Case No: CH/2002/APP/0738
Neutral citation number: [2003] EWHC (Ch) 781
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(REVENUE)
ON APPEAL FROM THE SPECIAL COMMISSIONERS
Royal Courts of Justice
Strand, London, WC2A 2LL

 Date: 11 April 2003

B e fore:

THE HONOURABLE MR JUSTICE LLOYD

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	REGINALD STANLEY ROWLAND	Appellant	
	and	 -	
	LOUISE BOYLE (HM INSPECTOR OF TAXES)	Respondent	

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John Higham Q.C. (instructed by Stephenson Harwood for the Appellant)
David Ewart (instructed by Solicitor for the Inland Revenue for the Respondent)

Hearing dates: 25 and 26 February 2003
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JUDGMENT

Mr Justice Lloyd:

1.	This is an appeal by Mr Reginald Stanley Rowland against the dismissal by Special Commissioners of his appeal against assessments to income tax which were issued on 4 September 2000 to reverse the effect of his having secured interest relief for the tax years 1988/9 through to 1992/3 inclusive. Because the assessments were made more than 6 years after the end of the years of assessment in question, they had to be based on making good to the Crown a loss of tax due to fraudulent or negligent conduct of the taxpayer: Taxes Management Act 1970 section 34(1) and section 36(1). The Special Commissioners found that Mr Rowland’s conduct had been fraudulent. Mr Rowland is a chartered accountant who had been in practice for many years, and even now, as I gather, is not fully retired from professional practice. His standing as a professional man renders the more grave the finding of dishonesty against him. That, quite apart from the fact that a substantial amount of tax is at stake, led to his challenging the Special Commissioners’ decision by way of this appeal.

2.	Mr Rowland’s claim to relief was based on the proposition that the relevant bank interest was incurred by him. In fact it was charged on bank loans made to a company called Internoms Limited, owned by himself and his wife. He made the claim on the basis that Internoms was acting as a nominee for him in borrowing the money on which the interest was charged. The Special Commissioners concluded that Internoms was not acting as a nominee and that Mr Rowland did not believe that it was, and therefore that, when he made the claim for relief in respect of the interest, he knew that he was not entitled to it.

3.	That conclusion by the Special Commissioners involves findings of fact and inferences. An appeal from the Special Commissioners, however, lies only on a point of law. The point of law here has to be that the findings of fact made could not have been justified by the evidence before the Special Commissioners (Edwards v. Bairstow [1956] AC 14), and that the inferences could not be justified by the primary facts found. It is accepted that where, as here, the findings in question involve fraudulent and therefore criminal conduct, although the burden of proof is the balance of probabilities, there is a degree of inherent unlikelihood that a professional man otherwise of good character would commit such acts, and that such a finding should therefore be regarded as requiring correspondingly stronger evidence before the balance shifts in favour of the Revenue. There is, however, no suggestion that the Special Commissioners misdirected themselves about the burden of proof in the passage (paragraphs 103 to 107) in their decision where they dealt with this point. Accordingly it does come back to a question whether there was evidence before the Special Commissioners which could justify their findings of fact, and in turn the inferences which they drew.

4.	The claim arose from an unsuccessful joint venture in relation to a property in Pimlico, embarked on in 1988, and financed by bank borrowing, where a large old property was bought and was converted into flats, the latter being sold off at premiums. The cost of the work and the borrowings, taken, no doubt, with the decline in the property market from 1989, and the time it took to carry out the conversion work, meant that flats were not sold as quickly or for such good prices as would have been necessary for the venture to be profitable. It was in those circumstances that Mr Rowland sought to claim the deduction of the interest, which he said he had borne, against his other income for tax purposes. He claimed it as interest as such, rather than as a trading loss, but he did not claim it in the first year in which, if the claim was justified, he could have done so.

