Bamber, R (on the application of) v HM Revenue & Customs [2007] EWHC 798 (Admin)

[2007] EWHC 798 (Admin)Case No CO/8225/05
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 4 th April 2007
Before
THE HON. MR JUSTICE LINDSAY
Between
THE QUEEN (on the application of TIMOTHY REX BAMBER)ApplicantCOMMISSIONERS OF H M REVENUEDefendantsAND CUSTOMSDefendant
Mr David Southern (instructed by Simpson Millar) for ApplicantMr Clive Lewis QC (instructed by H.M. Revenue and Customs) for DefendantsHearing Hearing date: 28 th March 2007
JudgmentMr Justice Lindsay :
[1]On the 8th February 2005 the Applicant, Mr T.R. Bamber, then an airline pilot employed by MyTravel Limited, applied for leave judicially to review a decision (“the November decision”) made by the Respondents, the Commissioners for HM Revenue and Customs (“the Commissioners”) in their letter of 30th November 2004. On 11th April 2005 Ouseley J. gave Mr Bamber permission to do so. By the November decision the Commissioners resiled from an indication given by letter (“the June Agreement”) of 9th June 2004 by which they agreed certain increased specified flat rate expense allowances (“FREAs”) for MyTravel’s pilots and cabin crew. Mr Bamber was at the time the representative of the British Airline Pilots Association on MyTravel’s company council. In his application for judicial review he advanced evidence not only or even principally as to his own personal position but he spoke, as it seemed, chiefly for MyTravel’s air crew generally. When I heard the application in November 2005 it was thus mainly argued as if on behalf of MyTravel’s air crew generally, thereby including Mr Bamber’s own personal position within the general argument. In a judgment delivered on 21st December 2005 I dismissed the application so far as it sought general effect. That judgment sets out at some length both what I took to be the relevant law and the relevant facts, looking at the application as being one mainly concerned with the position of MyTravel aircrew generally. I shall not repeat that judgment but will assume it has been read.[2]But Mr Bamber had given some evidence of how the Commissioners, by the November decision, had caused detriment to him personally and to his personal financial position. In reliance on the June Agreement, he said his wife had ordered a new kitchen and he had taken his family on a cruise, in each case, he asserted, that being an expenditure which he would not have embarked upon had not the June Agreement indicated that, by way of the application of the increased FREA which it had agreed, extra money would be available to him. In the penultimate paragraphs of my judgment, I said as follows:- “Moving, then, to regarding Mr Bamber’s application as an attempt to bar the Revenue from resiling from the June Agreement but only as between himself and the Revenue, his evidence, even regarding it with the lenience appropriate where it has been chiefly shortcomings on the Revenue’s part that have led to there being a case between him and the Revenue, is not in my view sufficient to prove that detrimental reliance which opens the door to relief on the ground of substantial unfairness. He could reasonably have been expected to give evidence as to when his new kitchen was ordered, when his cruise was booked and their respective costs relative to the size of whatever greater rebate would have come his way under the June Agreement than will now come to him upon his no longer having such expense evidence as he had kept until learning of the June Agreement but of which, upon his learning of it, he had felt able to and did dispose. If a case of substantial unfairness was intended to be made out then evidence of his means generally and of the difficulties, not otherwise likely to have arisen, which the new kitchen and the cruise have led him into should have been adduced. For want of such detail I am minded to dismiss Mr Bamber’s application but it may be that, on reflecting on this judgment generally, he would wish to have an opportunity to supplement the very little and general evidence so far adduced as to his personal case of reliance, detriment and unfairness by fresh evidence on those subjects. If, by himself, his Solicitors or Counsel, he indicates to the Revenue and to the Court by the end of January 2006 that he wishes to adduce further evidence as to his personal position only then I will then adjourn his application for Judicial Review generally but so far only as it seeks relief only between him and the Revenue, with liberty for that application to be restored to me by either party for directions not later than 16th February 2006. If Mr Bamber does not so indicate by the end of January next or in the meantime indicates to the Revenue or the Court that he does not so wish to adduce further evidence then his application (for relief only between himself and the Revenue) will be dismissed as if from today’s date.”