Case No: C1/2013/3302
Neutral Citation Number: [2015] EWCA Civ 173
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
ADMINISTRATIVE COURT
Mr. Justice Sales
[2013] EWHC 3258 (Admin)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday 4th March 2015
Before :

LORD JUSTICE MOORE-BICK
Vice-President of the Court of Appeal, Civil Division
LORD JUSTICE TOMLINSON
and
SIR ROBIN JACOB
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Between :

	THE QUEEN
on the application of 
INGENIOUS MEDIA HOLDINGS PLC & Anr	
Claimants/
Appellants	
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	HER MAJESTY’S REVENUE & CUSTOMS 	Defendant/Respondent	
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(Transcript of the Handed Down Judgment of
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Mr. Hugh Tomlinson Q.C. and Miss Jessica Simor Q.C. (instructed by Olswang LLP) for the appellants
Mr. James Eadie Q.C. and Mr. David Pievsky (instructed by HMRC Solicitor’s Office) for the respondent

Hearing date: 29th January 2015
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Judgment
Sir Robin Jacob : 
1.	This is an appeal is from a judgment and order of 25th October 2013 of Sales J, [2013] EWHC 3258.  The appeal is by permission of the Judge.
The Facts
2.	The primary facts are not in dispute.   I summarise them here though the Judge sets them out in more detail.
3.	The first claimant, Ingenious Media Holdings Limited (“Ingenious”) and its subsidiaries conduct, inter alia, a business of promoting film investment schemes (“film schemes”) in the form of partnerships which are intended to allow participating taxpayers to take advantage of certain tax reliefs and exceptions.   Mr McKenna is the founder and CEO of Ingenious.
4.	I say “intended to allow” because HMRC says that all or most of these film schemes are ineffective and that the wealthy individuals taking part in them are not allowed the reliefs and exceptions claimed.   We are not in this case concerned with who is right:  that is a matter being pursued through the appropriate tax tribunals.   
5.	A great deal of potential tax is at stake – HMRC estimate that film schemes represent a £5 billion risk to revenue.  The claimants have been aware for some time before June 2012 of HMRC’s scepticism as to the validity of these schemes and that they were likely to be challenged as indeed they were later in the year.
6.	Tax avoidance schemes had been in the news a lot in early 2012 and two journalists on The Times, Mr Mostrous and Ms Schlesinger, had done a considerable amount of investigation of the subject.  In the spring of 2012 Mr Mostrous contacted HMRC’s press office to ask for a background briefing.  This ultimately resulted in a 75 minute meeting on 14th June 2012 between them and Mr Hartnett, then the Permanent Secretary for Tax.  Prior to the meeting The Times told HMRC that it had amassed a good deal of information about tax avoidance schemes which could be of value to HMRC.  It also made clear that one of the subjects to be discussed was film schemes.
7.	I should interpolate that “tax avoidance schemes” in the present context means special arrangements made by a taxpayer so as to minimise his or her tax liability.   There is no question or suggestion of dishonesty – that is called  tax evasion.  What HMRC contends is that some film schemes are ineffective and in particular that the schemes or most of them involving partnerships to finance film-making promoted by Mr McKenna via Ingenious are so.  That is hotly disputed and is currently the subject of substantial proceedings in the relevant tax tribunal. 
8.	The meeting was explicitly agreed to be “off the record,” a matter repeated several times by Mr Hartnett and acknowledged to be so by the journalists during the meeting as the transcript shows.   “Off the record” meant to Mr Hartnett that nothing said would be published.   The transcript appears to make it clear that that was the journalists’ understanding too – for instance at one point Mr Mostrous said of a remark by Mr Hartnett that it was “a shame to waste it off the record.”   
9.	It quickly became apparent that the journalists already knew of the claimants and their film schemes.   Having discussed another individual who promoted film schemes, Mr McKenna was discussed, but only after the journalists had first mentioned his name. The actual conversation went like this:
“Mr Hartnett:  …. we engage with people who promote tax avoidance because we want to stop them.   I’ve been involved with successive governments with film schemes from about 2004.  There’s another notable individual in the field who you haven’t mentioned but I’ve seen him too.
Ms Schlesinger:  Patrick McKenna?
Mr Hartnett:	Ah
Ms Schlesinger:	No?
Mr Hartnett:  There is only one other notable individual in the field.”
10.	Mr Hartnett told them he wished to recover the tax relief purportedly allowed by these schemes.  He told the journalists that HMRC estimated that film schemes represented a £5 billion risk for HMRC.
