======================================================================= == Date: Fri, 13 May 2005 16:23:49 +0100 Reply-To: Charles Mitchell Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Charles Mitchell MIME-Version: 1.0 Content-Type: text/plain; charset=ISO-8859-1 Content-Transfer-Encoding: 8bit In Campden Hill Ltd v Chakrani [2005] EWHC 911 (Ch) Hart J holds that the rule in Bannatyne v MacIver [1906] 1 KB 103 gives a claim in UE to a claimant whose money is used by an unauthorised agent to pay her principal's debts, but fails to explain what he thinks the unjust factor might be; confirms Robert Walker J's finding in El Ajou (No 2) [1995] 2 All ER 213, that where A and B's money is mixed in a bank account and Clayton's case deems A's money (and not B's) to have been paid to D, B can still claim against D if A makes no claim and is unlikely to do so;* applies the Roscoe v Winder lowest intermediate balance rule; and holds that a defendant has no change of position defence where he buys an interest in land as in these circs he is still enriched (analogising with Lord Templeman's car example in Lipkin Gorman). Online at: http://www.bailii.org/ew/cases/EWHC/Ch/2005/911.html CM * '[77] ... To treat the claimant as being entitled to trace its monies into the relevant payments out to [D] will not destroy the ability of the other potential claimants, as against the claimant, to assert their equitable title to those monies. It will simply be to recognise that, as against [D], the claimant has the better equitable title.' -- Charles Mitchell charles.mitchell@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 12:24:04 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Comments: To: Charles Mitchell In-Reply-To: <1115997829.4284c68549172@impmail.kcl.ac.uk> Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 I have a question concerning Deutsche Morgan Grenfell v IRC. It is a tax question and one I am not competent to answer. Can anyone answer it? (Offlist if preferred). Under section 247 of the Income and Corporation Taxes Act 1988 the law is that where a parent receives a dividend from its parent they can make a 'group income election.' If they make the election then Advance Corporation Tax is not payable. If they don't make the election, the Advanced Corporation Tax is payable but is set off against mainstream corporation tax payable later. So making the election means that payment of the tax is delayed. My question is whether there is any good reason why a company/group which can make the election would choose not to do so? I can see why you would choose to pay later, but why choose to pay earlier? If you do have to choose/elect before getting the delay, I cannot see how the CA's conclusion that the tax was not due can be correct. Robert Stevens ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 13:15:48 +0100 Reply-To: monica.chowdry@KCL.AC.UK Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Monica Chowdry Subject: Re: Comments: To: Robert Stevens In-Reply-To: <20050516112404.B3D79F4B9@webmail220.herald.ox.ac.uk> MIME-Version: 1.0 Content-Type: Text/Plain; charset="us-ascii" Robert As far as I understand it, there is little or no reason a group would not choose the delay - there is no benefit in paying the tax early The reason for the "election" seems to be twofold. First it is part of the IR's trend towards "hand ups" rather than "hand outs" Second, by requiring the election to be made, rather than providing an automatic exemption, the IR receives information on the payment earlier than it would otherwise do so through tax returns and so this increases their own certainy in receipts. As for the question of whether the tax was "due" - I agree that the tax was in fact not due because no election was made. However, to allow this to prevent the claim poses two problems as far as I can see. First, the ECJ clearly requires a claim to be possible (further to Metallgesellschaft). Second, this would provide the IR with far too neat a method of escaping liability in all cases. Best Monica On Mon, 16 May 2005 12:24:04 +0100 Robert Stevens wrote: > I have a question concerning Deutsche Morgan Grenfell v IRC. It is a tax question and one I am not competent to answer. Can anyone answer it? (Offlist if preferred). > > Under section 247 of the Income and Corporation Taxes Act 1988 the law is that where a parent receives a dividend from its parent they can make a 'group income election.' If they make the election then Advance Corporation Tax is not payable. If they don't make the election, the Advanced Corporation Tax is payable but is set off against mainstream corporation tax payable later. So making the election means that payment of the tax is delayed. > > My question is whether there is any good reason why a company/group which can make the election would choose not to do so? I can see why you would choose to pay later, but why choose to pay earlier? > > If you do have to choose/elect before getting the delay, I cannot see how the CA's conclusion that the tax was not due can be correct. > Robert Stevens > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 13:50:18 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Comments: To: monica.chowdry@KCL.AC.UK In-Reply-To: Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 I agree that a claim must be available. However, the claim was made, initially, in two ways: restitution and in tort. If the money is due and payable I don't think the claim for restitution should succeed. However, that is not problematic for the claim in tort. That the claim is properly seen as one for compensation is supported by the CA's decision in Sempra v IRC (especially para 49). If the claim is one for compensation in tort law, the extended limitation period in s 32(1)(c) of the Limitation Act 1990 should not be available. Consequently I think DMG v IRC is rightly decided but for the wrong reason. Actually, I think DMG v IRC is a re-run of Moses v Macferlan. There, money was paid under a court judgment which was never set aside or appealed. A subsequent court allowed an action for money had and received to succeed. Seen as a claim for restitution of an unjustified enrichment the case is wrongly decided. (Goff & Jones 44-001). It should not be possible to recover back money which is due and payable. However, as the orginal court action had been obtained in breach of contract an action based upon this wrong could succeed. RS In message monica.chowdry@KCL.AC.UK writes: > Robert > > As far as I understand it, there is little or no reason a group would > not choose the delay - there is no benefit in paying the tax early > The reason for the "election" seems to be twofold. First it is part of > the IR's trend towards "hand ups" rather than "hand outs" > Second, by requiring the election to be made, rather than providing an > automatic exemption, the IR receives information on the payment earlier > than it would otherwise do so through tax returns and so this increases > their own certainy in receipts. > > As for the question of whether the tax was "due" - I agree that the tax > was in fact not due because no election was made. However, to allow > this to prevent the claim poses two problems as far as I can see. > First, the ECJ clearly requires a claim to be possible (further to > Metallgesellschaft). Second, this would provide the IR with far too > neat a method of escaping liability in all cases. > > Best > Monica > > On Mon, 16 May 2005 12:24:04 +0100 Robert Stevens > wrote: > > > I have a question concerning Deutsche Morgan Grenfell v IRC. It is a > tax question and one I am not competent to answer. Can anyone answer > it? (Offlist if preferred). > > > > Under section 247 of the Income and Corporation Taxes Act 1988 the > law is that where a parent receives a dividend from its parent they can > make a 'group income election.' If they make the election then Advance > Corporation Tax is not payable. If they don't make the election, the > Advanced Corporation Tax is payable but is set off against mainstream > corporation tax payable later. So making the election means that > payment of the tax is delayed. > > > > My question is whether there is any good reason why a company/group > which can make the election would choose not to do so? I can see why > you would choose to pay later, but why choose to pay earlier? > > > > If you do have to choose/elect before getting the delay, I cannot see > how the CA's conclusion that the tax was not due can be correct. > > Robert Stevens > > > > ____________________________________________________________________ > > This message was delivered through the Restitution Discussion Group, > > an international internet LISTSERV devoted to all aspects of the law > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > the body of a message to . To unsubscribe, > > send "signoff enrichment" to the same address. To make a posting to > > all group members, send to . The list is > > run by Lionel Smith of McGill University, . > > > > ---------------------- > Monica Chowdry > Lecturer > School of Law > King's College London > Strand > London WC2R 2LS > Direct Line: 020 7848 1110 > monica.chowdry@kcl.ac.uk > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 15:20:03 +0200 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: hops problem Comments: cc: Frank Pettinicchio Mime-Version: 1.0 (Apple Message framework v622) Content-Type: text/plain; charset=US-ASCII; format=flowed Content-Transfer-Encoding: 7bit There is still a problem with the RDG. Postings (other than from me) are generating about 20 error messages, saying that the message cannot be delivered because it has been forwarded too many times which could indicate a mail loop. Examples: There was a posting by Charles Mitchell on 13 May, about the recent decision Campden Hill Ltd v Chakrani [2005] EWHC 911; another three postings today, 16 May, by Robert Stevens-Monica Chowdry-Robert Stevens, discussing Deutsche Morgan Grenfell v IRC. If you did not get these, then you are probably not getting *any* postings, except perhaps the ones that come from me. Mail servers send that error (and reject the incoming message) when they receive a message that has been forwarded more than a set number of times. Every mail host seems to generate a number of such "hops" internally, quite apart from the hops arising on the transfer of the message from one place to another. I started getting "could be a mail loop" errors last year, but they have suddenly gone off the scale. New virus and spam filtering at McGill seems to have added five hops at the McGill end and this is making too many total hops for many servers. Messages which I send are much less affected, presumably because they start from a McGill server and so have fewer hops against them when they get to the McGill listserv server. The McGill technical support people seem to think that the error-generating servers need to have their settings adjusted since what is a "normal" number of hops has risen over the years as spam filtering efforts have been increased. I have forwarded dozens of the error messages to Frank Pettinicchio who, I understand, thinks that the problem is particularly common with a particular kind of server software platform which has a too-low default number of hops. I understand that he has written to system administrators asking them to raise the permissible number of hops, and this seems to have reduced the number of errors. I can live with getting multiple error messages any time someone makes a posting, just as anyone who posts to the list is likely to get lots of messages along the lines that someone is away from the office for a few days. All I have to do is delete them. But I am starting to feel more and more as if the point of the RDG is undermined by this problem. If postings are not received by 5-10% of the subscribers, and those people have no way of knowing it, it seems to me we have a problem. There is very little that I, or the McGill techs, can do about this. For now I propose the following. If you did NOT get the messages from Charles and Robert, and you want to get RDG postings, please find out