5.	I must summarise the history, in order to put into context the principal matters on which the Special Commissioners relied in reaching their conclusion, and to consider the criticisms addressed by Mr Higham Q.C. to their reasoning. The facts are set out in detail in paragraphs 8 to 92 of the Special Commissioners’ decision, and are not challenged by the Appellant.

6.	Mr Rowland is a chartered accountant, in practice for many years, during the relevant time in a firm called Wagstaff, Rowland & Huntley. Internoms was a company established by him, whose first objects were to act as nominee or trustee. He and his wife were the directors and shareholders. Until the relevant transaction it was dormant. One of his clients was Mrs Gwenda Wood, along with two companies of which she was the director and. shareholder, Ruleregal Ltd and Ruleregal (Construction) Ltd. Two other individuals featured in the history: first, Mr Parkinson, a solicitor in the firm of L B Marks & Co, who had acted previously for Mrs Wood and for Ruleregal, though not for Mr Rowland or Internoms, but did act for Internoms in the transaction, and secondly Mr Clare, a manager at Midland Bank who had known Mr Rowland for some years and had an exceptionally strong business relationship with him. Midland Bank was one of two banks which provided finance for the transaction.

7.	The transaction itself consisted of the purchase of a property, 75 St George’s Square in Pimlico, its conversion into (eventually) six flats and their sale. Contracts were exchanged for the purchase on 20 July 1988, with completion on 12 August. The purchaser was Internoms. Originally, however, the purchase had been identified by Mrs Wood and the first offer to buy, subject to contract, had been made (and accepted) in March on behalf of Ruleregal. Mr Rowland became aware of the proposed purchase soon after that. Both he and Mrs Wood sought finance for the transaction, Mrs Wood from Dunbar Bank, in the name of Ruleregal, and Mr Rowland from Midland on behalf of Jnternoms. Mr Rowland dealt with Mr Clare about this, and met him on 20 May 1988, a meeting of which Mr Clare made a contemporary note.

8.	Both requests for finance were successful, Midland Bank as to £250,000 and Dunbar up to £886,000 (to cover 70% of the development costs). By June the purchase was to proceed in the name of Internoms, instead of Ruleregal, though it is clear that there was some sort of joint venture in relation to the project between Mr Rowland and Mrs Wood. After a delay due to occupation by squatters, exchange took place at the property on 20 July, with both Mr Rowland and Mr Parkinson present. On 9 August Mr Parkinson sent to Mr Rowland some documents which required attention in connection with the proposed charge to Dunbar to secure their lending. This led to a telephone conversation and a subsequent letter by Mr Parkinson to Dunbar’s solicitors, Grangewoods, to which I will have to return. Completion took place on 12 August of the purchase and of the security for Dunbar’s lending. Midland’s lending was not secured on the property bought. From then on Internoms had loan accounts with both banks, to which interest was debited quarterly, starting in September 1988.

9.	I can summarise the later history of the project itself even more briefly. Building work started in early 1989, being undertaken by Ruleregal Construction. The construction work was funded as to 70% by Dunbar’s facility. Ruleregal Construction bore the balance, paying its subcontractors. By mid 1989 this burden was causing problems for Mrs Wood. She sought a contribution from Mr Rowland, unsuccessfully. The first flat sold was number 6, in December 1989. Further flats were sold, but much more slowly than had been hoped. Mrs Wood’s financial difficulties continued and relations between her and Mr Rowland deteriorated. By the end of 1990 four out of the six flats were sold, £207,000 remained owing to Dunbar and £300,000 to Midland. In the early part of 1991 the relations between Mr Rowland and Mrs Wood broke down, Mr Rowland countering her previous requests for a contribution to the cost by claiming from her a contribution to the expense that he had borne. In response she denied that there had been any joint venture. Both her companies went into insolvent liquidation in April 1991. In August 1991 the fifth flat was sold.

