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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Reed Personnel Services Plc v Revenue & Customs [2009] EWHC 2250 (Admin) (23 July 2009) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2009/2250.html Cite as: [2009] EWHC 2250 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		Thursday, 23rd July 2009

1. MR JUSTICE CHARLES: I have an application before me to transfer judicial review proceedings which are presently stayed in this court and have been stayed for some time.
2. The underlying issues relate to dispensations granted pursuant to section 65 of ITPA. The relevant periods are between 1998 and 2006. The underlying point relates to travel expenses paid by Reed (the tax payer) in respect of persons who have a contractual relationship with Reed, commonly referred to as "temps".
3. There is at the heart of the dispute an underlying dispute relating to the nature of the contractual relationship between Reed and those workers. The point is whether or not the effect of that contract is a job-by-job contract, so that each time the temp is at a particular place, work there is regarded as permanent or whether there is an overarching contract, so that each time they go to various places it is a temporary placement. It is common ground that that issue has knock on effects as to whether or not tax should be deducted or not.
4. There are other issues that exist. The judicial review, standing back from it, is essentially one based on legitimate expectation and/or abuse, in the sense it is used in these cases and there will be a need for an analysis of what was provided and the bases of the relevant decisions as to whether or not the Revenue knew or ought to have known certain matters when the dispensations were given.
5. There are two other points which, as I understand them are as follows. They are referred to as the "dispensation point" and "the alternative contention". The dispensation point starts with a point of statutory construction of section 65. The tax payer's argument is that, once dispensation is given and it remains in force, that is determinative of the position. There is an additional argument relating to that, concerning whether or not section 65 applies at all, and that turns on whether or not the relevant tax would be chargeable, as I understand it, under the listed provisions or under other taxing provisions, in particular, section 72.
6. Again, as I understand it, albeit that the initial points may be ones of statutory construction, there are then points of detail which may arise which could of themselves throw up issues of fact and a need to analyse what was said and/or what was done in respect of various communications, on the one hand between the Revenue and Reed and, on the other hand, between Reed and temporary workers.
7. It is therefore clear to me that a number of issues potentially arise as to how matters should be managed. They would include issues as to whether or not particular points should be stripped out and dealt with initially. Included amongst those are, for example, the Revenue's application for strike out of the section 65 dispensation point, which the first tier Tribunal are set to hear in September. Others could be the proper interpretation of the relevant contracts.
8. It seems to me that quite difficult case management decisions will have to be made, a background to which will be a consideration of the risk that preliminary points could be identified and argued but at the end of the litigation process would not produce a final result with the consequence that the parties would have to return to deal with other aspects of the dispute which involved factual disputes. There may be potential for running issues in tandem. There may be potential for the argument that you should set your factual base in place, so that the relevant appellant courts can determine all the issues against all the relevant factual findings. Those issues are wideranging and quite difficult issues.
9. With that introduction what is clear is that this court, ie the Administrative Court has no jurisdiction to deal with a number of aspects of the litigation that exists between the parties, namely the tax appeals. So, a judge sitting in this court is not in a position to take an overview of all the relevant issues and to determine what is the most sensible way to manage this litigation.
10. The only court system that could do that is the Tribunal system, newly introduced and introduced after the start of these various proceedings. Within that jurisdiction the upper Tribunal is given jurisdiction to hear judicial review claims and that is done by section 31A. This is not a case which falls within the mandatory provision of section 31A but gives this court power to transfer, when it is just and convenient so to do.
11. As I understand it, I can confess from discussions with Warren J this morning, at present, on a transfer, the judicial review aspect would actually go to the Administrative Appeals chamber and not the Finance and Tax Chamber, but that will change.
12. There are clearly difficulties within the new system as to whether or not in this case the tax appeals can be heard or would be heard anywhere other than in the first tier Tribunal, having regard to factual issues that arise in them and the need, under the rules, for consents from the parties and from the relevant Presidents.
