript of the judgment which I delivered in these proceedings on 7 November 1994.
The background is that there was a substantial and hotly contested hearing of the wife's application for ancillary relief in this court in the autumn of 1994. At the end of it I delivered a long reserved written judgment.
The husband is a professional person with a distinguished practice. In the course of my judgment, pursuant to my duty, to survey his resources and in particular his income, and having heard substantial evidence from him and some...
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