[3]In good time before the expiry of the prescribed period Mr Bamber’s solicitors indicated that he did wish to show that he had acted to his personal detriment in reliance on the June Agreement before it had been abrogated by the November decision and he filed evidence to that end on 25th January 2006. That was met with a witness statement of 24th February 2006 from Mr J.R. Streeter on behalf of the Commissioners.[4]The first date proposed for the further hearing had to be abandoned because of my unavailability and a date, the 28th March 2007, was fixed for the further hearing. In the Order giving effect to my judgment of December 2005 I had prescribed a timetable for further evidence which ended with the Commissioners’ evidence to be completed by the 28th February 2006. I had not provided for evidence from Mr Bamber in reply. Only very shortly before the hearing on the 28th March 2007 Mr Bamber sought to put in a further, fourth, witness statement on 26th March. When the present hearing before me began on 28th March the first matter I had to deal with was whether that late statement could be admitted against the opposition of the Commissioners. I ruled, in a short judgment, that it could, in effect, only be fairly admitted if the Commissioners were afforded an adjournment in order to answer it; but neither the Commissioners nor Mr Bamber asked for an adjournment and so, in the event, the fourth witness statement of Mr Bamber was excluded. Mr Bamber’s present personal application thus falls to be dealt with upon the evidence which he filed before the original hearing in November 2005, supplemented by his witness statement of the 25th January 2006, as answered by Mr Streeter in February 2006. But before I deal with the evidence I should deal with some jurisdictional or procedural difficulties in Mr Bamber’s path.[5]Mr Bamber’s judicial review claim form of February 2005 is the only claim for judicial review before me; it has not been amended. The decision sought to be reviewed is the November decision and the only relief sought in respect of that decision has at all times been and been only a quashing order and costs. However, Mr Southern, who appeared before me on behalf of Mr Bamber both at the November 2005 hearing and on this further hearing, in his Skeleton Argument of 26th February 2007 has a passage as follows:- “If necessary, the claimant seeks leave to amend Section 6 of his judicial review claim form under CPR 17.1.2, 17PD1 by adding a claim in these terms:
“1A. QUASHING ORDER in relation to Mr Bamber, to the extent that as at 30th November 2004 he had altered his position in reliance on the agreement of 9 June 2004. The claimant appreciates that, in the absence of any order quashing the decision of 30 November 2004 generally, he cannot seek to rely on the June Agreement going forward.”
Mr Southern never pursued that indication; leave to amend was not sought either in that form or at all. Accordingly, on the face of things, a quashing Order in respect of the November decision remained the only relief ostensibly sought. However, when, in the course of argument, I asked Mr Southern whether Mr Bamber still sought a quashing Order or whether, for example, he was looking somehow to receive a sum of money, Mr Southern confirmed it was a sum of money and not a quashing order which Mr Bamber now attempted to obtain. That presents Mr Bamber with procedural or jurisdictional difficulties.[6]Firstly, a sum of money has never, on the face of things, been sought by Mr Bamber. Secondly, a form of declaration such that, if (as one would expect) it were then respected by the Commissioners, would have led to Mr Bamber being paid a sum of money, has never been framed by Mr Bamber and put as a proposed form of amendment to the relief sought, nor has any such been considered by the Commissioners or the Court. Thirdly, the ability, by way of judicial review, to award a sum of money, is far from unlimited. Mr Clive Lewis QC, who appears for the Commissioners on this application and who also appeared, then as a junior, at the hearing in November 2005, draws my attention to CPR 54.3(2) which provides:- “A claim for judicial review may include a claim for damages, restitution or the recovery of a sum due but may not seek such a remedy alone. (Section 31.4 of the Supreme Court Act 1981 sets out the circumstances in which the Court may award damages, restitution or the recovery of a sum due on a claim for judicial review).” Section 31(4) of the Supreme Court Act 1981 as amended with effect from the 1st May 2004 provides as follows:- “On an application for judicial review the High Court may award to the applicant damages, restitution or the recovery of a sum due if –(a) the application includes a claim for such an award arising from any matter to which the application relates; and(b) the Court is satisfied that such an award would have been made if the claim had been made in an action begun by the applicant at the time of making the application.”