13. The Revenue's stance is that as Reed did not raise points as to management on the last occasion the matter was before the Tax Tribunal and there is a hearing in the first tier Tribunal in September, which will deal with some preliminary points, it is at present premature to transfer the judicial review proceedings to the upper Tribunal. The reason for that, as I understand it, is that, after argument in September and argument within the Tribunal as to the procedure to be adopted there, it will then become clearer as to whether or not this court, armed with information coming from the Tribunal, should then transfer the judicial review proceedings.
14. I confess that I am wholly unconvinced by that analysis. The issue seems to me one purely of case management. The other points I should mention, and I am wholly unconvinced by are the rival contentions put forward in the papers as to which court will be more suitable to try the judicial review issues. That is essentially based on guesswork as to which judge they will get in which Tribunal and what would be their primary expertise. It seems to me that, in both this court and the upper Tribunal, the parties will get a judge who is perfectly competent to deal with both the tax issues and the public law issues.
15. Here I am dealing with what is the best way to make the relevant decisions as to how and when the relevant disputes between the parties should be decided. To my mind it is impossible for a judge of the Administrative Court to do that on a properly informed and jurisdictional basis because part of the factors are outwith his or her jurisdiction. That is not the case in the Tribunal system if it is looked at as a whole. There is clearly, as I understand it, ability, for example, for the President to sit in the first tier and to give overarching directions how best to deal with the issues that arise between the parties. It seems to me that as a matter of dispute management and case management it is important that, if it is possible, one judge is given all of the relevant issues to consider. To my mind, the only way that can be achieved is for there to be a transfer to the Tribunal system.
16. It seems to me therefore that I should transfer the proceedings so that, and I will wish to make this clear, the relevant judge or judges within that system can issue manage and case manage the relevant disputes. Within it seems to me their management the point can be considered, whether or not, if, for example, on investigation the Administrative Court can hear matters more quickly the matter should be transferred back to the Administrative Court. I do not regard that approach as a game or ping pong or putting the issue on a bacon slicer. Rather it puts all of the issues before one judge to make the relevant and sensible decisions as to management. Neither side should take this conclusion as a steer and I am quite sure a judge sitting in the Tribunal will not be at all be influenced by any inferred steer coming from this court. If they think it is not appropriate for the Tribunals to deal with some or all of the issues and it is more convenient for the Administrative Court to deal with some of them, I would expect those issues to come back. But it does seem to me that now everything should be in one place, at one time, so that management issues can be determined. Therefore I will transfer the proceedings. I will also transfer them on the basis that the transfer probably has the effect of lifting the stay but expressly on the basis that I invite the judge in the Tribunal to consider whether or not the judicial review proceedings should be stayed or whether or not they should be managed, or whether they should be active within the Tribunal system. It seems to me inevitable that if it is transferred back here, it is likely the stay will be reintroduced but that is a future issue.
17. So what I will simply do is transfer the present judicial review proceedings to the upper tier Tribunal, for the purpose of it and the Tribunal system as a whole, giving directions as to the best way to determine the wideranging dispute between the parties.
18. MR EWART: Thank you my Lord. The only other issue is the costs of this application. We ask for the costs of a successful application and there is a schedule. I am not sure you have been provided with it.
19. MR JUSTICE CHARLES: Not sure I have it -- I have it.
20. MR EWART: The costs incurred by the--
21. MR GAMMIE: My Lord, I understand that the schedule was only produced this morning. It is a total the costs claim of £40,000. So we would suggest that that is not suitable for summary assessment by you at the moment.
22. MR JUSTICE CHARLES: Right.
23. MR GAMMIE: My Lord, there is also the question as to whether the costs should be reserved to the upper Tribunal depending on what particular action the upper Tribunal takes following the success of this application to transfer it there.
24. MR EWART: I suggest this was an application to this court, which has been successful and was resisted by the Revenue. We ought to have our costs in the normal way. I do not think we have any objection to that, to an assessment, your Lordship.
25. MR JUSTICE CHARLES: That is right, you have only had it recently. You could make the payment on account, which again seems to me probably in the context of this dispute, I might as well have an assessment.
26. I think it is right the costs should follow the event. The reasoning I have given is one which I think withstands the point the upper Tribunal thinks I am wrong and sends it back again. Still the claimants have won on that reasoning and they should have their costs and I will direct they should be assessed.
27. Thank you very much.