11.	Mr Hartnett, under what he thought was the protection of “off the record,” expressed his views about film schemes, including those of the claimants, in less temperate language than he would have used publicly.   What he said was this:
“Mr Mostrous:	With McKenna do you think he is enacting any active schemes or any schemes that could be used to deprive the Revenue of tax now?
Mr Hartnett:	I don’t know
Mr Mostrous:	He’s not on your radar?
Mr Hartnett:	Oh, he’s never left my radar.
Mr Mostrous:  What do you think of him because he presents a very different profile.
Mr Hartnett:	He’s an urbane man, he’s a former Deloitte partner, he’s a clever guy, he’s made a fortune, he’s a banker, but actually he’s a big risk for us to so we would like to recover lots of tax relief he’s generated for himself and for other people.  Are we winning?  I would say, beginning to.  I think we’ll clean up on film schemes over the next few years”
Mr Mostrous:	That applies to Mr McKenna as well as film schemes in general?
Mr Hartnett:  I think we’ll clean up on film schemes over the next few years.  You may end up laughing at that statement because maybe we’ll lose it in the courts, litigation’s a hell of a risk, but you won’t find anybody here at all, even the most pro-wealthy people, and I’m not sure we’ve got any, who thinks film schemes are anything other than scams for scumbags.”
12.	The Judge said (at [51]) that at no point did Mr Hartnett “pass to the journalists any information which Ingenious Media and Mr McKenna had provided to HMRC about their affairs.”  
13.	However, although this was not the main thrust of his argument, Mr Hugh Tomlinson QC for the claimants drew attention to the fact that Mr Hartnett did refer, albeit in general terms, to the fact that Mr McKenna had personally claimed tax relief via his film schemes.  He said this was information about Mr McKenna’s personal tax affairs.   Of this the Judge said:
“51	… that was information which was obvious in the context of Mr McKenna’s identity and involvement in film investment schemes.”
That is a conclusion which I think was open to the Judge given all the surrounding circumstances.  I cannot say that the Judge was wrong in that evaluation.   
14.	It follows that this appeal must be decided on what was the real, main and major point of Mr Hartnett’s discussion with the journalists so far as it related to Mr McKenna and Ingenious.  This was about their activities as promoters of film schemes, not their individual tax affairs.
15.	In apparent breach of the “off the record” understanding some (but not all) of what was said in the meeting was then published in a Times article on 21st June 2012 as coming from a “senior Revenue official”.  I say “apparent breach” because neither The Times’ nor the individual journalists’ side of the story, if any, is the subject of evidence in this case.   It is neither necessary nor appropriate to say more about this here.  What does matter is that Mr Hartnett clearly thought that what he said would not be published.  Whether or not, as the appellants contend, “off the record” means only that the source of the quotation cannot be named does not matter, though I have to say that that seems unlikely given what the journalists said during the interview.
16.	An example of what was said about Mr McKenna at the off the record meeting which was published is the passage I quoted above: 
“He’s never left my radar,  He’s an urbane man, he’s a former Deloitte partner, he’s a clever guy, he’s made a fortune, he’s a banker, but actually he’s a big risk for us to so we would like to recover lots of tax relief he’s generated for himself and for other people.  Are we winning?  I would say, beginning to.  I think we’ll clean up on film schemes over the next few years”
The further “scams for scumbags” passage was not in the published article and went no further than the journalists.  The complaint about that aspect of the interview has to be and is limited accordingly.
Causes of action not pursued
17.	One might have thought that the heart of the complaints made lie in the field of private rather than public law.  After all Mr Tomlinson described vividly Mr McKenna’s shock at finding himself one of the targets of a front page main story in The Times and that a senior HMRC official had discussed him and his company, Ingenious.   And one can envisage possible civil causes of action, for instance breach of confidence, breach of statutory duty and defamation.  In fact defamation proceedings were started, though they have now been abandoned.
18.	Mr James Eadie QC told us that HMRC had decided that there was no point in objecting to the form of the proceedings – that his clients considered that all the complaints could be met in these judicial review proceedings and that in any event there might be some matters which could only be dealt with in judicial review proceedings.   So better all in one go.
Complaints that are made and remedies sought
19.	The complaints are as follows:
(a)	That HMRC acted unlawfully – it breached s.18 of the Commissioners for Revenue and Customs Act 2005 (“the 2005 Act”) and, though this adds no more, committed an offence contrary to s.19.
(b)	That HMRC wrongly interfered with the appellants’ rights under Article 8 of the European Convention on Human Rights (“ECHR”). 
(c)	That HMRC breached Article 1 Protocol 1 (“A1P1”) to the ECHR.
