Waste Recycling Group Ltd v HMRC
| Jurisdiction | England & Wales |
| Judge | The Chancellor,Lady Justice Arden,Lady Justice Smith |
| Judgment Date | 23 July 2008 |
| Neutral Citation | [2008] EWCA Civ 849 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 July 2008 |
| Docket Number | Case No: A3/2008/0117 |
[2008] EWCA Civ 849
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT CHANCERY DIVISION
MR JUSTICE BARLING
CH20070255
Before: The Chancellor of the High Court
Lady Justice Arden and
Lady Justice Smith
Case No: A3/2008/0117
Mr James Puzey (instructed by Solicitors of the Commissioners VAT & Excise Litigation, Salford) for the Appellant
Ms Penny Hamilton (instructed by Messrs PriceWaterhouseCoopers Legal LLP London WC2)) for the Respondent
Hearing date: 24 June 2008
Introduction
The respondent, Waste Recycling Group Ltd (“WRG”), is, pursuant to s.59 Finance Act 1996, the representative member of a group of companies which provides waste management services. It operates 60 landfill sites across the UK in accordance with the terms of its waste management site licences under Part II Environmental Protection Act 1990 and is liable to pay and has paid landfill tax charged in respect of taxable disposals of waste at its landfill sites. As long ago as 30th December 2002 it sought from the appellant (“HMRC”) a refund of landfill tax paid in respect of inert materials it had used in the period 1st October 1996 to 30th September 2002 either to provide the daily cover for active waste required by the terms of its licence or in the construction of roads on its sites. It contended that such use of inert material could not give rise to a taxable disposal for the purposes of landfill tax and sought a refund of £2,120,552 because the relevant materials had not been disposed of “as waste”.
The claim of WRG was refused by the Commissioners on 26th March 2004 and, after review, again on 16th September 2004. WRG appealed to the VAT and Duties Tribunal (Colin Bishopp Esq). By his decision released on 8th March 2007 the Tribunal rejected the appeal of WRG. WRG then appealed to the High Court. By his order made on 20th December 2007 Barling J allowed the appeal and set aside the order of the Tribunal. HMRC now appeals from the order of Barling J with the permission of Sir John Chadwick given on 20th February 2008. WRG has issued a respondent's notice seeking to uphold the judgment of Barling J on other grounds.
The Legislation
Landfill tax was introduced by the Finance Act 1996 Part III. The charge is imposed by s.40 in the following terms:
Charge to tax.
(1) Tax shall be charged on a taxable disposal.
(2) A disposal is a taxable disposal if—
(a) it is a disposal of material as waste,
(b) it is made by way of landfill,
(c) it is made at a landfill site, and
(d) it is made on or after 1st October 1996.
(3) For this purpose a disposal is made at a landfill site if the land on or under which it is made constitutes or falls within land which is a landfill site at the time of the disposal.”
Liability to pay the tax is imposed on the landfill site operator by s. 41. S.42 prescribes the amount of the tax per tonne of waste disposed of. The rate for what is known as active waste was £24 per tonne at the time of the Appeal to the High Court but for inactive or inert waste is only £2 per tonne. Ss.43 to 45 confer exemptions in relation to material removed from water, contaminated land, site restoration, mining and quarrying and pet cemeteries. Ss.47 to 57 concern the administration and collection of landfill tax. Ss.58 to 63 contain various miscellaneous provisions. Ss.64 to 70 are included under the rubric “interpretation” and are important to the issues in this appeal.
S.64 amplifies the condition of a chargeable disposal set out in s.40(2)(a). It provides:
“64. Disposal of material as waste.
(1) A disposal of material is a disposal of it as waste if the person making the disposal does so with the intention of discarding the material.
(2) The fact that the person making the disposal or any other person could benefit from or make use of the material is irrelevant.
(3) Where a person makes a disposal on behalf of another person, for the purposes of subsections (1) and (2) above the person on whose behalf the disposal is made shall be treated as making the disposal.
(4) The reference in subsection (3) above to a disposal on behalf of another person includes references to a disposal—
(a) at the request of another person;
(b) in pursuance of a contract with another person.”
S.65 performs the same function in respect of the condition for a chargeable disposal set out in s.40(2)(b). So far as material it provides:
65. Disposal by way of landfill.
(1) There is a disposal of material by way of landfill if—
(a) it is deposited on the surface of land or on a structure set into the surface, or
(b) it is deposited under the surface of land.
(2) Subsection (1) above applies whether or not the material is placed in a container before it is deposited.
(3) Subsection (1)(b) above applies whether the material—
(a) is covered with earth after it is deposited, or
(b) is deposited in a cavity (such as a cavern or mine).
(4) If material is deposited on the surface of land (or on a structure set into the surface) with a view to it being covered with earth the disposal must be treated as made when the material is deposited and not when it is covered.
[(5)-(8)]”
Ss.66 to 69 deal with the identification of landfill sites and their operators, ascertaining the weight of material disposed of and the definition of taxable activities. S.70 provides, so far as material:
“70. Interpretation: other provisions.
(1) Unless the context otherwise requires—
“material” means material of all kinds, including objects, substances and products of all kinds;
“taxable disposal” has the meaning given by section 40 above.
