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List members will find much to interest them in Henderson J's judgment in Test Claimants in the FII Group Litigation v HMRC [2008] EWHC 2893 (Ch). Among other things he holds that the change of position defence should be available to the Revenue in respect of money paid as tax which was not due, a finding which could make a difference to HMRC of between £2 billion and £5 billion: a nice illustration of Bill Cornish's comment that a change of position / fiscal chaos defence 'seems to contain the imperative that, if governments are to exceed their taxing powers, this should be done on the grandest scale' (WR Cornish, '"Colour of Office": Restitutionary Redress against Public authority' [1987] J of Mal and Comp Law 41, 52).

Bearing out Monica Chowdry's various articles on this subject, the judge also holds that HMRC are precluded from relying upon the curtailed limitation period for mistake-based claims introduced by section 320 of the Finance Act 2004, and retrospectively extended by section 107 of the Finance Act 2007, because in breach of Community law these sections purported to curtail the limitation period applicable to mistake claims without providing any transitional arrangements. The sums at stake, and the controversial nature of some of Henderson J's findings, guarantee that this case is destined for the House of Lords.

Happy reading!
CM

Professor Charles Mitchell
School of Law
King's College London
Strand
London WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465