who is your system administrator and explain that you are not getting legitimate mail which is addressed to you because the maximum hop count is set too low. Perhaps you can just forward this message to the appropriate person. I am also going to forward the error message generated by one of Robert's postings to each of the people who was affected. Your system administrator might find that helpful in seeing exactly what is going wrong. Some of the errors seem to be caused by people who have one address subscribed to RDG, and that one is set up to forward to another, because I am getting "too many hops" errors from addresses that are not subscribed to the RDG at all. For example, if you use the address parachutepants@hotmail.com, this means you ... Meanwhile, if you want to see what postings you have missed, have a look at the archives at http://lists.mcgill.ca/archives/enrichment.html or at http://www.ucc.ie/law/restitution/rdg_admin/front.htm Yours, Lionel ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 14:23:05 +0100 Reply-To: monica.chowdry@KCL.AC.UK Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Monica Chowdry Subject: Re: Comments: To: Robert Stevens In-Reply-To: <20050516125018.C317213255@webmail221.herald.ox.ac.uk> MIME-Version: 1.0 Content-Type: Text/Plain; charset="us-ascii" Whilst I accept that the fact that the money was due causes a difficulty, the problem is the structure of the tax law in this area. It is correct that the election had to be made to obtain the relief and as the election was not made, the money was due. However, the only reason an election was not made is due to the fact that the law did not permit it to be made - incorrectly. Should the fact that someone did not claim because the tax law wrongly said they could not, prevent a claim in unjust enrichment? The Revenue has received the money in advance due to its law being incorrectly framed and this has happened at the expense of the taxpayer. If there had been an automatic exemption, there would be no issue - the tax would simply not have been due further to Metallgesellschaft. Should this change simply becasue the Revenue chose to use a mechanism for such an exemption that allowed them to collect informaiton earlier? On Mon, 16 May 2005 13:50:18 +0100 Robert Stevens wrote: > I agree that a claim must be available. However, the claim was made, initially, in two ways: restitution and in tort. If the money is due and payable I don't think the claim for restitution should succeed. However, that is not problematic for the claim in tort. > That the claim is properly seen as one for compensation is supported by the CA's decision in Sempra v IRC (especially para 49). > If the claim is one for compensation in tort law, the extended limitation period in s 32(1)(c) of the Limitation Act 1990 should not be available. > Consequently I think DMG v IRC is rightly decided but for the wrong reason. > > Actually, I think DMG v IRC is a re-run of Moses v Macferlan. There, money was paid under a court judgment which was never set aside or appealed. A subsequent court allowed an action for money had and received to succeed. Seen as a claim for restitution of an unjustified enrichment the case is wrongly decided. (Goff & Jones 44-001). It should not be possible to recover back money which is due and payable. However, as the orginal court action had been obtained in breach of contract an action based upon this wrong could succeed. > RS > In message monica.chowdry@KCL.AC.UK writes: > > Robert > > > > As far as I understand it, there is little or no reason a group would > > not choose the delay - there is no benefit in paying the tax early > > The reason for the "election" seems to be twofold. First it is part of > > the IR's trend towards "hand ups" rather than "hand outs" > > Second, by requiring the election to be made, rather than providing an > > automatic exemption, the IR receives information on the payment earlier > > than it would otherwise do so through tax returns and so this increases > > their own certainy in receipts. > > > > As for the question of whether the tax was "due" - I agree that the tax > > was in fact not due because no election was made. However, to allow > > this to prevent the claim poses two problems as far as I can see. > > First, the ECJ clearly requires a claim to be possible (further to > > Metallgesellschaft). Second, this would provide the IR with far too > > neat a method of escaping liability in all cases. > > > > Best > > Monica > > > > On Mon, 16 May 2005 12:24:04 +0100 Robert Stevens > > wrote: > > > > > I have a question concerning Deutsche Morgan Grenfell v IRC. It is a > > tax question and one I am not competent to answer. Can anyone answer > > it? (Offlist if preferred). > > > > > > Under section 247 of the Income and Corporation Taxes Act 1988 the > > law is that where a parent receives a dividend from its parent they can > > make a 'group income election.' If they make the election then Advance > > Corporation Tax is not payable. If they don't make the election, the > > Advanced Corporation Tax is payable but is set off against mainstream > > corporation tax payable later. So making the election means that > > payment of the tax is delayed. > > > > > > My question is whether there is any good reason why a company/group > > which can make the election would choose not to do so? I can see why > > you would choose to pay later, but why choose to pay earlier? > > > > > > If you do have to choose/elect before getting the delay, I cannot see > > how the CA's conclusion that the tax was not due can be correct. > > > Robert Stevens > > > > > > ____________________________________________________________________ > > > This message was delivered through the Restitution Discussion Group, > > > an international internet LISTSERV devoted to all aspects of the law > > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > > the body of a message to . To unsubscribe, > > > send "signoff enrichment" to the same address. To make a posting to > > > all group members, send to . The list is > > > run by Lionel Smith of McGill University, . > > > > > > > ---------------------- > > Monica Chowdry > > Lecturer > > School of Law > > King's College London > > Strand > > London WC2R 2LS > > Direct Line: 020 7848 1110 > > monica.chowdry@kcl.ac.uk > > > > ____________________________________________________________________ > > This message was delivered through the Restitution Discussion Group, > > an international internet LISTSERV devoted to all aspects of the law > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > the body of a message to . To unsubscribe, > > send "signoff enrichment" to the same address. To make a posting to > > all group members, send to . The list is > > run by Lionel Smith of McGill University, . > > > > > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 14:35:55 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Comments: To: monica.chowdry@KCL.AC.UK In-Reply-To: Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 Monica wrote > Whilst I accept that the fact that the money was due causes a > difficulty, the problem is the structure of the tax law in this area. > It is correct that the election had to be made to obtain the relief and > as the election was not made, the money was due. > > However, the only reason an election was not made is due to the fact > that the law did not permit it to be made - incorrectly. Should the > fact that someone did not claim because the tax law wrongly said they > could not, prevent a claim in unjust enrichment? The Revenue has > received the money in advance due to its law being incorrectly framed > and this has happened at the expense of the taxpayer. > If there had been an automatic exemption, there would be no issue - the > tax would simply not have been due further to Metallgesellschaft. > Should this change simply becasue the Revenue chose to use a mechanism > for such an exemption that allowed them to collect informaiton earlier? > It was this argument which caused me to ask whether the election was real. Looking at section 239 it seems to me that the election is a real one. The ability to carry back surplus ACT for up to six years (originally - later reduced to only two years precisely to limit this happening) found in s 239(3) provides a motive for not wishing to elect to defer payment. If the election is not made the subsidiary pays ACT and can carry it back against CT of these prior years up to the maximum capacity. That CT is then refunded (with interest, as appropriate). The situation could have arisen in practice. Perhaps the group had no interest in paying dividends for some years but was profitable, with plenty of distributable profits in the subsidiary but not higher up. ACT capacity should be maximised when dividends are then paid. If the election was a sham, why is it that in 247(3) a partial election is possible? RS ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 14:54:49 +0100 Reply-To: Charles Mitchell Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Charles Mitchell Subject: Re: In-Reply-To: <20050516133555.B6CCE13255@webmail221.herald.ox.ac.uk> Mime-Version: 1.0 Content-Type: text/plain; charset="us-ascii"; format=flowed I'm afraid that I don't understand the distinction which Robert makes between 'real' and 'sham' elections, nor why it should undermine Monica's point. Can you please clarify, Robert? Charles At 14:35 16/05/2005 +0100, Robert wrote: >Monica wrote > > > Whilst I accept that the fact that the money was due causes a > > difficulty, the problem is the structure of the tax law in this area. > > It is correct that the election had to be made to obtain the relief and > > as the election was not made, the money was due. > > > > However, the only reason an election was not made is due to the fact > > that the law did not permit it to be made - incorrectly. Should the > > fact that someone did not claim because the tax law wrongly said they > > could not, prevent a claim in unjust enrichment? The Revenue has > > received the money in advance due to its law being incorrectly framed > > and this has happened at the expense of the taxpayer. > > If there had been an automatic exemption, there would be no issue - the > > tax would simply not have been due further to Metallgesellschaft. > > Should this change simply becasue the Revenue chose to use a mechanism > > for such an exemption that allowed them to collect informaiton earlier? > > > >It was this argument which caused me to ask whether the election was real. >Looking at section 239 it seems to me that the election is a real one. > >The ability to carry back surplus ACT for up to six >years (originally - later reduced to only two years precisely to limit >this happening) found in s 239(3) provides a motive for not wishing to >elect to defer payment. If the election is not made the subsidiary pays >ACT and can carry it back against CT of >these prior years up to the maximum capacity. That CT is then refunded >(with interest, as appropriate). > >The situation could have arisen in practice. Perhaps the group had no >interest in paying dividends >for some years but was profitable, with plenty of distributable profits >in the subsidiary but not higher up. ACT capacity should be maximised >when dividends are then paid. > >If the election was a sham, why is it that in 247(3) a partial election is >possible? >RS ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 15:14:12 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Comments: To: Charles Mitchell In-Reply-To: <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 I am arguing that there may be good commercial reasons for choosing not to elect to defer to pay Advanced Corporation Tax under section 247 of the Income and Corporation Taxes Act 1988. This is because of the ability to set of ACT against Corporation Tax contained in section 239. The election is therefore "real" in the sense that a group may sensibly choose not to defer. Therefore I don't agree with Monica that "the Revenue chose to use a mechanism for such an exemption that allowed them to collect informaiton earlier." That