20.	The relief sought by the Amended Statement of Fact and Grounds is as follows:
(a)	A declaration that the decision to make disclosure to The Times journalists of the claimants’ identities and tax affairs was unlawful;
(b)	A declaration that the decision to make the allegations in respect of Mr McKenna, in particular that Mr McKenna posed a risk to the revenue, was unlawful;
(c) 	A declaration that the giving of an off the record briefing to The Times journalists by Mr Hartnett was an unlawful interference with the claimants’ rights under Article 8 of the ECHR; and
(d)	Damages in relation to loss suffered by the claimants as a result of the Defendant’s breach of their rights under A1P1.   These are put at £20 million in the Grounds.
The complaints based on the 2005 Act
The Relevant Provisions
21.	These read so far as is material:
18  Confidentiality
 (1)   Revenue and Customs officials may not disclose information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs.
(2)   But subsection (1) does not apply to a disclosure -
(a)   which –
(i)   is made for the purposes of a function of the Revenue and Customs, and 
(ii) does not contravene any restriction imposed by the Commissioners …
19 Wrongful Disclosure
(1)     	A person commits an offence if he contravenes section 18(1) [or (2A)] or 20(9) by disclosing revenue and customs information relating to a person whose identity—
(a)     is specified in the disclosure, or
(b)     can be deduced from it.

(2)     	In subsection (1) “revenue and customs information relating to a person” means information about, acquired as a result of, or held in connection with the exercise of a function of the Revenue and Customs (within the meaning given by section 18(4)(c)) in respect of the person; but it does not include information about internal administrative arrangements of Her Majesty's Revenue and Customs (whether relating to Commissioners, officers or others).
(3)     	It is a defence for a person charged with an offence under this section of disclosing information to prove that he reasonably believed—
(a)       that the disclosure was lawful, or
(b)   	that the information had already and lawfully been made available to the public.
Interpretation
52.	In this Act –
(a)  ‘function’ means any power or duty (including a power or duty that is ancillary to another power or duty), and 
(b)  a reference to the functions of the Commissioners or of officers of Revenue and Customs is a reference to the functions conferred –
(i)   by virtue of the Act, or
(ii) by or by virtue of any enactment passed or made after the commencement of this Act.
What was the information disclosed?
22.	The essence of the disclosure was that HMRC did not accept that the appellants’ film schemes validly generated the tax reliefs claimed by their high earning participants and that HMRC was going to challenge their validity. It is important to appreciate that that was information of HMRC’s own creation, not information given to it by the taxpayers or by Mr McKenna or Ingenious. 
The Appellants’ arguments

23.	Mr Tomlinson’s arguments in  relation to s.18 can be summarised under three heads:
(a)	That the disclosures were not “in connection with a function” of HMRC at all;
(b)	That even if they were, they went further than was necessary or proportionate for that function and to the extent that they went further were not “in connection with” that function.
(c)	That Judge had applied the wrong standard of review and wrongly gave too much deference to HMRC’s decision to disclose what it did.
A preliminary concession by HMRC
24.	“Information held by the Revenue” obviously includes information actually provided by the taxpayer to it.   But Mr Eadie conceded that two other types of information were also included, namely information generated by HMRC itself (here the views of HMRC as to the viability of Ingenious’ film schemes) and information which was clearly in the public domain.   I accordingly proceed on the basis of the concession.
25.	The concession has a knock-on effect.  Accepting that the forbidden scope of disclosure is so wide, one would expect the exception provided by s.18(2) to be wide rather than narrow – for otherwise all sorts of harmless disclosures in the public interest might be caught.
The meaning of “in connection with a function” of HMRC
26.	This is a question of construction of s.18.  Is “a function of HMRC” limited to a direct connection between tax collecting in a specific case or cases (“the narrow view”) or can the function be more general – raising more tax revenue (“the wide view”)? 
27.	Mr Tomlinson contended for the narrow view, submitting that a vague “general benefit” is not enough.  He submitted that only the progression of a particular case or cases could amount to a function of HMRC.   HMRC is a tax-gatherer and the function is accordingly confined to actual tax-gathering in specific cases and nothing else.
28.	The definition of an HMRC “function” contained in section 52 of the Act does not of itself provide the answer to Mr. Tomlinson’s contention.   So the phrase must be construed simply in its context.  What would the reasonable reader (who for present purposes can be taken to be a reasonable citizen) think Parliament (itself assumed to be reasonable) meant by the words used?  