(2) A landfill disposal is a disposal—
(a) of material as waste, and
(b) made by way of landfill.”
Relevant Authorities
Before referring to either the facts of this case or the decisions of the Tribunal and Barling J it is convenient to refer to two authorities with which each of them dealt at some length. They are the decisions of Moses J in Commissioners of Customs & Excise v Darfish Ltd [2000] All ER (D) 361 and of the Court of Appeal in Commissioners of Customs & Excise v Parkwood Landfill Ltd [2002] STC 1536.
In Darfish its wholly-owned subsidiary, DNS, removed quantities of earth from two sites being developed by unassociated companies and deposited it on the landfill site owned and operated by Darfish for use by Darfish in site engineering. The Commissioners claimed that Darfish was liable for landfill tax because, they contended, all the conditions for a taxable disposal as defined by s.40 Finance Act 1996 were satisfied. The Tribunal had decided that the relevant deposit, which occurred after 1st October 1996, was made by DNS on behalf of Darfish and that as Darfish did not intend to discard the material but to make use of it in its site engineering works it was not disposed of “as waste”. The Commissioners appealed and Moses J allowed the appeal.
Moses J set out the relevant parts of the decision of the Tribunal and referred to the submission for the Commissioners that the disposal had not been made on behalf of Darfish but on behalf of the two independent developers who had intended to discard the material disposed of. He noted [8 and 18] that the Act did not define the word “disposal” but that it obviously included a “deposit”. He considered the meaning of the word 'disposal' as used in the Act in these terms [19]:
“I do not think that the reference to “disposal” in the Act can be confined to the moment of deposit. The reference to “deposit” in s.65 is for the purpose of interpreting one of the conditions necessary for chargeability under s.40(1), namely s.40(2)(b), and, of course, identifying whether, and if so who, was the landfill site operator. But the concept of making a disposal in s.64(1) seems me to connote more than the mere deposit of the material. Disposal seems to me, in the context of these provisions, to connote the parting with or the alienation of something. It is a term wider than discarding, since the statute contemplates that someone may dispose of something without discarding it leading to the conclusion that the material was not disposed of as waste. It is also a term wider than deposit, otherwise there is no reason why the statute does not use the word “deposit” throughout. Disposal will include, but not be confined to, any of the processes of removal, transport and deposit. It must include deposit because it is the deposit which triggers the tax and also identifies the time when the landfill site operator must be identified as such, but disposal is not limited to the process of deposit.”
Moses J considered [20] that the transfer of the relevant material to the site operator, which must occur at some stage in every case, was of no assistance in ascertaining the person on whose behalf the disposal was made. He held [21] that the disposal had been made by DNS on behalf of the two independent developers because they had requested the removal of the material. Accordingly it was their intention not that of Darfish which mattered. He considered that those conclusions were required by s.64(3) and (4). He continued [22]:
“Since it appears that the Tribunal found that the deposit (and possibly the transport) were made on behalf of Darfish, it is argued that its intention was the only intention which the Tribunal was required to consider. I disagree. I have construed 'disposal' as the antonym of retention. The focus of the provisions is upon the person...
To continue reading
Request your trial
-
R (on the application of Veolia ES Landfill Ltd and another company) v Revenue and Customs Commissioners; R (on the application of Viridor Waste Management and other companies) v Revenue and Customs Commissioners
...cell is filled up, and this material has come to be known as 'side fluff'. 4 In July 2008 the Court of Appeal gave judgment in Waste Recycling Group Ltd v HMRC [2008] EWCA Civ 849 ( "WRG"). This decided that a landfill site operator who had used various inert materials for building roads an......
-
R (on the application of Biffa Waste Services Ltd) v Revenue and Customs Commissioners
...the material placed immediately below the cap. Material changes to the legislation at the time of the Ruling 15 In July 2008, in Waste Recycling Group v HMRC [2008] EWCA Civ 849, CA (" WRG"), the Court of Appeal held (applying the earlier reasoning of the Court of Appeal in Parkwood v. HMRC......
-
Patersons of Greenoakhill Limited v The Commissioners for HM Revenue and Customs
...Appeal in Customs and Excise Commissioners v Parkwood Landfill Ltd [2002] EWCA Civ 1707 (‘Parkwood’) and HMRC v Waste Recycling Group [2008] EWCA Civ 849 (‘WRG’). The FTT said that the factual differences between Patersons’ case and the operations considered in Parkwood and WRG ‘could not b......
-
Pacific International Sports Clubs Ltd v Soccer Marketing International Ltd & others
...receive a fair trial in the natural foreign forum. 33 Mr Brisby cites Cherney v, Deripaska [2008] EWHC 1530 (Christopher Clarke J) and [2008] EWCA Civ 849 at paragraphs 29 and 59 as authority for the proposition that the issue for the judge hearing the application for a stay of proceedings......
-
Weekly Tax Update - July 20, 2015
...but only if the waste material is 'discarded'. In July 2008, the Court of Appeal ruled in a case concerning Waste Recycling Group Ltd ([2008] EWCA Civ 849) that where material received on a landfill site is put to a use on the site, for example, for the daily coverage of sites required unde......