Terence Philip Ramsden v The Commissioners for HM Revenue and Customs

JurisdictionEngland & Wales
JudgeMr Justice Freedman
Judgment Date20 December 2019
Neutral Citation[2019] EWHC 3566 (QB)
Date20 December 2019
Docket NumberCase No: HQ17X00691
CourtQueen's Bench Division

[2019] EWHC 3566 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Hon. Mr Justice Freedman

Case No: HQ17X00691

Between:
Terence Philip Ramsden
Claimant
and
The Commissioners for Her Majesty's Revenue and Customs
Defendant

Conrad McDonnell and Steven McGarry (instructed by Muldoon Britton) for the Claimant

Matthew Parfitt (instructed by HMRC Solicitors' Office) for the Defendant

Hearing dates: 15 th – 19 th July 2019

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON. Mr Justice Freedman

Mr Justice Freedman Mr Justice Freedman

I CONTENTS

PARAGRAPH NUMBER

SUBJECT

1 – 2

Introduction

3 – 52

Factual Background

53–58

What happened to the Claimant's Documents?

Issues (i) – (xxvi)

The Preliminary Issue as ordered by Master Thornett

59 – 66

The Court's approach to evidence

67 – 97

Conversion/wrongful interference with goods

98 – 116

Date Protection Act claims

117 – 140

Loss of chance

141–155

Causation of loss

156–176

Limitation

177

Further issue

178

Conclusion

II INTRODUCTION

1

Despite numerous points of controversy, the parties are agreed that this is an unusual claim. One of many unusual features is how old it is. It goes back to the removal of documents by the Defendants in 1988 and to the Claimant's bankruptcy on the petition of the Defendants in 1992 and to his discharge from bankruptcy on 12 November 1996. The Claimant says that but for wrongs of the Claimant including the wrongful interference with his documents which were not returned to him, he would have been able to have demonstrated that he had no liability to the Defendant. He thereby would have avoided or would have had the chance to avoid liabilities of many millions of pounds: he would have or would have had the chance to recover payments made on account and to have avoided alleged liabilities and bankruptcy and its consequences. He makes claims under (a) the Data Protection Act, (b) as reversioner for damages to reversionary interests, and (c) for conversion and/or wrongful interference with goods at common law and/or under the Tort (Interference with Goods) Act 1997 (“the Claims”). By a preliminary issue on liability in principle only, as ordered by Master Thornett on 11 July 2018, this Court is to try “is HMRC liable to the Claimant in principle (aside from any issues of quantum) in respect of [the Claims]?”.

2

The context of this order was that the Defendants wished to have an order to avoid the need to adduce very expensive expert evidence at a proposed cost to the Claimant of £310,000 from a forensic accountant, a tax barrister and an expert in Gen-saki trading. The object of the trial was to decide what could be resolved without reference to expert evidence: hence the reference to liability in principle. The parties have agreed issues, and aside from issues 17 and 27(b) to which I shall refer, the parties are in agreement about the issues to be determined by the Court. This judgment will revert to the issues after discussing the factual background.

III FACTUAL BACKGROUND

(a) The 1980's

3

The Claimant began his career in the financial services industry at the age of 16. He began trading in the Japanese markets in the mid 1970's, initially as an employee of others.

4

In November 1979, he began trading as a sole trader. From 1982 he began using a Japanese ‘gen-saki’ financing system which allowed him to increase his leverage and trade on a larger scale notwithstanding these book losses. He began to be very profitable from approximately the start of 1985: as analysed by Dragoslav Lazarevic, a forensic accountant who gave evidence for the Serious Fraud Office in criminal proceedings: “his disclosed trading profits started to increase substantially from accounting periods starting on 27 January 1985”.

5

In 1984 the Claimant purchased an Edinburgh-based company called Glen International Plc (“Glen International”) which he controlled, and it traded in a similar manner to him. Glen International and the Claimant traded successfully in the Japanese market, and consequently Glen International's turnover rose from £18,000 to £3.5bn over a three-year period to 1987. The Claimant's trading was ostensibly profitable.