is not the reason why the ability to elect is in the legislation. See also the ability to make a partial election. DMG never elected. They were unlawfully denied the choice to elect but that does not mean they should be deemed to have done so. Any such deeming would be fictional. The money was due. A claim for restitution should have failed. A better route is to say that there was a claim in tort for breach of Art 52 of the EC treaty )now Art 43): see R v Secretary of State for Transport, ex p. Factortame (no 7) [2001] 1 WLR 942. RS In message <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> Charles Mitchell writes: > I'm afraid that I don't understand the distinction which Robert makes > between 'real' and 'sham' elections, nor why it should undermine Monica's > point. Can you please clarify, Robert? > > Charles > > > At 14:35 16/05/2005 +0100, Robert wrote: > >Monica wrote > > > > > Whilst I accept that the fact that the money was due causes a > > > difficulty, the problem is the structure of the tax law in this area. > > > It is correct that the election had to be made to obtain the relief and > > > as the election was not made, the money was due. > > > > > > However, the only reason an election was not made is due to the fact > > > that the law did not permit it to be made - incorrectly. Should the > > > fact that someone did not claim because the tax law wrongly said they > > > could not, prevent a claim in unjust enrichment? The Revenue has > > > received the money in advance due to its law being incorrectly framed > > > and this has happened at the expense of the taxpayer. > > > If there had been an automatic exemption, there would be no issue - the > > > tax would simply not have been due further to Metallgesellschaft. > > > Should this change simply becasue the Revenue chose to use a mechanism > > > for such an exemption that allowed them to collect informaiton earlier? > > > > > > >It was this argument which caused me to ask whether the election was real. > >Looking at section 239 it seems to me that the election is a real one. > > > >The ability to carry back surplus ACT for up to six > >years (originally - later reduced to only two years precisely to limit > >this happening) found in s 239(3) provides a motive for not wishing to > >elect to defer payment. If the election is not made the subsidiary pays > >ACT and can carry it back against CT of > >these prior years up to the maximum capacity. That CT is then refunded > >(with interest, as appropriate). > > > >The situation could have arisen in practice. Perhaps the group had no > >interest in paying dividends > >for some years but was profitable, with plenty of distributable profits > >in the subsidiary but not higher up. ACT capacity should be maximised > >when dividends are then paid. > > > >If the election was a sham, why is it that in 247(3) a partial election is > >possible? > >RS > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 22:33:13 +0800 Reply-To: Chin Chin CHONG Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Chin Chin CHONG Subject: Chin Chin CHONG/AGC/SINGOV is out of office MIME-Version: 1.0 Content-type: text/plain; charset=US-ASCII I will be out of the office starting 11/05/2005 and will not return until 03/06/2005. I will respond to your message when I return. ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 17:10:14 +0100 Reply-To: Charles Mitchell Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Charles Mitchell Subject: Re: In-Reply-To: <20050516141412.7F39313255@webmail221.herald.ox.ac.uk> MIME-Version: 1.0 Content-Type: text/plain; charset=ISO-8859-1 Content-Transfer-Encoding: 8bit OK I understand what you mean by distinguishing 'real' and 'sham' elections now. But Monica's point still stands that the source of the DMG difficulty is that the statutory scheme imposed liability and then required the taxpayer to take positive steps to bring itself within an exception in order to avoid paying the tax. Her further point also stands that this general approach is replicated in many other tax statutes and that it would be undesirable to let the Revenue escape restitutionary liability across the board wherever tax liability is incurred on a 'liable until proved innocent' basis. This seems to me to be true whether or not the taxpayers in each of these situations could have had 'real' reasons for not making an election to escape liability. C Quoting Robert Stevens : > I am arguing that there may be good commercial reasons for choosing not to > elect to defer to pay Advanced Corporation Tax under section 247 of the > Income and Corporation Taxes Act 1988. This is because of the ability to set > of ACT against Corporation Tax contained in section 239. > The election is therefore "real" in the sense that a group may sensibly > choose not to defer. Therefore I don't agree with Monica that "the Revenue > chose to use a mechanism for such an exemption that allowed them to collect > informaiton earlier." That is not the reason why the ability to elect is in > the legislation. See also the ability to make a partial election. > > DMG never elected. They were unlawfully denied the choice to elect but that > does not mean they should be deemed to have done so. Any such deeming would > be fictional. The money was due. A claim for restitution should have failed. > A better route is to say that there was a claim in tort for breach of Art 52 > of the EC treaty )now Art 43): see R v Secretary of State for Transport, ex > p. Factortame (no 7) [2001] 1 WLR 942. > RS > > In message <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> Charles > Mitchell writes: > > I'm afraid that I don't understand the distinction which Robert makes > > between 'real' and 'sham' elections, nor why it should undermine Monica's > > point. Can you please clarify, Robert? > > > > Charles > > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 17:40:37 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Comments: To: Charles Mitchell In-Reply-To: <1116259814.4288c5e643e29@impmail.kcl.ac.uk> Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 So, on your view what would have been the approach if a UK company with a UK parent had failed to read section 247 correctly and thought that it could not elect to defer? It pays and then, realising its mistake, subsequently seeks restitution. Are you really arguing that the company can argue "If I had not mistakenly read the statute I would have elected to defer, therefore make restitution to me"? Although the money is mistakenly paid, it was due. Tough. If denying the election is a wrong, it is actionable. If denying the election is not a wrong: tough. I see no ground of public policy for invalidating tax statutes drafted in the form of section 247, unless they are invalidated under some EU law or (implausibly) that they offend the Human Rights Act in some way. This is just a matter for Parliament. The IRC are not always the baddies. RS In message <1116259814.4288c5e643e29@impmail.kcl.ac.uk> Charles Mitchell writes: > OK I understand what you mean by distinguishing 'real' and 'sham' elections now. > But Monica's point still stands that the source of the DMG difficulty is that > the statutory scheme imposed liability and then required the taxpayer to take > positive steps to bring itself within an exception in order to avoid paying the > tax. Her further point also stands that this general approach is replicated in > many other tax statutes and that it would be undesirable to let the Revenue > escape restitutionary liability across the board wherever tax liability is > incurred on a 'liable until proved innocent' basis. This seems to me to be > true whether or not the taxpayers in each of these situations could have had > 'real' reasons for not making an election to escape liability. > > C > > Quoting Robert Stevens : > > > I am arguing that there may be good commercial reasons for choosing not to > > elect to defer to pay Advanced Corporation Tax under section 247 of the > > Income and Corporation Taxes Act 1988. This is because of the ability to set > > of ACT against Corporation Tax contained in section 239. > > The election is therefore "real" in the sense that a group may sensibly > > choose not to defer. Therefore I don't agree with Monica that "the Revenue > > chose to use a mechanism for such an exemption that allowed them to collect > > informaiton earlier." That is not the reason why the ability to elect is in > > the legislation. See also the ability to make a partial election. > > > > DMG never elected. They were unlawfully denied the choice to elect but that > > does not mean they should be deemed to have done so. Any such deeming would > > be fictional. The money was due. A claim for restitution should have failed. > > A better route is to say that there was a claim in tort for breach of Art 52 > > of the EC treaty )now Art 43): see R v Secretary of State for Transport, ex > > p. Factortame (no 7) [2001] 1 WLR 942. > > RS > > > > In message <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> Charles > > Mitchell writes: > > > I'm afraid that I don't understand the distinction which Robert makes > > > between 'real' and 'sham' elections, nor why it should undermine Monica's > > > point. Can you please clarify, Robert? > > > > > > Charles > > > > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 18:01:36 +0100 Reply-To: monica.chowdry@KCL.AC.UK Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Monica Chowdry Subject: Re: Comments: To: Robert Stevens In-Reply-To: <20050516164037.C0CB8226D6@webmail219.herald.ox.ac.uk> MIME-Version: 1.0 Content-Type: Text/Plain; charset="us-ascii" I agree that situation is somewhat different in someone does not arrange their affairs properly when there was the opportunity to do so - in this case my response would (and should) also be tough. However, the situation is somewhat different where the UK law would have denied you the relief if you had organised your affairs on the basis of illegitimate legislation - it is rather difficult for the taxpayer to prove it would have claimed the relief had it been able to, because the law specifically said such a claim would be denied. Denying the election would have been wrong - an election was not made but only because (and we have to say "only because," otherwise you are asking the claimant to prove something that is near impossible, although the claimant in DMG did manage to establish this to Park's satisfaction in the HC) the law would have denied it (wrongly). I think it must be superficial to look at the transaction only on the "it was due" basis in this particular situtation. I agree that legislation drafted like s247 is not always invalid and should not always be invalidated, and also that the IR are not always the bad guys! However, such drafting should not prevent a claim that would otherwise have been available, as it could be used artificially and this would provide an incentive to do so (or at least to draft more legislation in this way). Best Monica On Mon, 16 May 2005 17:40:37 +0100 Robert Stevens wrote: > So, on your view what would have been the approach if a UK company with a UK parent had failed to read section 247 correctly and thought that it could not elect to defer? It pays and then, realising its mistake, subsequently seeks restitution. Are you really arguing that the company can argue "If I had not mistakenly read the statute I would have elected to defer, therefore make restitution to me"? > Although the money is mistakenly paid, it was due. Tough. > > If denying the election is a wrong, it is actionable. > If denying the election is not a wrong: tough. > > I see no ground of public policy for invalidating tax statutes drafted in the form of section 247, unless they are invalidated under some EU law or (implausibly) that they offend the Human Rights Act in some way. This is just a matter for Parliament. > The IRC are not always the baddies. > RS > In message <1116259814.4288c5e643e29@impmail.kcl.ac.uk> Charles Mitchell writes: > > OK I understand what you mean by distinguishing 'real' and 'sham' elections now. > > But Monica's point still stands that