| PRACTICE — Discovery — Privilege — Legal professional privilege — Revenue investigation — Commissioners’ power to require production of documents from taxpayer’s solicitor — Whether subject to safeguards applicable to tax inspector’s power to require production from anyone other than an “barrister, advocate or solicitor” — Taxes Management Act 1970, s 20, 20B (as inserted and amended by Finance Act 1976, s 57, Sch 6 and Finance Act 1989, s 142)
R (Cooke) v Revenue and Customs Commissioners [2007] EWHC 81 (Admin)
QBD: Munby J: 30 January 2007
The procedural safeguards to protect a taxpayer who was required by a tax inspector to produce documents under s 20 of the Taxes Management Act 1970 did not apply to the Revenue Commissioners exercising their powers under s 20(3) and 20B(3) to require the production of documents from a taxpayer’s solicitor.
Munby J so held in a reserved judgment refusing an application for judicial review by the claimant, Jonathan Cedric Cooke, of a notice dated 25 August 2005 requiring him to make available for inspection documents concerning the tax affairs of a client.
S 20(3) of the Taxes Management Act 1970, as amended, provides a tax inspector with power to serve a notice on a taxpayer calling for the production of documents. S 20B of the Act restricts an inspector’s powers, so that in cases not involving a barrister, advocate or solicitor, he must have served a precursor notice, must have obtained consent of a general commissioner and must have given a written summary of his reasons to the taxpayer.
MUNBY J said that the question was whether the Commissioners’ exercise of their powers under ss 20(3) and 20B(3) of the Taxes Management Act 1970 when requiring the production of documents or information from a barrister, advocate or solicitor was subject to the same conditions and safeguards as when an inspector was exercising his powers under s 20(3) in relation to anyone other than a barrister, advocate or solicitor. For the claimant solicitor it was argued that the Commissioners’ powers were so circumscribed. His argument had to fail. S 20B(3) did three things: (i) disqualified an inspector from giving any s 20 notice to a solicitor; (ii) provided that such a notice could be given only by the Commissioners; and (iii) provided how certain of the provisions were to be applied where a notice was given by the Commissioners rather than by an inspector. Reliance was placed by the Revenue on Lord Hoffmann’s observations on statutory safeguards in R (Morgan Grenfell & Co Ltd) v Special Comr of Income Tax [2003] 1 AC 563. Those observations provided powerful support for the Revenue’s case. Moreover the claimant solicitor’s further argument seeking support by reliance on art 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms did not assist him. However the Commissioners should not read too much into the judgment. It left unanswered the issue as to how far the Commissioners could lawfully go in delegating their s 20B functions. The other matter related to judicial review. If it was to be the important safeguard needed, it had to provide scope for an appropriate degree of judicial examination and evaluation of the reasons why the Commissioners had decided to exercise their powers in any particular case. Where they had given a s 20(3) notice under s 20B(3) they might find themselves in difficulties if they resisted reasonable and proper requests for information as to why they had decided to give the notice. There was a duty on public authorities involved in judicial review proceedings to make full and fair disclosure and provide full and accurate explanations.
|