10.	In April 1989 Mr Rowland had submitted his tax return in respect of income for the year to 5 April 1989. He made no claim for relief in that return in respect of any of the interest on the loans which had accrued and been paid up to 5 April 1989. On 22 August 1991 he submitted his returns for the years to 5 April 1990 and 1991. In these he claimed relief for “interest on other loans” in respect of the interest paid on the Dunbar and Midland loans for three years: to 5 April 1989, 1990 and 1991. In a covering letter he drew attention to this claim for relief and explained the purpose of the loans. He said that the project made a substantial loss and that he would supply a copy of the accounts when the last flat had been sold. Later, in a letter dated 6 January 1992, with which he sent Dunbar’s certificates of interest, all addressed to Internoms, he said that “for the purposes of convenience the property was held in the name of Internoms a nominee company controlled by myself which has never traded”. On 24 February 1992 he sent to the Revenue the accounts for Internoms for the calendar years 1988 to 1991, which had all just been prepared. In March 1992 the Revenue allowed the claim for interest relief. Later in 1992 Mr Rowland took a transfer of the one remaining flat into his own name. Eventually in 1995 the headlease was sold and the lending by Midland was repaid. The Dunbar loan had been repaid by the end of 1991. Overall the project showed a loss of some £100,000 even before allowing for interest costs. The interest for which relief was claimed, and allowed, amounted to £448,259 over five years. The tax sought to be recovered amounts to £179,303.08.

11.	Mr Rowland’s claim was based on the proposition that he bore the interest, because Internoms was acting as his nominee. The Revenue raised its assessments to disallow the interest relief on the basis that this was not true, and that either he had known that it was not true, or he ought to have known it not to be true. The alternative claim was therefore of negligent conduct. Although the Special Commissioners said, in the last sentence of paragraph 141 of their decision, that his conduct was negligent, it is clear that, on the evidence, it was not a case of negligence, but of either fraud or nothing.

12.	Mr Rowland was the mind behind Internoms. Thus, whatever the status of Internoms was in the transaction, it was known to Mr Rowland. Indeed it depended on him. At the time, if he intended Internoms to act as a nominee, it would have so acted. Internoms cannot have acted as a principal without Mr Rowland knowing and intending that it should .Nor was it said that the passage of time may have led to any misunderstanding or mistake on Mr Rowland’s part. Accordingly, a finding by the Special Commissioners that Internoms was acting as principal must have carried with it a finding that Mr Rowland knew this to be the case.

13.	Before the Special Commissioners, in its Statement of Case, the Revenue set out in paragraph 7 eight matters on which it would principally rely in support of its case that Internoms had not beer acting as a nominee, contrary to Mr Rowland’s assertion In paragraph 8 it then asserted that when he made the claims for interest relief, Mr Rowland knew or ought to have known that Internoms had acted beneficially, that as an experienced chartered accountant he knew or ought to have known that he was not entitled to claim the relief and that accordingly he was acting fraudulently or negligently in making the claim.

14.	In their decision the Special Commissioners focussed on the eight allegations, and one added by the Revenue at the hearing. They expressly found the first eight to be established. The ninth was a more general point, and led them to a review of five arguments advanced for Mr Rowland. Then they considered some criticisms advanced at the hearing of Mr Rowland’s case. They concluded their decision in two paragraphs which I should quote here:

“140. Having considered each of the allegations of the Respondent and each of the arguments for the Appellant we now stand back and consider the picture as a whole. Taken as a whole the evidence supports the conclusion that Internoms did not act as a nominee and that the Appellant did not think that it was acting as nominee. In our view all the evidence is consistent with a finding that Internoms itself was trading and that there was some sort of joint venture arrangement that the trading profits or losses of Internoms were to be shared with Ruleregal, Construction, or, possibly, with Mrs Wood.

141.	We now turn to consider the issue in the appeal which is whether, for the relevant years, there was a loss of tax attributable to the fraudulent or negligent conduct of the Appellant. On the evidence before us we conclude that the Inland Revenue has discharged the burden of proving that the Appellant made the claims for interest relief in his personal tax return when he knew he was not entitled to do so. In our view that is fraudulent conduct as it involved dishonesty and the Appellant knew what he was doing. It is also negligent conduct.”

