Wilover Nominees Ltd v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAMP,LORD JUSTICE RUSSELL |
| Judgment Date | 30 July 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0730-8 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 July 1974 |
[1974] EWCA Civ J0730-8
In The Supreme Court of Judicature
Court of Appeal
Civil Division
Lord Justice Russell,
Lord Justice Stamp and
Lord Justice James
The Hon. B.L. BATHURST, Q.C. and Mr MICHAEL MILLER, Q.C. (instructed by Messrs Beer, Dunnett & Co.) appeared on behalf of the Appellant (Plaintiff).
Mr PATRICK MEDD, Q.C. and Mr PETER GIBSON (instructed by Solicitor of Inland Revenue) appeared on behalf of the Respondents (Defendants).
LORD JUSTICE RUSSELL; Lord Justice Stamp will deliver the Judgment of the Court.
This is an appeal from an Order of Mr Justice Goulding dismissing an action brought by the Plaintiff company, which is the trustee of a declaration of trust known as the Marita Seigal Declaration of Trust, for a declaration that the Plaintiff was under no obligation to furnish certain particulars which had been required by the Commissioners of Inland Revenue pursuant to Section 453 of the Income and Corporation Taxes Act, 1970, and giving judgment on the counterclaim for a nominal penalty for the Plaintiff's failure to do so.
Section 453, so far as material, provides that "the Board may by notice in writing require any person boing a party to a settlement to furnish them with such particulars as they think necessary for the purposes of any of the provisions of Chapter III of Part XVI of the Act.
The case in the Court below is reported in 1973 1 Weekly Law Reports at page 1393. The facts are fully set out in the Judgment of Mr Justice Goulding, and we need not repeat them.
The learned Judge, for the reasons which he gave, and with which we agree, hold that Parliament, in providing that the Board "may require any person boing a party to a settlement to furnish them with such particulars as they think necessary for the purposes of any of the provisions of" Chapter III, intended to leave a very wide discretion to the Commissioners. And, leaving aside for the moment the submission advanced by the Plaintiff that the particulars which were here required to be furnished wereoppressive and burdensome, the Plaintiff cannot successfully challenge the Commissioners' requirements unless he can show that no reasonable delegate of the Commissioners — here Mr Bailey - could, applying his mind to the question, have thought the required particulars necessary for the purpose of determining whether there is a settlement which attracts one of the provisions of Chapter III.
As Mr Justice Goulding pointed out, Chapter III contains provisions which are elaborate and complex. References in that chapter to a "settlement" are, by Section 454(3) of the Act, defined to include, among other things, "an agreement or arrangement" and a person is deemed to have made a settlement if "he has provided or undertaken to provide funds directly or indirectly for the purposes of the settlement or has made with any other person a reciprocal arrangement for that other person to make or enter into the settlement". An example of the wide impact of the provisions contained in Chapter III is to be found in the recent decision of the House of Lords in Inland Revenue Commissioners -v- Mills, 1974 2 Weekly Law Reports, 325, and an examination of the facts of that case show that it is quite impossible to form a view whether a settlement does or docs not fall foul of one of the sections found in Chapter III until you have ascertained the facts which may bring it within them. And you may or may not find, when all the facts relating to an "arrangement" have been ascertained, that a particular individual who is not a party to any instrument which could naturally be described as a "settlement" — e.g., a contract to perform services - is a "sottior" for the purposes of Chapter III. And then there is, as Mr Justice Gouldingpointed out, often room for legitimate argument about whether particular provisions of the Chapter catch an arrangement which has been made.
The Plaintiff's attack on the request for particulars is directed to those required under head (iv) and more particularly head (v) of the notice given under Section 453, namely:- (iv) derails of all acquisitions and disposals of assets (including any interest under any other trust) by the company as trustee of the said declaration; (v) a copy of all Board minutes of the company relating to the company's appointment as, or to anything done by the company as, trustee of the said declaration.
On behalf of the Plaintiff it was frankly conceded that the settlement of which, as it subsequently turned out, the declaration formed only part, was designed to reduce the incidence of taxation. But it was pointed out that at the stage when the particulars were required the Commissioners had not oven seen the declaration of trust; and Mr Bathurst asked the rhetorical question how could they think these particulars were necessary before they had oven seen the declaration. There is, in our judgment, a fallacy here. Section 453 does not provide that if there are grounds for thinking that a settlement falls within the provisions of Chapter III the Board may require such particulars as they think...
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