[7]It will have been seen that Mr Bamber’s claim does not include a claim for an award of damages, restitution or the recovery of a sum due; hence section 31(4)(a) is not satisfied. To that extent it is unnecessary to examine whether 31(4)(b) is satisfied but, were it necessary to look into that, then it can be seen that section 31(4)(b) impales Mr Bamber on the horns of a dilemma. Were the Court to be satisfied that, had Mr Bamber made a claim for a recovery of a sum in proceedings begun by action by Mr Bamber in February 2005 such that an award would have been made in his favour, that could only be so if he had a good claim available in private law against the Commissioners. On that basis, were that so, section 31(4)(b) would have been satisfied and, had only 31(4)(a) been also satisfied, he would have been able to proceed towards a recovery of a sum by judicial review. But, had Mr Bamber had a good claim in private law for recovery of a sum, it would be impossible for him also to assert that he had suffered any significant material detriment by relying upon the June Agreement decision before it had been abrogated by the November decision. There would be no significant detrimental reliance by Mr Bamber because, on this footing, he would, after all, have been left with a sound private law cause of action against the Commissioners. His satisfying section 31(4)(b), which he needs to show in order (leaving section 31(4)(a) aside) to be able to recover a sum of money from the Commissioners by judicial review thus totally undermines the very ground, detrimental reliance, on which he claims, by judicial review, to recover from them. In the event, I see no route by which Mr Bamber can be awarded the only relief which he indicates that he now seeks, namely the payment of a sum of money. However, lest that be wrong, I shall consider his application on the evidence.[8]In his first witness statement, before me in November 2005, Mr Bamber, speaking of his personal position, had said:- “In reliance upon the June agreement, I and many of my colleagues took decisions that we would not otherwise have taken. For instance, in my particular case, my wife went ahead with the purchase of a new kitchen, and we took the children on a cruise….. Financial resources were committed that otherwise would not have been. In addition to myself, I believe most of my colleagues cleared out expense receipts as these were no longer required”. I explained that reference to expense receipts in my December 2006 judgment. Mr Bamber’s first witness statement continued:
“As a result of the Inland Revenue’s decision to resile from the June agreement I have been left with financial liabilities that I would not have incurred had I not relied upon the fact that a written agreement had been reached. Furthermore, in reliance upon the June agreement, myself and many of my colleagues disposed of expense receipts as they were no longer required. It is now impossible for me and my colleagues to submit a claim in respect of those expenses because we no longer have the supporting documentation.”
[9]In his witness statement of the 25th January 2006 Mr Bamber, a married man with three children, all of whom are in full-time education, indicated that his salary in 2004/2005 as an airline pilot was £62,449.10. He had no savings because, he explained, his family’s expenditure had always broadly equalled or exceeded his income. He understood from April 2005, he said, that pilots and cabin crew who had worked for the airline since 6th April 1997 would receive a repayment of tax in the summer of 2004. He said “I had a good idea about what I was likely to receive”. That, in my view, is something of an overstatement. What he was likely to receive would very much depend on at what level the new FREA was fixed and that was unknown for certain until the June Agreement. However, it was plain before June that some increase was likely. Mr Bamber continued:- “When the letter of the 9th June [the June Agreement] arrived I worked out that I should receive nearly £6,000 plus an effective pay increase of nearly £1,000 a year”. He continued:- “It never occurred to me …. that the money would not be received. We all thought, in the words of Angela Slater [the relevant representative of the Commissioners at the time] that it was set in stone”.[10]Mr Bamber then amplified his earlier references to a cruise and to improvements in the kitchen to his house. Of the cruise, he said:- “When it became apparent that a large tax rebate would be coming our way we booked a summer holiday. We have never booked a summer holiday before or since. This was principally because we never had the spare money. We chose to go on a cruise, because this would enable the girls [his daughters] to see a relatively large number of interesting cities. The cruise was paid for on the 9th July 2004. The cost to me was £1,625.60. In addition, I used up the whole of my staff travel concession for the year. We regarded this as a luxury which we would not have allowed ourselves, but for the promised tax rebate, especially when we were getting a lot of building work done on our home.” He enclosed the credit card account showing that the £1,625.60 was paid on 9th July 2004. A little later in his witness statement he concludes, by way of summary:- “I would not have taken my family on a cruise but for the fact that I believed I would receive a tax rebate”.