15.	Mr Higham for Mr Rowland criticises this passage as not containing any analysis or reasoning, and in particular as not addressing the question whether the matters which
the Special Commissioners had found to be established had sufficient probative value to justify the serious finding of fraud against a professional man. It seems to me that the force or otherwise of that criticism needs to be tested in relation to what else the Special Commissioners had said, both about the facts and about the witnesses.

16.	They heard evidence from Mr Parkinson, who attended under compulsion and who, concerned about client confidentiality, had not supplied any statement or documents in advance. They also heard from Mr Clare, who had provided a statement. On Mr Rowland’s behalf they heard only his own evidence. He had obtained a witness summons in relation to Mrs Wood, but this was not served, and she did not attend. In paragraph 99 they dealt with the witnesses. They took a favourable view of the reliability of Mr Parkinson and Mr Clare, but not of Mr Rowland, whom they said was successfully challenged in cross-examination. They did not identify particular passages or points in this regard, but I have read the whole transcript of the evidence, and it seems to me clear that there was material on which that comment could fairly be based, not in the sense that he was driven to accept that his answers had been incorrect, but that some of his evidence was shown to be, at the least, problematical.

17.	Not all of the Revenue’s eight points are of equal significance. In his submissions before me Mr Ewart for the Respondent identified five points as more important than the rest. It seems to me that for present purposes I can focus on two of them. In each of these cases the Revenue’s contention was that Mr Rowland had said to another man at the time that Internoms was acting as a principal. Mr Rowland denied that he had said any such thing. If he had said it, it has to be assumed that he was telling the truth at the time. Accordingly, if the Special Commissioners found as a fact on the evidence that he did make these statements, they could fairly draw the inference that in so doing he was not lying and that Internoms was indeed acting as principal.

18.	Of these two points, the second in time is the first in importance. On 8 August 1988, in advance of completion, Grangewoods, for Dunbar Bank, asked Mr Parkinson this question: “Is Internoms a nominee or trustee for others and if so who are the beneficiaries and have they consented to the proposed charge over [the property]?” On the next day Mr Parkinson spoke on the telephone to Mr Rowland and then wrote to him a letter dealing with Dunbar Bank’s requirements, mostly as regards documents. Towards the end of his letter he said this:

“One particular matter which has just been raised is the position of Internoms Limited and whether it is in fact a Trustee or Nominee for others and if so who are the beneficiaries. It was my understanding that the company is beneficially owned by yourself and your wife and that the company has simply entered into a Joint Development Agreement with Gwenda Wood, but perhaps you would kindly confirm the position in order that I can satisfy the Bank.”

19.	On the following morning the two men spoke again on the telephone. Mr Parkinson then wrote to Grangewoods a letter which he sent to them by fax early that afternoon. The letter concluded with this paragraph:

“Finally with regard to the status of Internoms Limited itself our clients have confirmed that the company is beneficially owned by Mr and Mrs Rowland and that they do not hold as nominees for any other party. As your clients are aware the company does have a joint development arrangement with Mrs Wood, but the company is in no sense a nominee. We trust that this is sufficient reassurance for your clients.”

20.	Mr Parkinson was asked about this sequence of letters in chief and in cross-examination. Asked on what basis he made the statement in the last quoted paragraph that the company was in no sense a nominee, he said that he had no attendance note (and he accepted elsewhere that he had no independent recollection, after 14 years), but that he would not make a statement in those terms without having instructions to make it, and he would not have made it solely on instructions from Mrs Wood. He also said that the terms in which he wrote made it (and deliberately so) a categorical statement. If he had been trying to avoid a direct answer he would have used a different formula, such as “we understand that”. In cross-examination he confirmed that he could not remember the conversation but that he would not write that letter unless he was so instructed. It was clear from the record of the time when it was faxed to Grangewoods that it had been dictated, typed, signed and sent within a few hours of the telephone conversation.