the source of the DMG difficulty is that > > the statutory scheme imposed liability and then required the taxpayer to take > > positive steps to bring itself within an exception in order to avoid paying the > > tax. Her further point also stands that this general approach is replicated in > > many other tax statutes and that it would be undesirable to let the Revenue > > escape restitutionary liability across the board wherever tax liability is > > incurred on a 'liable until proved innocent' basis. This seems to me to be > > true whether or not the taxpayers in each of these situations could have had > > 'real' reasons for not making an election to escape liability. > > > > C > > > > Quoting Robert Stevens : > > > > > I am arguing that there may be good commercial reasons for choosing not to > > > elect to defer to pay Advanced Corporation Tax under section 247 of the > > > Income and Corporation Taxes Act 1988. This is because of the ability to set > > > of ACT against Corporation Tax contained in section 239. > > > The election is therefore "real" in the sense that a group may sensibly > > > choose not to defer. Therefore I don't agree with Monica that "the Revenue > > > chose to use a mechanism for such an exemption that allowed them to collect > > > informaiton earlier." That is not the reason why the ability to elect is in > > > the legislation. See also the ability to make a partial election. > > > > > > DMG never elected. They were unlawfully denied the choice to elect but that > > > does not mean they should be deemed to have done so. Any such deeming would > > > be fictional. The money was due. A claim for restitution should have failed. > > > A better route is to say that there was a claim in tort for breach of Art 52 > > > of the EC treaty )now Art 43): see R v Secretary of State for Transport, ex > > > p. Factortame (no 7) [2001] 1 WLR 942. > > > RS > > > > > > In message <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> Charles > > > Mitchell writes: > > > > I'm afraid that I don't understand the distinction which Robert makes > > > > between 'real' and 'sham' elections, nor why it should undermine Monica's > > > > point. Can you please clarify, Robert? > > > > > > > > Charles > > > > > > > > ____________________________________________________________________ > > This message was delivered through the Restitution Discussion Group, > > an international internet LISTSERV devoted to all aspects of the law > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > the body of a message to . To unsubscribe, > > send "signoff enrichment" to the same address. To make a posting to > > all group members, send to . The list is > > run by Lionel Smith of McGill University, . > > > > > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, . > ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 18:23:51 +0100 Reply-To: monica.chowdry@KCL.AC.UK Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Monica Chowdry Subject: Re: Comments: To: Robert Stevens Comments: cc: Robert Stevens In-Reply-To: MIME-Version: 1.0 Content-Type: Text/Plain; charset="us-ascii" Illegitimate due to the ECJ's judgment in Metallgesellschaft - the legislation is (was) incompatible with the Community rules on freedom of establishment. I do not think the ECJ went as far as to say that the whole tax (or rather ACT regime) was invalid - it didn't need to, but the denial of the election was in breach of Community law. Whether or not this makes the deinal tortious, I'll leave to a tort lawyer to answer! M On Mon, 16 May 2005 18:18:16 +0100 Robert Stevens wrote: > The ambiguity here is in the phrase 'illegitimate legislation'. Illegitimate > why and how? What legal rule is it that the court is using to strike down > the legislation? What is the effect of this invalidation? Does it render the > entire tax invalid? Does it make the denial of the choice wrongful (i.e. > tortuous)? > I think I am going to need a more concrete example before being persuaded > that a case like DMG v IRC is not more appropriately characterized as a > claim in tort for compensation for loss. > R > > -----Original Message----- > From: monica.chowdry@kcl.ac.uk [mailto:monica.chowdry@kcl.ac.uk] > Sent: 16 May 2005 18:02 > To: Robert Stevens > Cc: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG] > > I agree that situation is somewhat different in someone does not > arrange their affairs properly when there was the opportunity to do so > - in this case my response would (and should) also be tough. > > However, the situation is somewhat different where the UK law would > have denied you the relief if you had organised your affairs on the > basis of illegitimate legislation - it is rather difficult for the > taxpayer to prove it would have claimed the relief had it been able to, > because the law specifically said such a claim would be denied. > Denying the election would have been wrong - an election was not made > but only because (and we have to say "only because," otherwise you are > asking the claimant to prove something that is near impossible, > although the claimant in DMG did manage to establish this to Park's > satisfaction in the HC) the law would have denied it (wrongly). I > think it must be superficial to look at the transaction only on the "it > was due" basis in this particular situtation. > > I agree that legislation drafted like s247 is not always invalid and > should not always be invalidated, and also that the IR are not always > the bad guys! However, such drafting should not prevent a claim that > would otherwise have been available, as it could be used artificially > and this would provide an incentive to do so (or at least to draft more > legislation in this way). > > Best > Monica > > On Mon, 16 May 2005 17:40:37 +0100 Robert Stevens > wrote: > > > So, on your view what would have been the approach if a UK company > with a UK parent had failed to read section 247 correctly and thought > that it could not elect to defer? It pays and then, realising its > mistake, subsequently seeks restitution. Are you really arguing that > the company can argue "If I had not mistakenly read the statute I would > have elected to defer, therefore make restitution to me"? > > Although the money is mistakenly paid, it was due. Tough. > > > > If denying the election is a wrong, it is actionable. > > If denying the election is not a wrong: tough. > > > > I see no ground of public policy for invalidating tax statutes > drafted in the form of section 247, unless they are invalidated under > some EU law or (implausibly) that they offend the Human Rights Act in > some way. This is just a matter for Parliament. > > The IRC are not always the baddies. > > RS > > In message <1116259814.4288c5e643e29@impmail.kcl.ac.uk> Charles > Mitchell writes: > > > OK I understand what you mean by distinguishing 'real' and 'sham' > elections now. > > > But Monica's point still stands that the source of the DMG > difficulty is that > > > the statutory scheme imposed liability and then required the > taxpayer to take > > > positive steps to bring itself within an exception in order to > avoid paying the > > > tax. Her further point also stands that this general approach is > replicated in > > > many other tax statutes and that it would be undesirable to let the > Revenue > > > escape restitutionary liability across the board wherever tax > liability is > > > incurred on a 'liable until proved innocent' basis. This seems to > me to be > > > true whether or not the taxpayers in each of these situations could > have had > > > 'real' reasons for not making an election to escape liability. > > > > > > C > > > > > > Quoting Robert Stevens : > > > > > > > I am arguing that there may be good commercial reasons for > choosing not to > > > > elect to defer to pay Advanced Corporation Tax under section 247 > of the > > > > Income and Corporation Taxes Act 1988. This is because of the > ability to set > > > > of ACT against Corporation Tax contained in section 239. > > > > The election is therefore "real" in the sense that a group may > sensibly > > > > choose not to defer. Therefore I don't agree with Monica that > "the Revenue > > > > chose to use a mechanism for such an exemption that allowed them > to collect > > > > informaiton earlier." That is not the reason why the ability to > elect is in > > > > the legislation. See also the ability to make a partial election. > > > > > > > > DMG never elected. They were unlawfully denied the choice to > elect but that > > > > does not mean they should be deemed to have done so. Any such > deeming would > > > > be fictional. The money was due. A claim for restitution should > have failed. > > > > A better route is to say that there was a claim in tort for > breach of Art 52 > > > > of the EC treaty )now Art 43): see R v Secretary of State for > Transport, ex > > > > p. Factortame (no 7) [2001] 1 WLR 942. > > > > RS > > > > > > > > In message <5.1.0.14.2.20050516144606.012d34e8@pop1.kcl.ac.uk> > Charles > > > > Mitchell writes: > > > > > I'm afraid that I don't understand the distinction which Robert > makes > > > > > between 'real' and 'sham' elections, nor why it should > undermine Monica's > > > > > point. Can you please clarify, Robert? > > > > > > > > > > Charles > > > > > > > > > > > ____________________________________________________________________ > > > This message was delivered through the Restitution Discussion > Group, > > > an international internet LISTSERV devoted to all aspects of the > law > > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > > the body of a message to . To > unsubscribe, > > > send "signoff enrichment" to the same address. To make a posting to > > > all group members, send to . The list > is > > > run by Lionel Smith of McGill University, . > > > > > > > > > > ____________________________________________________________________ > > This message was delivered through the Restitution Discussion Group, > > an international internet LISTSERV devoted to all aspects of the law > > of unjust enrichment. To subscribe, send "subscribe enrichment" in > > the body of a message to . To unsubscribe, > > send "signoff enrichment" to the same address. To make a posting to > > all group members, send to . The list is > > run by Lionel Smith of McGill University, . > > > > ---------------------- > Monica Chowdry > Lecturer > School of Law > King's College London > Strand > London WC2R 2LS > Direct Line: 020 7848 1110 > monica.chowdry@kcl.ac.uk > > > ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Mon, 16 May 2005 23:07:08 +0200 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: IRC v DMG In-Reply-To: <20050516141412.7F39313255@webmail221.herald.ox.ac.uk> Mime-Version: 1.0 (Apple Message framework v622) Content-Type: multipart/alternative; boundary=Apple-Mail-2-531474830 --Apple-Mail-2-531474830 Content-Transfer-Encoding: 7bit Content-Type: text/plain; charset=US-ASCII; format=flowed At the risk of generating a few hundred more error messages ... I don't know much EU law but I see two ways of looking at it. Under the Canadian constitution, if money were due under valid provincial law, but not due under equally valid federal law, then we would say that the provincial law was inoperative (though valid) to the extent of the conflict, and the money was therefore not due; this is based on the idea that federal law is "paramount". That is what happened in Garland, for example. Even if we cannot face the possibility of saying that an Act of the Westminster Parliament is inoperative, it is not an invariable rule that an enrichment made pursuant to an obligation cannot be an unjust enrichment. If according to English law the tax was due, and it was paid, and it should not have been due according to EU law, and English law is required to yield to EU law in this field, then there can still be an unjust enrichment, at least according to EU law. It reminds me of the old case of a debtor who paid his debt due under a sealed bond but failed to recover the bond or get a sealed receipt; if the creditor sued on the bond, then at common law the debtor had to pay again, but he would get relief in equity. But either way it seems to me that the problem Robert identifies remains. The undue-ness depended on an election that was never made, even though, in violation of EU law, DMG never had a chance to make it. What is left is a tax due under English law but also due under EU law, unless EU law says that the consequence of unlawfully failing to offer the election to some taxpayers is that they shall be allowed to exercise it retroactively. If as Robert says it is a wrong for a state to legislate contrary to EU law, then you could perhaps reach a result like retroactive election via the application of the proposition, well known in many other contexts (Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 S.C.R. 3, Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities v. Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing through mixtures), that everything is factually presumed against a wrongdoer. The factual question being whether DMG would have exercised the election, had it been given a choice, could be answered yes on that view, since it was wrong not to give DMG the choice. Then with that established (with the aid of a rebuttable presumption) as a fact, the earlier-than-necessary payment can be said to have been made under a mistake of law that was only discovered at the time of Metallgesellschaft. The wrong would be essential to the claim in unjust enrichment, because I don't think the presumption works unless there is a real wrong, separate from the evidentiary difficulty which it resolves. But it would be essential not as a cause of action, but as helping to establish unjustness via the factual finding based on the presumption triggered by the wrong. To my mind this kind of presumption only descends into fiction if it is irrebuttable. As long as it is rebuttable, ie it is open to the Revenue to prove, if they can, that DMG would not have elected even if they had been given the opportunity, then there is no fiction but only a reversal of the burden of proof, for what I think is a good reason. In Canada it is not a wrong to legislate unconstitutionally, and Peel v Canada illustrates that one result of this is that a party can end up seriously out of pocket as a result of faulty legislation, but still be without any claim at all. Lionel --Apple-Mail-2-531474830 Content-Transfer-Encoding: 7bit Content-Type: text/enriched; charset=US-ASCII At the risk of generating a few hundred more error messages ... I don't know much EU law but I see two ways of looking at it. Under the Canadian constitution, if money were due under valid provincial law, but not due under equally valid federal law, then we would say that the provincial law was inoperative (though valid) to the extent of the conflict, and the money was therefore not due; this is based on the idea that federal law is "paramount". That is what happened in Garland, for example. Even if we cannot face the possibility of saying that an Act of the Westminster Parliament is inoperative, it is not an invariable rule that an enrichment made pursuant to an obligation cannot be an unjust enrichment. If according to English law the tax was due, and it was paid, and it should not have been due according to EU law, and English law is required to yield to EU law in this field, then there can still be an unjust enrichment, at least according to EU law. It reminds me of the old case of a debtor who paid his debt due under a sealed bond but failed to recover the bond or get a sealed receipt; if the creditor sued on the bond, then at common law the debtor had to pay again, but he would get relief in equity. But either way it seems to me that the problem Robert identifies remains. The undue-ness depended on an election that was never made, even though, in violation of EU law, DMG never had a chance to make it. What is left is a tax due under English law but also due under EU law, unless EU law says that the consequence of unlawfully failing to offer the election to some taxpayers is that they shall be allowed to exercise it retroactively. If as Robert says it is a wrong for a state to legislate contrary to EU law, then you could perhaps reach a result like retroactive election via the application of the proposition, well known in many other contexts (Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 S.C.R. 3, Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities v. Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing through mixtures), that everything is factually presumed against a wrongdoer. The factual question being whether DMG would have exercised the election, had it been given a choice, could be answered yes on that view, since it was wrong not to give DMG the choice. Then with that established (with the aid of a rebuttable presumption) as a fact, the earlier-than-necessary payment can be said to have been made under a mistake of law that was only discovered at the time of Metallgesellschaft. The wrong would be essential to the claim in unjust enrichment, because I don't think the presumption works unless there is a real wrong, separate from the evidentiary difficulty which it resolves. But it would be essential not as a cause of action, but as helping to establish unjustness via the factual finding based on the presumption triggered by the wrong. To my mind this kind of presumption only descends into fiction if it is irrebuttable. As long as it is rebuttable, ie it is open to the Revenue to prove, if they can, that DMG would not have elected even if they had been given the opportunity, then there is no fiction but only a reversal of the burden of proof, for what I think is a good reason. In Canada it is not a wrong to legislate unconstitutionally, and Peel v Canada illustrates that one result of this is that a party can end up seriously out of pocket as a result of faulty legislation, but still be without any claim at all. Lionel --Apple-Mail-2-531474830-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Tue, 17 May 2005 09:02:58 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: IRC v DMG Comments: To: Lionel Smith In-Reply-To: <89f0028ff3a3bef6b1181a5ae559c19c@mcgill.ca> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_000F_01C55ABF.38CF24C0" This is a multi-part message in MIME format. ------=_NextPart_000_000F_01C55ABF.38CF24C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I don=92t think that there is any problem with a claim based upon the = wrong in DMG v IRC. There is a tort as a result of the infringement of Art 52 of = the Rome Treaty, and it is clear that that is actionable. The problem for = the claimants in DMG v IRC was that this would not bring them within the advantageous limitation rule applying to claims for relief from the consequences of a mistake. =20 For me, however, to get a claim in unjust enrichment off the ground it = is necessary to set aside the obligation. As DMG never elected the only way = to bring a claim in unjust enrichment is to deem them to have done so. = Many jurisdictions adopt a =91fiction of fulfillment=92 where a claimant is wrongfully prevented from fulfilling a condition precedent to liability. = So, in the Scottish decision of Mackay v Dick an excavating machine was sold = on condition that it could excavate at a specified rate on the = defendant=92s property. The buyer refused to provide the opportunity for the = excavation rate to be tested. The buyer was held liable for the price. The = buyer=92s wrongful refusal to allow the condition precedent to be fulfilled led = the court to deem it to be fulfilled. Similarly in the US case of Foreman v Tauber a man promised his fianc=E9e $20,000 if she married and survived = him. Some years after the marriage he shot and killed his wife. His estate = was held liable to the wife as it was his deliberate and wrongful act which = had prevented fulfillment of the condition. =20 The doctrine of fictional fulfillment has been rejected in England = (Little v. Courage Ltd. (1995) 70 P. & C.R. 469 at p. 474 per Millett L.J). The alternative is to hold the defendant liable in damages for the wrong committed in preventing the fulfillment of the condition eg Bournemouth = v Manchester United The Times 22 may 1980. It seems to me that this is = what should have been done in DMG v IRC. RS =20 _____ =20 From: Enrichment - Restitution & Unjust Enrichment Legal Issues [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Lionel Smith Sent: 16 May 2005 22:07 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG] IRC v DMG =20 At the risk of generating a few hundred more error messages ... I don't know much EU law but I see two ways of looking at it. Under the Canadian constitution, if money were due under valid provincial law, but = not due under equally valid federal law, then we would say that the = provincial law was inoperative (though valid) to the extent of the conflict, and = the money was therefore not due; this is based on the idea that federal law = is "paramount". That is what happened in Garland, for example. Even if we cannot face the possibility of saying that an Act of the Westminster Parliament is inoperative, it is not an invariable rule that = an enrichment made pursuant to an obligation cannot be an unjust = enrichment. If according to English law the tax was due, and it was paid, and it should = not have been due according to EU law, and English law is required to yield = to EU law in this field, then there can still be an unjust enrichment, at = least according to EU law. It reminds me of the old case of a debtor who paid = his debt due under a sealed bond but failed to recover the bond or get a = sealed receipt; if the creditor sued on the bond, then at common law the debtor = had to pay again, but he would get relief in equity. But either way it seems to me that the problem Robert identifies = remains. The undue-ness depended on an election that was never made, even though, = in violation of EU law, DMG never had a chance to make it. What is left is = a tax due under English law but also due under EU law, unless EU law says = that the consequence of unlawfully failing to offer the election to some taxpayers is that they shall be allowed to exercise it retroactively. If as Robert says it is a wrong for a state to legislate contrary to EU = law, then you could perhaps reach a result like retroactive election via the application of the proposition, well known in many other contexts = (Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 = S.C.R. 3, Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities = v. Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing = through mixtures), that everything is factually presumed against a wrongdoer. = The factual question being whether DMG would have exercised the election, = had it been given a choice, could be answered yes on that view, since it was = wrong not to give DMG the choice. Then with that established (with the aid of = a rebuttable presumption) as a fact, the earlier-than-necessary payment = can be said to have been made under a mistake of law that was only discovered = at the time of Metallgesellschaft. The wrong would be essential to the = claim in unjust enrichment, because I don't think the presumption works unless = there is a real wrong, separate from the evidentiary difficulty which it = resolves. But it would be essential not as a cause of action, but as helping to establish unjustness via the factual finding based on the presumption triggered by the wrong. To my mind this kind of presumption only descends into fiction if it is irrebuttable. As long as it is rebuttable, ie it is open to the Revenue = to prove, if they can, that DMG would not have elected even if they had = been given the opportunity, then there is no fiction but only a reversal of = the burden of proof, for what I think is a good reason. In Canada it is not a wrong to legislate unconstitutionally, and Peel v Canada illustrates that one result of this is that a party can end up seriously out of pocket as a result of faulty legislation, but still be without any claim at all. Lionel ------=_NextPart_000_000F_01C55ABF.38CF24C0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