6

In his own words in paragraph 10 of his witness statement, the Claimant was “something of a celebrity figure” in the 1980s. At the height of the 1980s, the Claimant was spending more than £20m per year with bookmakers. Over this period the Claimant developed a flamboyant lifestyle, owning many racehorses and several racing stables as well as greyhounds. Mr Lazarevic on behalf of the SFO reported a total spent over a three-year period of £52,808,000 (para. 6.03, 6.10). In the same period, Mr Lazarevic reported that the Claimant had an income of nearly £100 million. His “general lifestyle” attracted the attention of the tax authorities.

7

The Defendants' Special Compliance Office (“SCO”) began a tax investigation. SCO was the Defendants' department investigating high value cases (in excess of £50,000 at that time) of suspected tax irregularity. From 1985, an Inspector of Taxes within that department, Michael Allcock proceeded to investigate the Claimant's taxation affairs.

8

In 1987 the stock market crashed. There was a significant decline of the Japanese stock market in the second half of 1987. The Claimant's business was severely affected. By 1988 Glen International had “ collapsed”. The Serious Fraud Office launched an investigation into the Claimant at around this time.

9

Following the significant decline of the Japanese stock market in the second half of 1987 including “ Black Monday” and the resultant collapse of Glen International, the Claimant suffered very significant losses in his trading period ending 26 January 1988.

10

The Defendants raised a number of assessments to income tax on dates between 1986 and 1988, covering the tax years from 1981/82 to 1986/87. Those acting on behalf of the Claimant at the time appealed and applied to postpone the payment of any tax due in relation to the majority of those assessments: postponement was a standard consequence of an appeal and resulted in no debt becoming immediately due. These were estimated assessments based on round sum estimates. There were unpostponed sums in relation to an assessment for the 1986/1987 year (i.e. sums which were payable even though subject to appeal).

11

In the spring of 1988, the predecessor body to the Defendants (the term “Defendants” is used to refer to the Defendants and their predecessors) took into their possession many of the Claimant's documents (“the 1988 Documents”). The exact scope of what was taken is in dispute, and the Defendants have required the Claimant to prove what was taken: see Defence paras.8–9.

12

One assessment relating to the 1981/1982 financial year (which was raised on 5 April 1988) was not appealed or postponed. The Claimant says that he was not served with the 1981/1982 assessment, which is why it was not challenged. He accepts that he received a copy of this assessment in 1999. The General Commissioners considered that he was aware of it in practical terms in 1992 when it formed part of the debt in a bankruptcy petition presented by the Defendants.

13

The Claimant or his advisers did not, however, immediately appeal the 1981/82 assessment, which (on its face) was issued on the last possible day of the 6-year statutory time limit for it, i.e. on 5 April 1988. The Claimant says that he did not appeal because he did not know about it. He states that it was not served on him at his current address, and the copy sent to his accountants was also wrongly addressed.

14

As regards the 1986/87 assessment, at the time it was issued (in November 1986), the Claimant appealed it but only requested postponement of part of the tax assessed, in effect therefore accepting at the time that the remaining part was due or likely to be due. The appeal against the assessment was commenced at a time prior to the large number of documents being handed over to the Defendants which subsequently were lost. At that time, the Claimant was not yet aware that he was going to make very substantial losses in the following year. The Claimant says that these losses would eliminate any liability to tax at all for 1986/87, on the basis of carry back loss relief.

15

Besides paying all the tax shown in his original tax returns, the Claimant made on account payments towards the assessment for 1986/87. The total payments on account were £2,574,681. In addition, the Defendants took security over Scottish property owned by the Claimant in respect of aggregate tax debt said to be £19,500,000 for the three years 1984/85, 1985/86 and 1986/87: that was the full assessed amount and was subject to the open appeals.

16

The primary reason for the assessments was that the Defendants suspected that he might in addition be personally liable for tax on the trading activities of certain offshore entities including two Liechtenstein Foundations and a Swiss company referred to as Anulda, Inshallah and Hereford. Having reached a suspicion of personal liability for two of the years in question (the period ending 26 January 1985 in particular where the profits of the overseas entities was approaching £20 million), the Defendants then raised a round sum estimated assessment and raised similar estimated assessments for several earlier tax years.

17

The Defendants ceased the investigation into the Claimant's taxation affairs in March 1991. At that time, the Defendants internally (and possibly without communicating this to the Claimant) accepted that they would not pursue any further the...

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