21.	Mr Rowland had said in his statement that he did not give Mr Parkinson instructions which were correctly reflected in the letter, and indeed, to the contrary, when he met Mr Parkinson at the time of exchange, he told Mr Parkinson that Internoms was a nominee company. In chief he reiterated that he had told Mr Parkinson on that occasion that Internoms was a nominee, for himself and Mrs Wood. In cross-examination he was asked about the events of 10 August. He said he could remember the conversation with Mr Parkinson on the telephone that morning, that the discussion was limited to how he would put in funds to complete the purchase, and that the question of the status of Internoms was not discussed. On that evidence it could not have been put as a question of misunderstanding. Either Mr Parkinson, having asked specifically in his letter for instructions on the point, failed to mention the point on the telephone and went on to deal with it in correspondence without having instructions, or Mr Parkinson had asked Mr Rowland and had been told that which he passed on to Grangewoods.

22.	Mr Higham submitted that there were two clear instances in the documents of Mr Parkinson acting without instructions at about this time, and that this showed that he might have so acted in this case. One, which really is a mere formality, concerned a certificate of deduction of tax on interest payable on completion. The other arose when, also on completion, he gave an undertaking on behalf of Internoms to lodge an insurance policy with Dunbar’s solicitors, not having instructions to do so because Mr Rowland was away for a day. The latter exposed Mr Parkinson’s firm to a theoretical liability, but not his client. It is therefore not merely of very limited significance, but a matter on which he could take his own risk. By contrast, if he had said what he did in his letter of 10 August without instructions, that would have exposed his client to an unknown risk to the bank. The documents suggest that Mr Parkinson was a careful solicitor, who would not have acted in such a way. The transcript of his evidence seems to me to convey the same impression. On the conflict of evidence between Mr Rowland and Mr Parkinson as to whether Mr Rowland told Mr Parkinson that which he passed on in his letter, it seems to me that what the Special Commissioners say about preferring the evidence of Mr Parkinson and finding that of Mr Rowland unreliable, far from being a conclusion not open to them on the evidence, is possibly the only conclusion they could reasonably come to on the evidence. I do not need to go so far, but it is clear to me that there was evidence before them on which they could properly find, as a fact, that Mr Rowland had told Mr Parkinson on 10 August that Internoms was in no sense a nominee.

23.	Mr Higham criticised the Special Commissioners for the way they dealt with this point. He said that at paragraph 117 they put words into Mr Parkinson’s mouth which he did not say. They said, among other things, “we accept the evidence of Mr Parkinson that he told the solicitors for Dunbar that Internoms was not a nominee on the specific instructions of” Mr Rowland. Mr Higham said that this was not Mr Parkinson’s evidence. He made the same criticism of the last sentence of paragraph 132, referring to “the evidence of Mr Parkinson that he was instructed that Internoms was not a nominee”. I agree that he did not say so in terms, because he did not recall the conversation, but it is clearly the effect of Mr Parkinson’s evidence as a whole that Mr Rowland had given him those instructions.

24.	Mr Higham submitted, as he had to, that the evidence before the Special Commissioners did not permit a finding that Mr Rowland had said anything to Mr Parkinson which could be correctly transmitted to Grangewoods as “the company is in no sense a nominee”. He submitted that they could find that there was a telephone conversation on the morning of 10 August between the two men (that was not in dispute) and that Mr Parkinson believed that he was stating the position as he had been instructed, but that they could not find that Mr Rowland had in fact said anything that justified such a belief. He further submitted that it was not clear that they had in fact made such a finding, and that even if they had done, they did not address the consequences of such a finding in probative terms, in particular in the light of the other evidence before them.