[11]So far as concerns the cruise, Mr Streeter, on behalf of the Commissioners, points out in his evidence that Mr Bamber does not state precisely when he decided to go on a holiday or when the cruise was booked. He had not, said Mr Streeter, provided any documentation indicating when the decision was taken or when the booking was made. It did not follow from the fact that £1,625.60 had been debited to his credit card on 9th July 2004 that the booking was made after the June Agreement but before the November decision. In the ordinary way one might expect payment for a cruise to be split between an original deposit, which would give some indication of the date when the booking was made, and a later payment of a balance but Mr Bamber’s cruise was on exceptional terms as a concession to MyTravel staff. There is no reason to doubt that the cost (that is to say, the whole cost) was £1,625.60 and, as Mr Bamber asserts, as that was paid for in July 2004, there is no reason to think that a booking was made or a decision to take a holiday was made before the June Agreement. So far as concerns the cruise, these objections of the Commissioners, in my judgment, fail.[12]As for improvements to the kitchen, Mr Bamber says that in the winter of 2003/4 – plainly well before the June Agreement – “we started a programme of substantial building work, which included a new kitchen”. He continues:- “I financed this by taking out a further mortgage on the property”. The “work”, he said, was nearing completion in 2004. “My wife wanted additional features to the kitchen. I agreed”, he continued, “that she could have these, as these extras, and the cruise, will be nicely covered by the tax rebate; we had kept up till now on budget.” A little later he continues:
“The building work was completed in August 2004 and the final bill for the work of £7,740 was presented in September 2004. I was unable to pay it all. Only some two weeks previously correspondence from Angela Slater had confirmed that a tax rebate would be coming shortly. However, the money had still not arrived. I could not keep the builders waiting for payment. We did not have an overdraft. My wife and I thus applied for an overdraft facility, limited to the minimum amount which I needed to pay this bill, £4,550. I chose to apply for an overdraft rather than a personal loan because I thought this would simply be bridging finance until the tax repayment was received”
. On getting the overdraft he immediately wrote a cheque to pay the kitchen company. He exhibited a receipt from the kitchen company for £7,740 but it gives no details save to say that it is for “balance”. His bank required his overdraft to be substantially reduced on a regular basis. There is no suggestion it still exists or that real difficulty was encountered in paying off the principal or interest.[13]This new detail in relation to the expenditure on a kitchen belied what he had earlier said, namely that, in reliance upon the June agreement, his wife had gone ahead with the purchase of a new kitchen. Thus Mr Lewis, on behalf of the Commissioners, invited me to treat Mr Bamber’s evidence as to his reliance upon the June Agreement with real caution. Mr Streeter’s evidence pointed out that there was no detailed evidence as to the nature of the additional work that had been undertaken relative to the kitchen, nor when it was ordered, nor was there any documentary proof. Mr Lewis argued that my judgment of December 2005 had made it plain what evidence was needed. Accordingly, he said, Mr Bamber could have had no doubts about what was required and yet, even so, the evidence fell short. It was not clear, pointed out Mr Lewis, that the £7,740 was wholly in respect of additional features ordered only after June 2004 or whether additional features would, in some form, have had to be ordered to complete the kitchen works begun in the winter of 2003/4. In any case, added Mr Lewis, if Mr Bamber was expecting nearly £6,000 in reliance upon the June Agreement he could hardly have spent both the £1,625.60 for the cruise and all of £7,740 for kitchen work in reliance upon an expected supplement of only £6,000 in the tax year. It may have been that the overdraft of £4,550 coupled with the cruise of £1,625.60 was said to be expenditure incurred in reliance upon the June Agreement but even that exceeded, as a total, the sum of “nearly £6,000” which had been, said Mr Bamber, anticipated as the initial enhancement he could look forward to. Mr Lewis emphasised that, in the Al Fayed decision referred to in paragraphs 48 and 59 of my December 2005 judgment, emphasis had been laid upon the need for a claimant in such a case to produce detailed evidence of whatever unfairness was said to have been suffered. Even though, said Mr Lewis, my December 2005 judgment had pointed Mr Bamber to the detail that was required, there was, even so, no evidence of any difficulties not otherwise likely to have arisen which the new kitchen and the cruise had led Mr Bamber into and which, but for reliance upon the June Agreement, would not have arisen.