I don’t think that there is = any problem with a claim based upon the wrong in DMG v IRC. There is a tort = as a result of the infringement of Art 52 of the Rome Treaty, and it is clear = that that is actionable. The problem for the claimants in DMG v IRC was that = this would not bring them within the advantageous limitation rule applying to = claims for relief from the consequences of a = mistake.

 

For me, however, to get a claim in = unjust enrichment off the ground it is necessary to set aside the obligation. = As DMG never elected the only way to bring a claim in unjust enrichment is to = deem them to have done so.=A0 Many jurisdictions adopt a ‘fiction of = fulfillment’ where a claimant is wrongfully prevented from fulfilling a condition = precedent to liability. So, in the Scottish decision of Mackay v Dick = an excavating machine was = sold on condition that it could excavate at a specified rate on the = defendant’s property. The buyer refused to provide the opportunity for the = excavation rate to be tested. The buyer was held liable for the price. The buyer’s wrongful refusal to allow the condition precedent to be fulfilled led = the court to deem it to be fulfilled. Similarly in the US case of Foreman v = Tauber a man promised his fianc=E9e $20,000 if she married and survived him. Some = years after the marriage he shot and killed his wife. His estate was held liable to = the wife as it was his deliberate and wrongful act which had prevented = fulfillment of the condition.