25.	He submitted that, in the light of the other evidence, there was ample room for a misunderstanding between the two men on the point. That point seems to me not consistent with the evidence. If Mr Rowland was to be believed, nothing was said on the point, and Mr Parkinson said what he did in his letter without instructions on the point, despite having asked expressly for those instructions in his letter the previous day, and he must have known that he was making this statement without instructions. If, on the other hand, Mr Parkinson is to be believed, then Mr Rowland did tell him on the telephone that which he passed on to Grangewoods in his letter.

26.	A similar conflict arises as regards the other main point relied on by Mr Ewart. On
20 May 1988 Mr Rowland met Mr Clare to discuss the development project. Mr Clare made a note that day of what had been said at the meeting. The notes are headed Internoms Ltd. They include the statement that Mr Rowland’s “stake is being raised through the company for tax reasons rather than in his own name”. If this statement was a correct record of what was said, and of the underlying position, it was not consistent with Internoms being involved as a nominee. Mr Rowland said that he had not told Mr Clare anything which could justify that note. The Special Commissioners accepted Mr Clare’s evidence that, although he could not recall the conversation, his note was made that day. They held that it was an accurate record.

27.	Mr Higham criticised the Special Commissioners’ finding, particularly because it was clear that Mr Clare regarded the lending as being to Mr Rowland, and because of various inconsistencies and confusions in Mr Clare’s notes. He pointed out that there was no need for Mr Rowland to tell Mr Clare the position in this respect. That is no doubt true but it does not follow that he did not do so. Mr Higham also pointed out that this was at an early stage, and that the decision that Internoms was to be the buyer may not have been taken by then. But there is no suggestion that there was a later change, and Mr Rowland’s evidence is that the comment was just not made. There is a confusion in the first paragraph of the note, about the history of Internoms That indicates an unclear perception by Mr Clare of what he was told about the history of the company. Mr Higham pointed out a number of other possible or apparent inconsistencies in Mr Clare’s notes. He submitted that, in the light of these factors, the point had no probative value, rather than that the Special Commissioners could not properly have held that Mr Rowland did say what Mr Clare recorded in that passage.

28.	This point could be said to be less compelling than the first, because it was not raised specifically to be communicated to a third party. However, Mr Rowland and Mr Clare knew each other very well. Mr Clare no doubt failed to record correctly some facts as regards Internoms’ history, but this particular statement is of a different kind. Again Mr Rowland says he simply did not make it, in which case Mr Clare, dictating his notes of the meeting that same day has imagined Mr Rowland saying this.

29.	I can ignore for present purposes the other points relied on by the Inland Revenue before the Special Commissioners. They were less compelling, and while it was right for them to be identified in the context of the hearing before the Special Commissioners, on appeal they are less significant. If the two main points mentioned do not justify the Special Commissioners’ finding, then the other points will not, and if on the other hand the main points do provide material to justify the Special Commissioners’ finding, it would make no difference even if the subsidiary points would not do so by themselves.

30.	Mr Higham presented a closely argued attack on the Special Commissioners’ decision, based on what he said was the inadequacy of some of the material before them, and the limited probative value of other matters relied on. He stressed that they had had direct evidence from Mr Rowland which he submitted ought to have had a more persuasive effect than the matters of inference, or documentary evidence, as to what had been said 14 years previously. His difficulty in this is that while Mr Rowland did of course give direct evidence which, if accepted, would justify a finding that Internoms had been a nominee, the Special Commissioners saw him give that evidence and saw him cross-examined, and did not accept that his evidence was credible on the points in issue. Conversely they did accept the disinterested evidence of Mr Clare and Mr Parkinson. That led them to find as a fact that Mr Parkinson was told by Mr Rowland on 10 August 1988 that Internoms was not a nominee, and that Mr Clare was told on 20 May 1988 that Mr Rowland was using Internoms rather than borrowing directly, for tax purposes. Those findings were fatal to Mr Rowland’s case, and unless Mr Higham can show that there was no evidential basis for those findings, they are fatal to his appeal.