29.	 I think the answer is the wide view.   A factually correct disclosure not involving the private affairs of a taxpayer and which has the effect of raising the total tax revenue or reducing the effect of tax avoidance schemes which HMRC genuinely considers ineffective is a disclosure the citizen would expect HMRC to be free to make.   And any citizen who was actually contemplating investing in a scheme which the Revenue considered did not work would surely expect the Revenue to be able to publicise its concerns.  He or she might even feel aggrieved if the Revenue did not.   The citizen would see no reason to limit the timing of legitimate publication to cases only where the Revenue had actually taken formal steps to challenge the scheme: the citizen would expect the Revenue to be able to broadcast its concerns from at least the time the Revenue had formed the view that those concerns were serious.
30.	Moreover the Judge was surely correct in saying this:
“4. 	In general, it is legitimate for HMRC to seek to maintain good and co-operative relations with the press. The efficient and effective collection of tax which is due is a matter of obvious public interest and concern. Coverage in the press about such matters is vital as a way of informing public debate about them, which is strongly in the public interest in a well-functioning democracy. HMRC have limited resources to devote to the many aspects of their tax collection work, and it is legitimate and appropriate for them to seek to maintain relations with the press and through them with the public to inform public debate about the tax regime and the use of HMRC’s resources. It is also relevant to the exercise of HMRC’s functions to provide proper and accurate information to correct misapprehensions or captious criticism regarding the exercise of their functions (such as any misplaced suggestion that they had engaged in unduly lenient “cosy deals” with certain taxpayers), in order to maintain public confidence in the tax system. If such confidence were undermined, the efficient collection of taxes could be jeopardised, as disaffected taxpayers might withhold co-operation from the tax authorities.”
All these factors would suggest to the reasonable reader that the wide construction was what was intended by Parliament.   He or she could see no good reason for the narrow meaning and every good reason for the wide.
The legal significance of the HMRC Information Disclosure Guide (“IDG”)
31.	This was issued by HMRC mainly but not exclusively for the guidance of its officials.  Substantial parts are nonetheless available to the public.   However it is elementary that guides of this sort can have no binding effect on the proper construction of a statute.   The law is made by Parliament, not pamphlets.  Of course a guide by civil servants writing their interpretation of what the law means and how it would apply to particular cases, can in everyday practice be useful.  But it is not definitive.  It is like a commentary on a statute by an academic: it may be considered by a court as a view of what the statute may mean.  
32.	Such a Guide may even be useful as an aid in considering whether or not a government action was reasonable, should such a question arise.  It may also be relevant in considering what might, in circumstances where the question arises, amount to a legitimate expectation as to how a government department may act.  But such an expectation has its limits:  one cannot really have a legitimate expectation of the meaning of a statute from a pamphlet. 
33.	There is one other point to be made about the Guide.  It is clearly intended to be a workaday guide for HMRC staff.   As such it may well have been drafted so as to err on the side of caution.  There is perhaps an indication to this effect in that in several places the reader, if in doubt, is told to seek guidance from his or her line manager or a unit of HMRC called “Information Policy and Disclosure.”   And certainly that shows the document is not itself intended to be definitive.
The contents of the Guide
34.	The Guide is long, elaborate and rather repetitive.  Two parts are relevant here, IDG 40120 dealing with lawful disclosure generally and IDG40430 dealing with disclosure for the purposes of HMRC’s functions.  IDG40120 contains the following passages (I omit some irrelevant parts):
IDG 40120  Sharing information outside of HMRC: legal obligations: lawful disclosure under section 18 CRCA
Background
Your ability to disclose HMRC information to anyone is restricted by the Commissioners for Revenue and Customs Act 2005 (CRCA).  Only by acting in accordance with the provisions of CRCA are you using HMRC information in a lawful way.  Sharing information with anyone in a way that is not covered by the CRCA means you may be personally be liable to a criminal sanction.
What does the CRCA say about information sharing?
The CRCA sets out what use HMRC may make of its information and the specific circumstances when we may disclose that information
Section 18 of CRCA makes clear that you must not give (“disclose”) HMRC information to anyone, unless you have lawful authority to do so.  This includes Other Government Departments and their agencies, local authorities, the police or any other public bodies.
Information sharing lawfully permitted under CRCA
Disclosing information to persons outside HMRC is permitted in certain limited circumstances detailed below:
For the purposes of HMRC’s functions
Necessity and proportionality
Where a lawful method of disclosure is identified care must still be taken to ensure that any information disclosed via that method meets the tests of necessity and proportionality in the Human Rights Act and the Data Protection Act.  See IDG40140 and IDG 40160
Is verifying information that someone already holds a disclosure?
