Sharkey v HM Revenue and Customs; Sharkey v De Croos (Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE ETHERTON |
| Judgment Date | 09 February 2006 |
| Neutral Citation | [2006] EWHC 300 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH/2005/APP/0179 |
| Date | 09 February 2006 |
[2006] EWHC 300 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Etherton
Case No: CH/2005/APP/0179
MR. TIM WARD (instructed by H.M. Revenue & Customs Solicitors) for the Respondent.
MR. TERENCE SHARKEY for the Appellant.
Approved Judgment
Introduction
1. This is an appeal by the taxpayer, Harvard Martin Sharkey, from the decision of the Special Commissioner, Mr. Theodore Wallace, on 26 th January 2005 (“the Decision”) dismissing the Appellant's appeal against a fixed penalty of £50 under section 97AA(1)(a) of the Taxes Management Act 1970 (“ TMA”).
2. The penalty was imposed for failing to comply with a notice served under TMA s.19A requiring the Appellant to produce specified documents and information for the purposes of an enquiry into his 2001 tax return.
3. It was common ground before the Special Commissioner that the Appellant did not appeal against the notice and he did not comply with it.
4. It was also common ground that on 24 th March 2003 the Revenue appropriated £50 of a payment of £654.21 in satisfaction of the penalty.
5. Very broadly, the Appellant complains that the imposition of the penalty and matters connected with it have breached his rights under the European Convention on Human Rights, particularly Article 6.
Proceedings before the Special Commissioner
6. The Appellant's contentions before the Special Commissioner were that the enquiry, the imposition of the penalty under TMA s.97AA(1)(a) and the threat of further penalties of £150 daily under TMA s.97AA(2)(b) until compliance involved criminal charges within Article 6; but his inability to obtain Criminal Defence Service funding for professional representation, and the unilateral collection of the penalty, in the absence of a fair and public hearing within a reasonable time by an independent and impartial tribunal, were contrary to his rights under Article 6; further, the nature of the enquiry and the role of the Tax Inspector brought the activities of the Inspector within the Codes of Practice issued under the Police and Criminal Evidence Act 1984 (“PACE”), but there was a failure by the Inspector to comply with such Codes. In addition, the Appellant submitted that the imposition of the penalty for failure to provide information was in breach of Article 6.1 as a violation of the right not to incriminate oneself.
7. The Special Commissioner rejected all those complaints. He held that the fixed penalty of £50 under TMA s.97AA(1)(a) is not a criminal charge within Article 6. Accordingly, the inability of the Appellant to obtain Criminal Defence Service funding was irrelevant. The Special Commissioner found that there was no evidence that any prosecution was being considered or any penalties involving criminal proceedings within Article 6.1 were contemplated by the Revenue at the time of the enquiry and the imposition of the penalty, and, accordingly, there had been no infringement of any right to silence and not to incriminate oneself under Article 6.1.
The appeal
8. In the Appellant's skeleton argument and in the oral submissions made on his behalf, it was submitted very broadly that the Special Commissioner was wrong in law in his conclusions that: the £50 penalty on the Appellant under TMA s.97AA(1)(a) was not a criminal charge within Article 6; the inability of the Appellant to obtain funding assistance for the present proceedings was irrelevant; there had been no breach of his right to remain silent and not to incriminate himself under Article 6; and the provisions of PACE and the Codes issued under it were irrelevant.
9. In addition, the Appellant maintained that the Special Commissioner showed bias against the Appellant.
10. As was the case before the Special Commissioner, the Appellant appeared in person. He requested that he be represented, as he had been before the Special Commissioner, by his father, Terence John Sharkey (“Mr. Sharkey”). There was no objection to that application by the Respondents, Her Majesty's Revenue & Customs (“HMRC”). Although Mr. Sharkey has no legal qualifications or training, I granted permission for Mr. Sharkey to act as the Appellant's advocate in view of the exceptional circumstances that Mr. Sharkey acted in a similar capacity before the Special Commissioner, was responsible for drafting the Notice of Appeal and wrote the extensive skeleton argument for the Appellant on this appeal.
11. Mr. Tim Ward, counsel, appeared for HMRC.
Article 6
12. Article 6 is as follows:
“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.”
Criminal Charge?
13. At the core of the appeal is the Appellant's contention that the Special Commissioner erred in law in holding that the £50 penalty under TMA s.97AA(1)(a) is not a criminal charge within Article 6.
14. It is convenient to refer, first, to TMA s.19A which, so far as relevant, is as follows:
“19A Power to call for documents for purposes of certain enquiries
(1) This section applies where an officer of the Board gives notice of enquiry under section 9A( 1) or 12AC(1) of this Act to a person (‘the taxpayer’).
(2) For the purpose of the enquiry, the officer may at the same or any subsequent time by notice in writing require the taxpayer, within such time (which shall not be less than 30 days) as may be specified in the notice—
(a) to produce to the officer such documents as are in the taxpayer's possession or power and as the officer may reasonably require for the purpose of determining whether and, if so, the extent to which—
(i) the return is incorrect or incomplete, or
(ii) in the case of an enquiry which is limited under section 9A( 5) or 12AC(5) of this Act, the amendment to which the enquiry relates is incorrect, and
(b) to furnish the officer with such accounts or particulars as he may reasonably require for that purpose.”
15. TMA, s.97AA is, so far as relevant, as follows:
“97AA Failure to produce documents under section 19A”
(1) Where a person fails to comply with a notice or requirement under section 19A(2) …. of this Act.…, he shall be liable, subject to subsection (4) below –
(a) to a penalty which shall be £50, and
(b) if the failure continues after a penalty is imposed under paragraph (a) above, to a further penalty or penalties not exceeding the relevant amount for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed)
(2) in subsection (1)(b) above ‘the relevant amount’ means –
(a) in the case of a determination of a penalty by an officer of the Board under section 100 of this Act, £30;
(b) in the case of a determination of a penalty by the Commissioners under section 100C of this Act, £150.
(3) An officer of the Board authorised by the Board for the purposes of section 100C of this Act may commence proceedings under that section for any penalty under subsection (1)(b) above, notwithstanding that it is not a penalty to which subsection (1) of section 100 of this Act does not apply by virtue of subsection (2) of that section.
(4)
No penalty shall be imposed under subsection (1) above in respect of a failure within that subsection at any time after the failure has been remedied.”
16. TMA s.100 is, so far as relevant, as follows:
“100 Determination of penalties by officer of Board”
(1) Subject to subsection (2) below and except where proceedings for a penalty have been instituted under section 100D below an officer of the Board authorised by the Board for the purposes of this section may make a determination imposing a penalty under any provision of the Taxes Acts and setting it at such amount as, in his opinion, is correct or appropriate.
….
(3) Notice of a determination of a penalty under this section shall be served on the person liable to the penalty and shall state the date on which it is issued and the time within which an appeal against the determination may be made.
(4) After the notice of a...
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