Dear Colleagues,

 

Members may be interested in the decision of Henderson J in FJ Chalke Ltd & Anor v Revenue & Customs [2009] EWHC 952 (Ch) (08 May 2009) http://www.bailii.org/ew/cases/EWHC/Ch/2009/952.html <http://www.bailii.org/ew/cases/EWHC/Ch/2009/952.html> , in which the judge considered VAT claims to recover overpaid Value Added Tax. European Law and English Law issues are raised, including some interesting points on Sempra, mistake of law and change of position. The decision is very long, but the particularly restitutionary aspects are at [126]-[178]. The conclusions at [255] offer the gist of what is considered:

 

"The main conclusions which I have reached may be summarised as follows:

(1) As a matter of English domestic law, the statutory scheme in VATA 1994 for the repayment of wrongly levied VAT and the payment of simple interest thereon is exhaustive and excludes any other remedy.

(2) However, the Community law principle of effectiveness overrides the domestic statutory scheme where (as in the present cases) the overpayment of VAT was caused by breach of directly effective provisions of Community law. In those circumstances the San Giorgio principle, as it is now to be understood in the light of the judgments of the ECJ in FII and Thin Cap, requires that compound interest should be paid.

(3) The basis upon which an award of compound interest should be made in order to satisfy the claimants' directly effective Community law rights is the basis laid down by the majority of the House of Lords in Sempra.

(4) The restitutionary claims advanced by the claimants for the recovery of such interest are, however, time-barred, because the extended time limit for bringing the claims in section 32(1)(c) of the Limitation Act 1980 had already expired before the present claims were begun, and the claims were not revived by any acknowledgment or part payment within section 29(5).

(5) There is a principle of Community law which, in certain exceptional circumstances, may prevent a member state from relying upon its own wrong, but the principle does not apply in the present case so as to prevent the Commissioners from relying on the expiry of the limitation period under section 32(1)(c).

(6) The claimants' alternative damages claim also fails in its entirety, partly for reasons of limitation and causation, but also because the breaches of Community law which caused the claimants loss were not in my judgment sufficiently serious to found liability.

(7) The question whether the relevant provisions of Article 2 of the First Directive have direct effect is not clear, and if it were necessary to my decision I would refer it to the ECJ for a preliminary ruling."

 

Best wishes,

 

James

 

--

James Lee

Lecturer

Director of the LLB Programme

Birmingham Law School

University of Birmingham

Edgbaston

Birmingham

B15 2TT, United Kingdom

 

Tel: +44 (0)121 414 3629

E-mail: j.s.f.lee@bham.ac.uk

 

 

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