Yes.   Even though someone may already hold information, if they ask HMRC to verify whether that information is correct, HMRC is still making a disclosure that is protected by HMRC’s duty of confidentiality.  This means you should not verify information unless there is lawful authority for you to do so.
35.	IDG4030 reads:
IDG40430 – Sharing information outside of HMRC: disclosure for HMRC’s functions: disclosing customer information
HMRC may disclose customer information (i.e. information which identifies a HMRC customer, or allows the recipient to deduce information about the identity of a customer) where such a disclosure is necessary for the purpose of HMRC functions.
How can I determine whether a disclosure is “necessary” for HMRC’s functions?
Whether or not a disclosure is necessary can be a difficult judgement to make but the main consideration is whether making the disclosure will enable you to carry out the functions of the department. You should consider each disclosure on a case-by-case basis and if you are content that the disclosure is required to enable you to carry out your duties, then you can lawfully disclose. If in doubt seek guidance from Information Policy and Disclosure (see IDG80100).
Examples of necessary disclosure include:
-	passing HMRC debt details to the Official Receiver in bankruptcy work
-	providing the police with details of a forthcoming visit so they can assess the health and safety risk (see IDG40460),
-	making inquiries about a HMRC customer with a third party (see IDG30400)
-	carrying out distraint in a public place.
In these cases, the disclosure of identifiable personal details is directly necessary for the performance of HMRC’s functions.
What if there is more than one way to carry out HMRC’s function?
“Necessary” is not restricted solely to situations in which the only way to carry out a HMRC function is to make the disclosure. There can be situations where a number of ways forward may be available, some of which involve disclosure of customer information and some of which don’t.
For example, if by not making a disclosure HMRC were to be less effective in carrying out its own functions then the disclosure should be made. A situation like this might be where a tax enquiry could be concluded more quickly by revealing information obtained from a third party. We should not wait until forced to reveal this information, such as by an order in court proceedings if, by disclosing it earlier, the HMRC customer is more likely to recognise and agree to their true tax liability. An early disclosure is more resource efficient for both HMRC and the customer.
Similar examples may apply where HMRC is seeking to be more effective, i.e. HMRC could carry out its functions without the disclosure, but by making the disclosure, those functions are carried out more effectively.
Proportionality (see IDG40160 and IDG40140) is a particular consideration here too. Consider the infringement of the individual customer’s rights to privacy against the necessity of the disclosure. Is the infringement necessary and proportionate to the objective being sought? Seek advice from Information Policy and Disclosure if in doubt (IDG80100).
How to make a lawful disclosure of customer information
It will be lawful to disclose customer information provided that:
-	only the minimum level of information about the customer is disclosed to allow the function to be carried out, and
-	the making of the disclosure is necessary (as described above) for the exercise of HMRC’s functions.
Common situations where a disclosure of customer information would not be lawful
There are many situations where the function of HMRC can be carried out without making the disclosure, yet the disclosure would nonetheless bring broader benefits. An example here might be the provision of information about cash seizures to the police. Providing cash seizure information is not necessary for HMRC to carry out its functions, or to help progress particular cases, but it may help the wider fight against crime and so benefits would accrue to law enforcement (perhaps including HMRC) from the disclosure.
But for the disclosure of customer information this is not sufficient. There must be a more direct connection to HMRC’s functions. Such disclosures cannot be made for the purposes of HMRC’s functions, but often there will be another lawful method of disclosure such as a legal gateway (IDG40320) or public interest (IDG60000).
Particular difficulties can occur where the functions of HMRC and another person or government department are closely tied together. Distinguishing whether disclosure supports HMRC’s functions, the other person’s functions, or indeed the functions of both, is problematic. Where disclosures in such situations are contemplated, further guidance should be sought first (see IDG80100).”
36.	The Guide nowhere (in the passages we have been shown at least) actually specifically warns that the only definitive rules of law are in the statute.  Nor does it actually even set out all the words of the statute even though they are in reasonably short and simple English.  In particular I cannot find all of the text of s.18(1).  And although some of the statutory words are there, the reader is unable to tell which they are and which are the author’s commentary.
Necessity and Proportionality?
37.	Mr Tomlinson fastened on the Guide’s reference to “necessity and proportionality” used in several places.  He submitted that it was implicit in s.18 that any disclosure, if of a type permitted at all, must be confined to that which was necessary and proportionate.  If it did not satisfy that test then it went beyond what was permitted and was thus unlawful.
38.	Thus he submitted that the specific discussion of Mr McKenna’s and Ingenious’ film schemes (“big risk for us”, “never left my radar“) went beyond what was necessary or proportionate.  Mr Hartnett could have conveyed HMRC’s concern about film schemes in general without that discussion.   