[14]It is the case that, relative to the kitchen, I could not, on the not wholly clear evidence, find a gross detriment to Mr Bamber above £4,550 nor, in relation to the cruise, one in excess of £1,625.60 but a feature I found troubling was that Mr Southern, for Mr Bamber, would not admit any deduction from that gross detriment to reflect that the family had, after all, enjoyed a cruise and continued to enjoy an improved kitchen. No authority was led on the subject by either side but, as it seems to me, when, in a general way, one is attempting to assess something as nebulous as “unfairness”, one has to some degree to bring into the computation the advantages (or at least the foreseeable advantages) which the activity relied upon as detrimental reliance has led to. But I was given no figure from Mr Bamber as an attempt by him to quantify in some way the advantage which had been gained by his family and himself from his otherwise detrimental reliance upon the June Agreement. If I am right in seeing that what should here be attempted to be evaluated is what could loosely be called a net detriment, then the net detriment would, on the evidence here, in relation to the cruise and the kitchen, be, in my view, little above insignificant.[15]Two further kinds of detriment are asserted by Mr Bamber. Firstly, that, on his learning of the new greatly increased FREA, the expense receipts which he had kept from earlier years were thrown away. As I explained in my earlier judgment, if, in a given year, a MyTravel employee spent on expenses more than the level of the current FREA, it behoved him to keep vouchers and other records of his expense outgoings in the year so that he could, as was permitted, claim a deduction from his taxable income for that year of a sum greater than deduction merely of the FREA would authorise. He says:- “I had kept evidence of work expenses but once the new FREA was agreed I assumed that this served no purpose and I cleared out expense receipts.”[16]He does not say when the expense receipts were “cleared out”, nor what, in summary, they amounted to for any given year. As Mr Lewis points out, the evidence is less than convincing because Mr Bamber gives no reason why, in earlier years, he had not produced his expense receipts, year by year, in order to reduce his taxable income as, year by year, it accrued and fell to be taxed. Why should MyTravel employees, having expense receipts exceeding the current FREA for years, say, one, two and three, wait until year 5, for example, to produce those receipts and ask for a corresponding reduction of taxable income? There was no suggestion he had deliberately not claimed year by year in order to build up a “nest egg”. Mr Bamber gives no explanation and, coupled with the caution which the inaccuracy of his evidence about the kitchen engendered, I am left unconvinced about the disposal of expense receipts being or leading to some form of detriment consequential upon the November decision.[17]A final kind of detriment, but of a non-financial kind, which Mr Bamber asserts as a consequence of the November decision was that he found himself criticised, if not worse, by fellow aircrew members for having (they said) misled pilots about the refunds that they were going to get upon the introduction of the new higher FREAs. MyTravel, as I explained in paragraphs 18 and 19 of my December 2005 judgment, joined with Mr Bamber as MyTravel’s BALPA company council member in circulating MyTravel’s pilots with the new agreed figures, linking the agreement with an industrial action ballot which was then being considered. The joint circularised letter of the 14th June described the newly increased FREA as “a significant increase in the tools of trade allowance”. It continued later:- “We are sure you will recognise that this is a major improvement brought about by a joint and detailed approach to the Inland Revenue. It demonstrates goodwill and effective co-operation between the Company and its employee representatives…. We would ask you to consider this in light of your deliberation during the current ballot for the new FTL proposals, which have similarly been jointly developed by BALPA and the Company to bring shared benefits and further security to the workforce as a whole.”