 

The doctrine of fictional fulfillment has been = rejected in England = (Little v. Courage Ltd. (1995) 70 P. & C.R. 469 at p. 474 per Millett L.J). = =A0The alternative is to hold the defendant liable in damages for the wrong = committed in preventing the fulfillment of the condition eg Bournemouth v Manchester United The Times 22 may 1980. It seems to me that this is = what should have been done in DMG v IRC.

RS

 

From: = Enrichment - Restitution & Unjust Enrichment Legal Issues [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Lionel Smith
Sent: 16 May 2005 = 22:07
To: = ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG] IRC v = DMG

 

At the risk of generating a few hundred more error messages = ...

I don't know much EU law but I see two ways of looking at it. Under the Canadian constitution, if money were due under valid provincial law, but = not due under equally valid federal law, then we would say that the = provincial law was inoperative (though valid) to the extent of the conflict, and the = money was therefore not due; this is based on the idea that federal law is "paramount". That is what happened in Garland, for example.

Even if we cannot face the possibility of saying that an Act of the = Westminster Parliament is inoperative, it is not an invariable rule that an = enrichment made pursuant to an obligation cannot be an unjust enrichment. If according = to English law the tax was due, and it was paid, and it should not have = been due according to EU law, and English law is required to yield to EU law in = this field, then there can still be an unjust enrichment, at least according = to EU law. It reminds me of the old case of a debtor who paid his debt due = under a sealed bond but failed to recover the bond or get a sealed receipt; if = the creditor sued on the bond, then at common law the debtor had to pay = again, but he would get relief in equity.

But either way it seems to me that the problem Robert identifies = remains. The undue-ness depended on an election that was never made, even though, in violation of EU law, DMG never had a chance to make it. What is left is = a tax due under English law but also due under EU law, unless EU law says that = the consequence of unlawfully failing to offer the election to some taxpayers is that = they shall be allowed to exercise it retroactively.

If as Robert says it is a wrong for a state to legislate contrary to EU = law, then you could perhaps reach a result like retroactive election via the application of the proposition, well known in many other contexts = (Rainbow Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 = S.C.R. 3, Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities = v. Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing through = mixtures), that everything is factually presumed against a wrongdoer. The factual = question being whether DMG would have exercised the election, had it been given a choice, could be answered yes on that view, since it was wrong not to = give DMG the choice. Then with that established (with the aid of a rebuttable presumption) as a fact, the earlier-than-necessary payment can be said = to have been made under a mistake of law that was only discovered at the time of Metallgesellschaft. The wrong would be essential to the claim in unjust enrichment, because I don't think the presumption works unless there is = a real wrong, separate from the evidentiary difficulty which it resolves. But = it would be essential not as a cause of action, but as helping to establish = unjustness via the factual finding based on the presumption triggered by the = wrong.

To my mind this kind of presumption only descends into fiction if it is irrebuttable. As long as it is rebuttable, ie it is open to the Revenue = to prove, if they can, that DMG would not have elected even if they had = been given the opportunity, then there is no fiction but only a reversal of the = burden of proof, for what I think is a good reason.

In Canada it is not = a wrong to legislate unconstitutionally, and Peel v Canada illustrates that = one result of this is that a party can end up seriously out of pocket as a result = of faulty legislation, but still be without any claim at all.