39.	There is a sense of unreality here.  It seems clear that Mr McKenna and another individual were the two big promoters of film schemes (albeit their schemes were not exactly the same).  That The Times already knew.  It was in a position to publish their names, the names of their companies and that they were in a big way of business with potentially significant effects on tax collection.  If Mr Hartnett had just said HMRC was very concerned about film schemes and expected to be able to clean them up, without any specific mention of Mr McKenna and Ingenious, everyone at the meeting would still have taken it that HMRC must have had them at the forefront of their thinking.
40.	I have the same feeling of unreality concerning Mr Tomlinson’s submission about what Mr Hartnett should have said when the journalists mentioned Mr McKenna.  His submission (not in these words) is that the response should have been along the lines of “You may mention him but I cannot possibly comment.”   
41.	Things might well have been different if Mr McKenna and Ingenious had been but one of a number of providers of film schemes and there had been no good reason for picking on them rather than any of the others.  That might have amounted to something like unfair targeting and have been, viewed objectively, irrational.   
42.	Mr Eadie responded to Mr Tomlinson’s submission advancing the implicit necessity and proportionality test by observing that it was simply not in the statute and that it was not essential to imply it.  The correct test was simply one of rationality:  was the disclosure rationally considered by the person concerned to be “for the purposes of” an HMRC function?  If it was that is an end of the matter.
43.	Sales J accepted that submission, saying:
“39.	 … In my view there was a rational connection between the function of HMRC to collect tax in an efficient and cost-effective way and the disclosures made by Mr Hartnett in the course of the briefing, and his decision to make the limited revelations that he did was based on a judgment which fell well within the lawful parameters of section 18(2)(b).”
44.	He applied what he had said in Accenture Services v HMRC [2009] 857 at paragraphs [34-35]: 
	“Is it for the court to make the necessary evaluative judgments as primary decision-maker … or is the proper approach … for the court to treat HMRC as the primary decision-maker for making such evaluative judgments …, having regard to the evidence before them, and subject only to review by the court to ensure that their judgment was not an irrational one? In my judgment, the latter is the correct approach on an issue of this kind. HMRC are the body entrusted by Parliament with the role of administering the tax system, who have made the relevant decision …. They have experience and expertise in making evaluative judgments of the kind in question here.
45.	Mr Tomlinson submitted that was the wrong test for supervision by the courts of disclosures by HMRC.  He said the correct test required intensive judicial scrutiny, which itself involved considerations of necessity and proportionality and the effect on the reputation of the appellants and their property rights.  He submitted that the court was in as good a position to assess the position as HMRC itself.  
46.	To me that sounded like an invitation to the court – including the Court of Appeal – to review all the facts de novo as though it were the primary decision maker.  I do not accept that.   The Court is not a tax-gatherer.   It simply is not in a position to evaluate the likely effect of a disclosure on an HMRC function in the same way as an official concerned with the day to day operation of the system.   Nor do I consider that the Court of Appeal should give no deference to the judge below, though that is perhaps a point for another day.
47.	Accordingly I reject Mr Tomlinson’s main submissions.  I should mention three other points he raised.
48.	Firstly there was the point raised by way of a Supplementary Skeleton Argument.  It was based on s.94 of the Finance Act 2009 and paragraph 28 of Part IV of Schedule 38 to the Finance Act 2012.   By the first Parliament expressly empowered HMRC to disclose information about individuals who had deliberately defaulted on tax liabilities of £25,000 or over – “naming and shaming.”   By the second HMRC was empowered to disclose the names of tax agents found guilty of dishonest conduct.  In both cases the power is exercisable only after all routes of appeal are exhausted and the target has been given an opportunity of submitting why publication should not be made.
49.	It is obvious that neither of these provisions can be used to construe the earlier 2005 Act.   Mr Tomlinson’s use of the provisions was apparently more subtle – he said it showed how serious the s.18 obligation was, that even in cases of egregious conduct disclosure was only permitted under controlled conditions.
50.	I do not accept that submission.  In reality it is indeed inviting us to construe the Act by reference to later Acts.  It may well be that the 2005 Act would permit such disclosures even without those provisions – the law does not generally protect disclosure of iniquity.   The fact that Parliament set about making express provision for the egregious cases concerned is no guide to the meaning of general powers of the 2005 Act.