[18]There is no suggestion that the Revenue had been forewarned or even consulted in relation to the linkage between the improved FREA and the industrial action ballot which the letter of 14th June included. Miss Slater of the Revenue had not seen the letter until after it had been sent out. It was that letter coupled with the later abrogation by the Commissioners of the June Agreement that led to criticism of Mr Bamber by his colleagues. But, as it seems to me, that criticism of Mr Bamber and the hurt which he thereby suffered was far too remote to be regarded as a detriment which could fairly be laid at the Commissioners’ door. The Commissioners had no reason to foresee that the linkage between the industrial action and the improved FREA should be made nor to expect, if the June Agreement were to be resiled from, that it was other than the Commissioners that would be criticised. I reject this non-financial detriment as a subject in respect of which some monetary compensation is to be expected from the Commissioners in favour of Mr Bamber.[19]To revert to the financial detriments alleged and of which I have written, there is no evidence of difficulties in Mr Bamber’s financial position to which they led. I accept Mr Southern’s submission that detriment short of hardship can suffice but, despite my indicating in December 2005 that any financial difficulties not otherwise likely to have arisen for Mr Bamber were to be the subject of further evidence, nothing, beyond the (as it seems) temporary incurring of an overdraft is spoken of in Mr Bamber’s evidence. There is, for example, no evidence of difficulties incurred or sacrifices made in relation to his mortgage, the education of his children, the forsaking of any otherwise routine expenditure, the reduction of any contribution to his pension arrangements or anything otherwise detrimental that is said to have flowed from a reliance upon the June Agreement before it was abrogated by the November decision. Mr Bamber speaks of his health having deteriorated and adds that on the 10th May 2005 he was grounded and will never fly again but there is no suggestion that either of those events can fairly be regarded as a consequence, let alone a foreseeable consequence, of the Commissioners’ November decision.[20]In my December 2005 judgment I wrote – para 64 – of there being a public interest in the Commissioners not permitting and not being seen to have permitted an agreement, such as the June Agreement, which was so out of accord with their general practice. There was thus – see para 65 – a substantial public interest pointing towards the Commissioners being entitled to resile from the June agreement. I was then enjoined – see para 47 of my December 2005 judgment – to give some weight to the Commissioners’ own evaluation that there is a public interest that supports a resiling from the June Agreement as being not improper. Mr Lewis reminded me of the judgment of Judge J., as he then was, in the MFK Underwriting Agencies case which I cited in paragraph 47 of my earlier judgment and where Judge J. indicated that the Court should be extremely wary of deciding to be unfair actions which the Commissioners themselves have determined to be fair. As I pointed out in that paragraph 47, that did not mean that the Revenue is itself the only arbiter of what is fair but it emphasises, where the Revenue has responsibly considered whether its actions are, in all the circumstances, fair, that due weight is to be given to that evaluation. Mr Streeter’s evidence, after consideration of the latest (admissible) evidence of Mr Bamber is that the Commissioners would still have concluded that there is not sufficient evidence to establish personal detriment on Mr Bamber’s part or to quantify the amount of the detriment or to demonstrate that it really would be unfair to him for the Commissioners to resile from the June Agreement. Some weight has to be given to that consideration.[21]I would not regard what one might call the gross detriment to Mr Bamber personally such as flowed from the November decision and such as fairly could be laid at the Commissioners’’ door as wholly insignificant but if I am to limit myself to looking only at what I have called the net detriment then I would not regard that as truly significant and, whether it is the gross or the net to which I should look, I would see neither as making it worse than, to use Simon Brown LJ’s phrase, “a bit rich” on the Commissioners’ part and certainly well short of its being illogical, immoral or outrageously unfair on the Commissioners’ part to resile as they did. For the Commissioners to have done as they did, although unattractive, was, in my judgment, neither disproportionate to the problem which the June Agreement led to in relation to the public interest nor an abuse of power.[22]Accordingly, for the reasons I have given, and even assuming that Mr Bamber is able to overcome what I have described as the procedural or jurisdictional problems in the way of his having a monetary award in his favour, I would nonetheless dismiss his application.