In Evonik Degussa UK Holdings and others v HMRC [2016] EWHC 86 (22 January 2016), the High Court granted summary judgment in the latest instalment of the FII litigation.
These were seven applications for summary judgment by claimants enrolled in the FII Group Litigation in respect of their claims for restitution of advance corporation tax (ACT) paid on foreign income dividends (FIDs). The claims related to the period between 1 July 1994, when the FID regime was introduced in the UK, and 5 April 1999, when ACT was abolished.
This decision is the most recent step of the protracted and complex history of the FII Group Litigation. The seven sets of claimants hoped to replicate the success of the BAT test claimants, and they relied on the same arguments which had persuaded the High Court in FII (High Court) II [2014] EWHC 4302 that the law was now clear in relation to such claims. Their primary claim was therefore for summary judgment under CPR rule 24.2. The court saw no reason to depart from the conclusions reached in FII (High Court) II. In particular, it did not consider that HMRC’s arguments would have a real prospect of success.
HMRC argued, inter alia, that summary judgment was not available because the claimants did not seek judgment on either the whole of their claim or on a particular issue, but rather on part of their overall claim for restitution (CPR rules 24.1 and 24.2). The court pointed out, however, that Practice Direction 24 para 1.2 provided that the word ‘claim’ includes a part of a claim.
Finally, HMRC asserted that the applications were premature, as the claimants had not applied for the stay imposed on their claims by the FII GLO to be lifted either before or when they had made their applications. The court observed that HMRC must have been aware of its right to object to the applications on this ground, but that it had refrained from asserting that right either at the case management hearing or when the applications had been listed for trial. A waiver by acquiescence was therefore established and arguably a promissory estoppel too.
The court found, however, that it was unable to grant summary judgment in relation to the quantification of claims for restitution in the form of compound interest, for the period after utilisation or repayment of the relevant ACT, as the Supreme Court had granted HMRC leave to appeal in this respect. It also excluded part of the claim of one of the claimants (Perkins), which was subject to pending proceedings before the FTT.
Why it matters: The claims amounted to approximately £207m. The claimants willingly accepted that they had not formally applied for the stay to be lifted on or before making their applications for summary judgment. Their reason for not doing so was their apprehension that, if given notice of their intention to apply for summary judgment, HMRC might take immediate steps designed to prevent the claimants from obtaining the benefit of final judgments in their favour, for instance by procuring the enactment of fresh legislation. The court observed: ‘Experience has shown that such fears are by no means fanciful.’
In Evonik Degussa UK Holdings and others v HMRC [2016] EWHC 86 (22 January 2016), the High Court granted summary judgment in the latest instalment of the FII litigation.
These were seven applications for summary judgment by claimants enrolled in the FII Group Litigation in respect of their claims for restitution of advance corporation tax (ACT) paid on foreign income dividends (FIDs). The claims related to the period between 1 July 1994, when the FID regime was introduced in the UK, and 5 April 1999, when ACT was abolished.
This decision is the most recent step of the protracted and complex history of the FII Group Litigation. The seven sets of claimants hoped to replicate the success of the BAT test claimants, and they relied on the same arguments which had persuaded the High Court in FII (High Court) II [2014] EWHC 4302 that the law was now clear in relation to such claims. Their primary claim was therefore for summary judgment under CPR rule 24.2. The court saw no reason to depart from the conclusions reached in FII (High Court) II. In particular, it did not consider that HMRC’s arguments would have a real prospect of success.
HMRC argued, inter alia, that summary judgment was not available because the claimants did not seek judgment on either the whole of their claim or on a particular issue, but rather on part of their overall claim for restitution (CPR rules 24.1 and 24.2). The court pointed out, however, that Practice Direction 24 para 1.2 provided that the word ‘claim’ includes a part of a claim.
Finally, HMRC asserted that the applications were premature, as the claimants had not applied for the stay imposed on their claims by the FII GLO to be lifted either before or when they had made their applications. The court observed that HMRC must have been aware of its right to object to the applications on this ground, but that it had refrained from asserting that right either at the case management hearing or when the applications had been listed for trial. A waiver by acquiescence was therefore established and arguably a promissory estoppel too.
The court found, however, that it was unable to grant summary judgment in relation to the quantification of claims for restitution in the form of compound interest, for the period after utilisation or repayment of the relevant ACT, as the Supreme Court had granted HMRC leave to appeal in this respect. It also excluded part of the claim of one of the claimants (Perkins), which was subject to pending proceedings before the FTT.
Why it matters: The claims amounted to approximately £207m. The claimants willingly accepted that they had not formally applied for the stay to be lifted on or before making their applications for summary judgment. Their reason for not doing so was their apprehension that, if given notice of their intention to apply for summary judgment, HMRC might take immediate steps designed to prevent the claimants from obtaining the benefit of final judgments in their favour, for instance by procuring the enactment of fresh legislation. The court observed: ‘Experience has shown that such fears are by no means fanciful.’
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