51.	Next Mr Tomlinson attacked a reason given by Mr Hartnett for having the meeting, namely that he wanted to discover whether The Times had any information which would be of value to HMRC.   He submitted that was not right because the transcript did not show any such discussions.  But Mr Eadie showed us a passage at the end in which Mr Hartnett asked “when am I getting all your secrets?” and there was an indication of an ongoing dialogue.   Doubtless the prospect of that died when, as HMRC saw it at least, the “off the record” undertaking was broken.  And in any event Mr Hartnett’s evidence was to the effect that that was one of the reasons he agreed to see the journalists, and was not challenged.
52.	Finally, Mr Tomlinson submitted that Mr Hartnett could not simultaneously have believed that the discussions were off the record and yet would be published so as to convey to the world HMRC’s views about tax avoidance.  Mr Eadie submitted by way of answer that there is no inconsistency.  If the reporters knew how seriously it was taken, their reporting of the subject was clearly likely to be more accurate.
The Article 8 Claim
53.	This claim – essentially about damage to the appellants’ reputation – is founded on Art. 8.  One might perhaps have thought that it would more naturally have been brought as a claim in defamation, but as I have said, such a claim was brought and then abandoned.  I am not really able to understand why.  Mr Tomlinson said it was because the complaint was limited to what was said to the journalists rather than what appeared in The Times.  In particular the “scams for scumbags” remark.  He said that given the limited audience the quantum of damages in defamation would inevitably have been limited.   Whilst true, the difficulty with that as an explanation is that no damages are sought in respect of the Art. 8 complaint at all.   But no matter, we have to consider Art. 8.
54.	Article 8 provides:
Right to respect for private and family life
(1) 	Everyone has the right to respect for his private and family life, his home and his correspondence.
(2)	There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
55.	Before the Judge two aspects of the “private life” aspect of Art. 8(1) were relied upon: Mr McKenna’s privacy interest in the maintenance of confidentiality of information held about him by HMRC and both claimants’ interest in their reputations.   
56.	The Judge accepted that Article 8(1) was engaged in respect of Mr McKenna’s case but went on to hold that the disclosure in relation to both aspects was justified by Article 8(2).  The Article 8(1) conclusion is not challenged so we only have to consider whether the Judge was right about Article 8(2).
57.	The Judge took into account particularly that the disclosures were to the very limited class of the journalists and that they were intended and expected to be limited to them and them alone.   He held (at [69]) that: 
“it could not be said that their disclosure would have “an inevitable direct effect on the applicant’s private life”. If the disclosures did not come into the public domain, the ability of the Claimants to form relationships with other persons (the important dimension of the concept of “private life” which is accorded protection by the case law in this area, such as Sidabras and Džiautas v. Lithuania, nos. 55480/00 and 59330/00, § 49, ECHR 2004-VIII, Mikolajova v Slovakia, application no. 4479/03, judgment of 18 January 2011) would not have been directly affected by them; and HMRC had good grounds for thinking that the disclosures would not come into the public domain. The disclosures involved no sufficient direct or grave interference with the Claimants’ private life interests as to infringe the requirement of the right of respect for private life.”
58.	I do not see any answer to this.  Mr Tomlinson pressed upon us particularly Mikolajova where there was a disclosure by police to an insurance company of information about an unproved allegation concerning the applicant’s behaviour, namely that she had beaten and wounded her husband.  He sought to draw a parallel with the limited extent of the disclosure in that case, to that in this.  But the quality and effect of the disclosure were quite different.  Disclosure to the insurance company would have the direct effect of giving rise to an inference of guilt notwithstanding the presumption of innocence and very likely an effect on insurability or the premium for it.  The limited disclosure here had no effect and was expected to be so by Mr Hartnett on the faith of the off the record assurance.
59.	Moreover there is in fact no evidence of any damage to reputation.  The journalists were already well aware of Mr McKenna, Ingenious and their film schemes. The colourful language used, in context, meant no more than that HMRC considered those schemes did not work and would be “cleaned up” to use Mr Hartnett’s words.
The A1P1 Claim
60.	AIP1 provides:
(1) Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
(2) The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
61.	Before us two points were in play:  firstly whether or not the first sentence of AIP1 was engaged at all and secondly if it was, whether or not the interference was justified.  Only the latter point was argued before the Judge.   He nonetheless expressed doubt about the first point although he did not decide it.    
62.	I turn to the first point.    The Statement of Grounds alleges at [55]:
“Self-evidently, this kind of comment causes concern giving rise to loss of confidence and investment. The consequences of the disclosure are difficult to ascertain but estimated to be no less than £20million”.