31.	Mr Higham further criticised the Special Commissioners for not having stated clearly what they did find, and for not having addressed expressly the consequences of such a finding. He submitted that even if they were entitled to, and did, find that Mr Rowland told Mr Parkinson that Internoms was not a nominee on 10 August 1988, they would have had to have considered the implications of that finding in the light of other evidence, including the direct evidence of Mr Rowland, and whether that was a sufficient basis for saying that Mr Rowland was dishonest when putting in his claim for interest relief in 1991 on the basis that Internoms was a nominee. As to that, first, the conclusion they came to was based on their rejection of Mr Rowland’s direct evidence as unreliable. Secondly, it was never part of Mr Rowland’s case that there was any misunderstanding or mistake on his part at any stage. If, when eventually challenged by reference to the 10 August 1988 letter, he had accepted that the claim to interest relief had been put on a false basis, due to his having forgotten the correct position, the question would not have arisen. But he has always maintained that he knew and understood the position, and that it was not correctly stated by Mr Parkinson. On that basis, all depends on whether his evidence or that of Mr Parkinson was accepted.

32.	Mr Higham placed a good deal of reliance on references in correspondence on the part of Mrs Wood which suggested that she regarded herself as being in a joint venture with Mr Rowland himself, and not with Internoms. She was not called as a witness. This is not surprising, since she had fallen out with Mr Rowland in the later stages of the venture. Mr Higham submitted that it was for the Revenue to have called her, and that in her absence inferences should be drawn in his client’s favour. I cannot accept that. It was he who sought to rely on her comments as corroborating Mr Rowland’s evidence of personal involvement. It was therefore for him to call her if he wanted her evidence to be before the Special Commissioners with the added weight arising from having been given orally and tested in cross-examination. The letters themselves were admissible in evidence before the Special Commissioners, but they really prove nothing. The references are all in a more or less informal context, and are entirely consistent with the underlying reality that, whether or not one or more corporate entities was involved and in whatever capacity, the individuals behind the transaction were Mrs Wood and Mr Rowland. It is natural for her to have referred to Mr Rowland, rather than to Internoms, as “her equity partner”. The precise nature of the transaction as between Mr Rowland (whether or not through Internoms) and Mrs Wood (whether or not through one of her companies) was not relevant to the Special Commissioners’ decision. All that was relevant was the status of Internoms in relation to the borrowing. That is something on which Mrs Wood could not have helped. It was for Mr Rowland to give evidence of that, and to be challenged by reference to things he said at the time.

33.	Having read and re-read the witness statement of Mr Rowland and the transcript of the evidence given by Mr Parkinson, Mr Clare and Mr Rowland, it is clear to me that there was material on which the Special Commissioners could come to the conclusion that Mr Rowland’s evidence was not reliable and that of Mr Parkinson was, as to what was said on 10 August 1988. The same is true, though the statement itself is not quite so compelling because of the different context, of the evidence as to what Mr Clare was told on 20 May 1988. It seems to me clear that the conclusion to which the Special Commissioners came was one which was well open to them, maybe not the only possible view, but undoubtedly a possible view, of the facts.

34.	Likewise, it was open to them to find, as an inference, that what Mr Rowland told Mr Clare and Mr Parkinson was true, because he had at that time no incentive to say anything other than the truth. In my judgment that is what they did find, and accordingly it followed that Mr Rowland had told the truth to Mr Clare and Mr Parkinson in 1988 but had put forward his tax return in 1991 dishonestly, knowing that Internoms had been a principal not a nominee. I accept Mr Higham’s proposition that this is a serious matter to find in relation to a chartered accountant, but I do not accept that the Special Commissioners’ decision can fairly be criticised for lack of analysis or reasoning. Once they had found that Mr Rowland’s evidence was not reliable, and had accepted that of Mr Clare and Mr Parkinson, the consequent finding in favour of the Revenue was inevitable.

35.	I therefore dismiss this appeal.