Wha Ltd and Viscount Reinsurance Company Ltd and Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judge | Lord Justice Neuberger,Lord Justice Latham,Lord Justice Waller,LORD JUSTICE NEUBERGER,LORD JUSTICE LATHAM |
| Judgment Date | 14 December 2006 |
| Neutral Citation | [2004] EWCA Civ 559,[2004] EWCA Civ 1456,[2006] EWCA Civ 1824 |
| Date | 14 December 2006 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | C3/2003/1412,Case No: C3/2003/1412/CHRVF,C3/2003/1412(A) |
[2004] EWCA Civ 1456
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(MR JUSTICE LLOYD)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Latham
Lord Justice Neuberger
C3/2003/1412
MR J PEACOCK QC AND MR A ROBERTSON (instructed by Solicitors for Customs and Excise) appeared on behalf of the Appellants
MR R CORDARA QC (instructed by Messrs Deloitte & Touche) Appeared on behalf of the Respondents
Monday, 25th October 2004
On 14th May 2004 we handed down judgment on an appeal brought by the Commissioners of Customs and Excise in connection with a VAT scheme. The judgment is now reported at [2004] STC 1081. Two issues were left over, which had been left over before the judge below, Lloyd J. They were, in summary terms, the abuse of rights issue and the Halifax issue. In light of the judgment we have given we invited the parties to try and agree the future course of these proceedings. They have been unable to do so and accordingly they appear before us with a view to deciding how matters should proceed.
As my Lord, Latham LJ, pointed out in argument, there are four possible courses open. The first is to remit the Halifax and abuse of rights issues, which I will call the outstanding issues, back to the judge. The second is to give permission to the Commissioners to appeal to the House of Lords, or to refuse permission to appeal with a view to the Commissioners renewing their application to their Lordship's house. The third is to decide the outstanding points and then turn to consider whether or not to grant leave to appeal to their Lordship's house. The fourth is to await the outcome of the current cases to be heard before the European Court of Justice in relation to the abuse of rights issue and, possibly, the Halifax issue.
There are variants on those issues which were briefly considered, in his pithy address, by Mr Roderick Cordara, who appears as before for the respondents. Thus, one of the outstanding issues could be sent back to the judge and the other determined by us and possibly going to the House of Lords. However, to my mind, realistically and sensibly, Mr Cordara said that this was not an attractive course. The possibility of yet further fragmentation, as he called it, is plainly unpalatable, both from the point of the view of the parties and from the point of view of good case management.
As my Lord indicated when we came into court, having considered the very helpful and full submissions of the parties in writing, our inclination was to adjourn further consideration of this case until the outcome of the European Court proceedings to which I have made reference.
That is a different course from that taken by the judge below, who, subject to the question of the appeal which in due course came before us, gave directions for the determination of the outstanding issues, which determination has, of course, been adjourned pending this appeal.
In my view at any rate, the course taken by the learned judge, following his judgment of 28th February 2003, was entirely understandable and not inconsistent with the course which commended itself to my Lord and me provisionally, because Lloyd J was approaching matters by reference to the situation as it stood at 28th February 2003, more than a year and a half ago.
We are told that the European Court will hear three conjoined cases relating to the outstanding issues on 23rd November 2004 ie, a month from today. In those circumstances it seems to me that we would have to be quite satisfied that both the outstanding issues are acte claire and can be dealt with confidently and quickly, and will not in any way be affected by the outcome of the European Court of Justice's decision in the three joint cases to which I have referred, before we did anything other than adjourn this matter to await the outcome of the European Court's decision.
While I acknowledge the force of the points Mr Cordara makes, I remain firmly of the view that the most sensible and appropriate course to take is that which provisionally commended itself to both of us when we had considered all the papers helpfully provided by the parties.
Insofar as there is a European dimension in relation to the outstanding issues, and so far as abuse of rights issues are concerned there must be, and in relation to the Halifax issue there also is the possibility of there being a European dimension because this is a case involving VAT, it seems to us that it would be very dangerous, save in the clearest possible case, to reach a conclusion, or give directions which might involve Lloyd J reaching a conclusion, which pre-empted the decision and reasoning of the European Court of Justice.
However the Halifax issue and the abuse of rights issue may have been formulated in the tribunals in previous cases, such as those three which are to come before the European Court; the Halifax case, the Bupa Hospitals case, and the University of Huddersfield case, the European Court of Justice will have its own views on the issues. It seems to me that, both as a matter of law and in relation to the facts found by the tribunal in the present case, it is impossible to be confident that one can dispose of those issues in advance in this case without the assistance of the views of the European Court of Justice.
I would be more uneasy about taking this course if it were not for the fact, as I have already mentioned, that the cases are due to come before the European Court of Justice in less than a month.
To let the matter go before the House of Lords, either by giving leave to appeal, or by putting the Commissioners in a position where they have to issue a petition for leave, seems to me unrealistic in terms of fairness to the parties and fairness to their Lordships. It may be that this case will be conclusively determined by the decision of the European Court of Justice, although it is only fair to say that Mr Cordara's arguments, both on law and on the facts found in this case, give one very considerable doubts as to whether that will be the case. But given that it may be the case it would be quite wrong to land the House of Lords, with their already busy schedule, with a case where the outcome may be academic.
Further, to land the House of Lords with a case which includes the two outstanding points when we do not even know what the European Court of Justices' guidance and decisions on those two outstanding points may be, seems to me to be unreasonable and impracticable.
In those circumstances, of the various courses available to us it seems to me that that which initially commended itself to us is the one to which we should adhere. Therefore, at least for my part, I would adjourn this matter until a period which I hope can be agreed between the parties, or if not we will have to determine it, from the date on which the European Court decision is given in the three cases to which I have referred.
I agree. So the consequence is that this application, in effect for directions as to how the outstanding issues should proceed, is adjourned to 56 days after the determination by the European Court of the issues in the Halifax case.
ORDER: application adjourned to 56 days after the determination by the European Court of the issues in the Halifax case.
[2004] EWCA Civ 559
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Lloyd)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Waller
Lord Justice Latham and
Lord Justice Neuberger
Case No: C3/2003/1412/CHRVF
Jonathan Peacock Esq, QC & Aidan Robertson Esq
(instructed by the Solicitor for Customs & Excise) for the Appellant
Roderick Cordara Esq, QC
(instructed by Messrs Deloitte & Touche) for the Respondent
Introduction
This is an appeal brought by the Commissioners of Customs and Excise ("the Commissioners") from a decision of Lloyd J (reported at [2003] STC 648). He allowed an appeal by WHA Limited ("WHA") and Viscount Reinsurance Company Limited ("Viscount") from a decision of the VAT and Duties Tribunal (Chairman Stephen Oliver QC). The appeal requires the resolution of three issues which arise under European and domestic legislation relating to Value Added Tax ("VAT"). All references to sections hereafter are to sections of the Value Added Tax Act 1994 ("the 1994 Act").
The appeal concerns the effectiveness of a scheme which is designed to minimise overall liability to VAT in the context of motor breakdown insurance ("MBI"). In brief, the scheme is intended to work as follows. MBI policies are issued to members of the public by an English company, National Insurance & Guarantee Corporation plc ("NIG") through the agency of another English company, Warranty Holdings Limited ("Warranty"). NIG reinsures its liabilities under these policies with a Gibraltar based company called Crystal Reinsurance Co Limited ("Crystal") which in turn retrocedes 85% of the reinsurance to another Gibraltar based company, Viscount. Viscount contracts...
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