Lionel

------=_NextPart_000_000F_01C55ABF.38CF24C0-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Tue, 17 May 2005 09:46:52 +0100 Reply-To: monica.chowdry@KCL.AC.UK Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Monica Chowdry Subject: Re: IRC v DMG Comments: To: Robert Stevens In-Reply-To: MIME-Version: 1.0 Content-Type: Text/Plain; CHARSET="ISO-8859-1" Content-Transfer-Encoding: quoted-printable Two points: First -=20 >What is left is a > tax due under English law but also due under EU law, unless EU law says t= hat > the consequence of unlawfully failing to offer the election to some > taxpayers is that they shall be allowed to exercise it retroactively. I think this is exactly what the ECJ is saying. In Metallgesellschaft, the ECJ was asked the specific question whether=20 or not a claim could be denied on the basis that no election was made=20 (see paras 98-107) The ECJ held that the UK could not reject a claim for payment of the=20 loss of the use of money on the sole ground that an election was not=20 made. Essentially, this is on the basis that it is unreasonable to=20 expect taxpayers to have made a claim when they would have had such a claim rejected. Second -=20 support for allowing a restitutionary claim comes from both the ECJ and the AG's opinion. Whilst the ECJ said that it is open for the UK to=20 decide whether to allow a claim for damages or restitution, they did=20 say that in deciding which cause of action to allow, the rules musn't=20 make it practically impossible or excessivley difficult to exercise=20 Community rights - there is at least an argument (although I haven't=20 quite made up my mind on this yet) that by not allowing a compensation=20 claim due to the limitation period, where there seems to be an option=20 of allowing a claim in unjust enrichment due to a longer limitation=20 period, the excercise of community rights is made excessively difficult (particlarly bearing in mind the fact that the ECJ seems to say that=20 retrospective claims should be allowed as described above, yet for the=20 case to come to the ECJ and to get judgment takes a considerable period of time) Stronger support comes from the AGs opinion - see in particular paras=20 51-52 He rejects the submission that a restitutionary claim should be denied=20 on the basis that no election was made. Best Monica On Tue, 17 May 2005 09:02:58 +0100 Robert Stevens=20 wrote: > I dont think that there is any problem with = a claim based upon the wrong in > DMG v IRC. There is a tort as a result of the infringement of Art 52 of t= he > Rome Treaty, and it is clear that that is actionable. The problem for the > claimants in DMG v IRC was that this would not bring them within the > advantageous limitation rule applying to claims for relief from the > consequences of a mistake. >=20 > =20 >=20 > For me, however, to get a claim in unjust enrichment off the ground it is > necessary to set aside the obligation. As DMG never elected the only way = to > bring a claim in unjust enrichment is to deem them to have done so. Many > jurisdictions adopt a fiction of fulfillment<= RIGHT SINGLE QUOTATION MARK> where a claimant is > wrongfully prevented from fulfilling a condition precedent to liability. = So, > in the Scottish decision of Mackay v Dick an excavating machine was sold on > condition that it could excavate at a specified rate on the defendants > property. The buyer refused to provide the opportunity for the excavation > rate to be tested. The buyer was held liable for the price. The buyers > wrongful refusal to allow the condition precedent to be fulfilled led the > court to deem it to be fulfilled. Similarly in the US case of Foreman v > Tauber a man promised his fianc=E9e $20,000 if she married and survived h= im. > Some years after the marriage he shot and killed his wife. His estate was > held liable to the wife as it was his deliberate and wrongful act which h= ad > prevented fulfillment of the condition. >=20 > =20 >=20 > The doctrine of fictional fulfillment has been rejected in England (Littl= e > v. Courage Ltd. (1995) 70 P. & C.R. 469 at p. 474 per Millett L.J). The > alternative is to hold the defendant liable in damages for the wrong > committed in preventing the fulfillment of the condition eg Bournemouth v > Manchester United The Times 22 may 1980. It seems to me that this is what > should have been done in DMG v IRC. >=20 > RS >=20 > =20 >=20 > _____ =20 >=20 > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Lionel Smith > Sent: 16 May 2005 22:07 > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: [RDG] IRC v DMG >=20 > =20 >=20 > At the risk of generating a few hundred more error messages ... >=20 > I don't know much EU law but I see two ways of looking at it. Under the > Canadian constitution, if money were due under valid provincial law, but = not > due under equally valid federal law, then we would say that the provincia= l > law was inoperative (though valid) to the extent of the conflict, and the > money was therefore not due; this is based on the idea that federal law i= s > "paramount". That is what happened in Garland, for example. >=20 > Even if we cannot face the possibility of saying that an Act of the > Westminster Parliament is inoperative, it is not an invariable rule that = an > enrichment made pursuant to an obligation cannot be an unjust enrichment.= If > according to English law the tax was due, and it was paid, and it should = not > have been due according to EU law, and English law is required to yield t= o > EU law in this field, then there can still be an unjust enrichment, at le= ast > according to EU law. It reminds me of the old case of a debtor who paid h= is > debt due under a sealed bond but failed to recover the bond or get a seal= ed > receipt; if the creditor sued on the bond, then at common law the debtor = had > to pay again, but he would get relief in equity. >=20 > But either way it seems to me that the problem Robert identifies remains. > The undue-ness depended on an election that was never made, even though, = in > violation of EU law, DMG never had a chance to make it. What is left is a > tax due under English law but also due under EU law, unless EU law says that > the consequence of unlawfully failing to offer the election to some > taxpayers is that they shall be allowed to exercise it retroactively. >=20 > If as Robert says it is a wrong for a state to legislate contrary to EU l= aw, > then you could perhaps reach a result like retroactive election via the > application of the proposition, well known in many other contexts (Rainbo= w > Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 S.C.R.= 3, > Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities v. > Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing throu= gh > mixtures), that everything is factually presumed against a wrongdoer. The > factual question being whether DMG would have exercised the election, had= it > been given a choice, could be answered yes on that view, since it was wro= ng > not to give DMG the choice. Then with that established (with the aid of a > rebuttable presumption) as a fact, the earlier-than-necessary payment can= be > said to have been made under a mistake of law that was only discovered at > the time of Metallgesellschaft. The wrong would be essential to the claim= in > unjust enrichment, because I don't think the presumption works unless the= re > is a real wrong, separate from the evidentiary difficulty which it resolv= es. > But it would be essential not as a cause of action, but as helping to > establish unjustness via the factual finding based on the presumption > triggered by the wrong. >=20 > To my mind this kind of presumption only descends into fiction if it is > irrebuttable. As long as it is rebuttable, ie it is open to the Revenue t= o > prove, if they can, that DMG would not have elected even if they had been > given the opportunity, then there is no fiction but only a reversal of th= e > burden of proof, for what I think is a good reason. >=20 > In Canada it is not a wrong to legislate unconstitutionally, and Peel v > Canada illustrates that one result of this is that a party can end up > seriously out of pocket as a result of faulty legislation, but still be > without any claim at all. >=20 > Lionel >=20 ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ======================================================================= == Date: Tue, 17 May 2005 11:40:33 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: IRC v DMG Comments: To: monica.chowdry@KCL.AC.UK In-Reply-To: MIME-Version: 1.0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable The ECJ are neutral. Clearly the Advocat General thought the appropriate claim was for restitution. The Court was careful not to say this: they = leave it open to the domestic court to characterize the claim. Just so long as there is a claim, European law is complied with.=20 There is a claim: a claim in tort. One last example. A induces B to enter into a contract by deceit. B pays a substantial sum under the contract. If B does not want to rescind he cannot get back his money by way of = unjust enrichment but he can still claim for the loss caused by the deceit. Similarly, in DMG v IRC the presence of a valid obligation to pay = provides an insuperable hurdle for the claim in unjust enrichment but is = irrelevant to the claim in tort. R -----Original Message----- From: Enrichment - Restitution & Unjust Enrichment Legal Issues [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Monica Chowdry Sent: 17 May 2005 09:47 To: ENRICHMENT@LISTS.MCGILL.CA Subject: Re: [RDG] IRC v DMG Two points: First -=20 >What is left is a > tax due under English law but also due under EU law, unless EU law = says that > the consequence of unlawfully failing to offer the election to some > taxpayers is that they shall be allowed to exercise it retroactively. I think this is exactly what the ECJ is saying. In Metallgesellschaft, the ECJ was asked the specific question whether=20 or not a claim could be denied on the basis that no election was made=20 (see paras 98-107) The ECJ held that the UK could not reject a claim for payment of the=20 loss of the use of money on the sole ground that an election was not=20 made. Essentially, this is on the basis that it is unreasonable to=20 expect taxpayers to have made a claim when they would have had such a claim rejected. Second -=20 support for allowing a restitutionary claim comes from both the ECJ and the AG's opinion. Whilst the ECJ said that it is open for the UK to=20 decide whether to allow a claim for damages or restitution, they did=20 say that in deciding which cause of action to allow, the rules musn't=20 make it practically impossible or excessivley difficult to exercise=20 Community rights - there is at least an argument (although I haven't=20 quite made up my mind on this yet) that by not allowing a compensation=20 claim due to the limitation period, where there seems to be an option=20 of allowing a claim in unjust enrichment due to a longer limitation=20 period, the excercise of community rights is made excessively difficult (particlarly bearing in mind the fact that the ECJ seems to say that=20 retrospective claims should be allowed as described above, yet for the=20 case to come to the ECJ and to get judgment takes a considerable period of time) Stronger support comes from the AGs opinion - see in particular paras=20 51-52 He rejects the submission that a restitutionary claim should be denied=20 on the basis that no election was made. Best Monica On Tue, 17 May 2005 09:02:58 +0100 Robert Stevens=20 wrote: > I dont think that there is any problem = with a claim based upon the wrong in > DMG v IRC. There is a tort as a result of the infringement of Art 52 = of the > Rome Treaty, and it is clear that that is actionable. The problem for = the > claimants in DMG v IRC was that this would not bring them within the > advantageous limitation rule applying to claims for relief from the > consequences of a mistake. >=20 > =20 >=20 > For me, however, to get a claim in unjust enrichment off the ground it = is > necessary to set aside the obligation. As DMG never elected the only = way to > bring a claim in unjust enrichment is to deem them to have done so. = Many > jurisdictions adopt a fiction of fulfillment where a claimant is > wrongfully prevented from fulfilling a condition precedent to = liability. So, > in the Scottish decision of Mackay v Dick an excavating machine was = sold on > condition that it could excavate at a specified rate on the defendants > property. The buyer refused to provide the opportunity for the = excavation > rate to be tested. The buyer was held liable for the price. The buyers > wrongful refusal to allow the condition precedent to be fulfilled led = the > court to deem it to be fulfilled. Similarly in the US case of Foreman = v > Tauber a man promised his fianc=E9e $20,000 if she married and = survived him. > Some years after the marriage he shot and killed his wife. His estate = was > held liable to the wife as it was his deliberate and wrongful act = which had > prevented fulfillment of the condition. >=20 > =20 >=20 > The doctrine of fictional fulfillment has been rejected in England = (Little > v. Courage Ltd. (1995) 70 P. & C.R. 469 at p. 474 per Millett L.J). = The > alternative is to hold the defendant liable in damages for the wrong > committed in preventing the fulfillment of the condition eg = Bournemouth v > Manchester United The Times 22 may 1980. It seems to me that this is = what > should have been done in DMG v IRC. >=20 > RS >=20 > =20 >=20 > _____ =20 >=20 > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Lionel Smith > Sent: 16 May 2005 22:07 > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: [RDG] IRC v DMG >=20 > =20 >=20 > At the risk of generating a few hundred more error messages ... >=20 > I don't know much EU law but I see two ways of looking at it. Under = the > Canadian constitution, if money were due under valid provincial law, = but not > due under equally valid federal law, then we would say that the = provincial > law was inoperative (though valid) to the extent of the conflict, and = the > money was therefore not due; this is based on the idea that federal = law is > "paramount". That is what happened in Garland, for example. >=20 > Even if we cannot face the possibility of saying that an Act of the > Westminster Parliament is inoperative, it is not an invariable rule = that an > enrichment made pursuant to an obligation cannot be an unjust = enrichment. If > according to English law the tax was due, and it was paid, and it = should not > have been due according to EU law, and English law is required to = yield to > EU law in this field, then there can still be an unjust enrichment, at least > according to EU law. It reminds me of the old case of a debtor who = paid his > debt due under a sealed bond but failed to recover the bond or get a sealed > receipt; if the creditor sued on the bond, then at common law the = debtor had > to pay again, but he would get relief in equity. >=20 > But either way it seems to me that the problem Robert identifies = remains. > The undue-ness depended on an election that was never made, even = though, in > violation of EU law, DMG never had a chance to make it. What is left = is a > tax due under English law but also due under EU law, unless EU law = says that > the consequence of unlawfully failing to offer the election to some > taxpayers is that they shall be allowed to exercise it retroactively. >=20 > If as Robert says it is a wrong for a state to legislate contrary to = EU law, > then you could perhaps reach a result like retroactive election via = the > application of the proposition, well known in many other contexts = (Rainbow > Industrial Caterers Ltd. v. Canadian National Railway Co. [1991] 3 = S.C.R. 3, > Hodgkinson v. Simms [1994] 3 S.C.R. 377; cf Smith New Court Securities = v. > Scrimgeour Vickers [1996] UKHL 3; [1997] AC 254; the law of tracing through > mixtures), that everything is factually presumed against a wrongdoer. = The > factual question being whether DMG would have exercised the election, = had it > been given a choice, could be answered yes on that view, since it was wrong > not to give DMG the choice. Then with that established (with the aid = of a > rebuttable presumption) as a fact, the earlier-than-necessary payment = can be > said to have been made under a mistake of law that was only discovered = at > the time of Metallgesellschaft. The wrong would be essential to the = claim in > unjust enrichment, because I don't think the presumption works unless there > is a real wrong, separate from the evidentiary difficulty which it resolves. > But it would be essential not as a cause of action, but as helping to > establish unjustness via the factual finding based on the presumption > triggered by the wrong. >=20 > To my mind this kind of presumption only descends into fiction if it = is > irrebuttable. As long as it is rebuttable, ie it is open to the = Revenue to > prove, if they can, that DMG would not have elected even if they had = been > given the opportunity, then there is no fiction but only a reversal of = the > burden of proof, for what I think is a good reason. >=20 > In Canada it is not a wrong to legislate unconstitutionally, and Peel = v > Canada illustrates that one result of this is that a party can end up > seriously out of pocket as a result of faulty legislation, but still = be > without any claim at all. >=20 > Lionel >=20 ---------------------- Monica Chowdry Lecturer School of Law King's College London Strand London WC2R 2LS Direct Line: 020 7848 1110 monica.chowdry@kcl.ac.uk ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, . ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, .