That in substance amounts to an allegation of loss of future custom.   Loss of custom, i.e. loss of taxpayers investing in the claimants’ film schemes is indeed just what one would expect.   The loss is a loss of future income and no more.   True it is that the “goodwill” of the company in the sense of the attractive force which brings in custom (per Lord Macnaghton in IRC v Muller [1901] AC 217 at p.223) is diminished, but it is only diminished by reason of anticipated loss of future income.  No other assets (if there are any of substance) of Ingenious were touched.   And there was no expropriation to the state of anything at all.
63.	It is well settled that such a mere loss of future income is not an interference with “possessions” within the meaning of A1P1.   In Denimark v UK [2000] 30 EHRR 133, the applicants had businesses involving the use of firearms.  The Government introduced legislation controlling such use even more strictly than the prior controls.   This affected the scale of the applicants’ businesses and thus their income.  The applicants contended that this amounted to an interference with their possessions.   The Strasbourg court held the claim so far as it related to loss of the value of future income inadmissible, saying (CD150]:
“The Court recalls its case law that goodwill may be an element in the valuation of a professional practice, but that future income is only a “possession” once it has been earned or an enforceable claim to it exists [citations omitted].  The Court considers the same must apply in the case of a business engaged in commerce.  In the present case, the applicants refer to the value of their businesses based upon the means of earning an income from those businesses as “goodwill”.   The Court considers that the applicants are complaining in substance of loss of future income in addition to loss of goodwill and a diminution in value of their assets.  It concludes that the element of the complaint which is based upon the diminution in value of the business assessed by reference to future income, and which amounts in effect to a claim for loss of future income, falls outside the scope of [A1P1].”
64.	This Court followed that approach in R (Malik) v Waltham Forest NHS Care Trust [2007] EWCA Civ 265, [2007] 1 WLR 2092.   A doctor was unlawfully suspended from a performers list by the trust.  His claim that there was an interference with his possessions contrary to A1P1 was rejected on the basis that future loss of income was not a “possession.”
65.	In particular Rix LJ, after citing this passage from Denimark, said at [59]:
“In this passage, the court seems to be saying that, for the purpose of distinguishing between an existing possession (viz. goodwill consisting in clientele) and a mere expectation of future income, a substantive rather than a formal test will be applied.  Thus there will be no interference with possessions within [A1P1] if the value of a business (including presumably, its goodwill) declines only in so far as loss of future income is anticipated.   The practical difficulties of this distinction did not have to be explored in that case.”
66.	Nor do those difficulties have to be explored in this case because it is clearly well over the loss of future income side of the line.   
67.	Auld LJ reviewed the Strasbourg and domestic cases in detail and concluded in [29] that: 
“mere prospective loss of future income cannot amount to a possession for the purpose [of A1P1].”
68.	The Judge was right to have doubts on this point which in itself is decisive on the A1P1 claim which fails and with it the claim for compensation.
69.	I turn to the second point on A1P1 which I can deal with briefly.  The Judge considered that it was legitimate for the State to inform the public about its attitude to film schemes including those of the claimants.   He said [76]:
.. the decision to seek to inform the public about that attitude in order to influence their behaviour, fell well within the wide margin of appreciation applicable to decisions of state authorities in the field of tax policy. These are matters of the kind in relation to which it is appropriate to apply the wide margin of appreciation which is generally applicable in relation to promulgation of rules or policies in contexts which call for broad social and economic judgments. There will only have been a violation of A1P1 if HMRC proceeded on the basis of a judgment in relation to action taken to promote a legitimate public interest which was “manifestly without reasonable foundation [citations omitted].”
70.	Mr Tomlinson did not challenge that summary of the authorities specifically.  He sought to distinguish things like government discouragement of smoking or drinking from the Ingenious film schemes because the latter had yet to be proved to be unacceptable through the tax tribunals.  He went so far as to contend that HMRC acted in a manner which was “arbitrary and unfair.”
71.	I reject that entirely.   It was entirely in the public interest that HMRC should let the public know its views about these schemes.  Most particularly any potential investor in them would very much want to know that HMRC considered that the schemes or some of them did not work. I should imagine that most if not all such individuals would want to know that before deciding to invest. It makes no difference as far as the public’s need to know is concerned that formal closure notices had yet to be issued.  
72.	During argument there was some discussion about how the A1P1 claim might proceed – in particular that it might be the sort of claim which the Administrative Court would direct should be heard on pleadings and evidence.  Such a procedure would have made sense if the claim got as far as establishing liability.  But for the reasons I have given it does not.
Conclusion
73.	For these reasons I would dismiss this appeal. 
Lord Justice Tomlinson :
74.	I agree.
Lord Justice Moore-Bick :
75.	I also agree.