COURT OF APPEAL REGINA v. INLAND
REVENUE COMMISSIONERS, Ex parte NATIONAL
FEDERATION OF SELF-EMPLOYED AND SMALL BUSINESSES LTD. Annotated Law
Reports version at [1980] Q.B. 407 COUNSEL: Jon Harvey Q.C. and Stephen Silman for the federation. Patrick Medd Q.C. and Brian Davenport for the Inland Revenue. SOLICITORS: Beachcroft, Hyman Isaacs; Solicitor of Inland Revenue. JUDGES: Lord Denning M.R., Lawton and Ackner L.JJ DATES: 1980 Jan. 21, 22, 23, 24; Feb. 27 Appeal from the Divisional Court on the question of a tax
amnesty granted by the Inland Revenue to casual workers in Fleet Street. Cur. adv. vult. [*418] LORD DENNING M.R. The men are called the Fleet Street
casuals. There are about 6,000 of them. They do casual work for
newspapers. They love a bit of humour. When signing their pay dockets, they do
not sign their true names. They use fictitious names and addresses. One
favourite is Mickey Mouse of Sunset Boulevard. Another is
Sir Gordon Richards of Tattenham Corner. But they do not
sign in these names merely for fun. They use them for a serious purpose. It is
to hide their true identities: so that they should not be discovered by the
taxmen. By this means the Fleet Street casuals have
defrauded the revenue of about £1 million a year. The employers did not know their true names. But the trade unions
did. There are three trade unions controlling this newspaper trade: N.G.A.,
N.A.T.S.O.P.A. and S.O.G.A.T. Every casual worker has to be a member of one of
these trade unions: because they operate a closed shop. Each union has the
names and addresses of all its casuals. When a man seeks work, he has to go to
the call office of the union. He is then given a
call slip authorising him to go to a particular newspaper
for work. He does his work; receives his pay; signs his pay docket as
Mickey Mouse or other fictitious name and address; and goes
home. This device defeats the revenue authorities completely. They do not know
the true names of these men. The trade unions do. They have a complete list of
the men, their names and addresses, and the shifts worked by them. In many ways
the trade unions fill the role of the mens employers. But the revenue
authorities have no access to these lists. They have no power to compel the
unions to disclose the true names and addresses. So they cannot assess them to
tax on their earnings. A year or two ago the revenue authorities found out about these
false signatures. So did the B.B.C. They had a programme on
Panorama exposing these frauds. The revenue authorities
were perplexed. They wondered what was the best way to deal with the problem.
They would have liked to have legislation to deal with it. But in the absence
of new legislation, they felt that they had to make a special arrangement with
those concerned. It looks as if these casuals threatened to take industrial
action if their names were disclosed and they were made to pay up their past
taxes. So the revenue authorities had discussions with the employers and the
trade unions. They came to a special arrangement. It was this: - The men were
to give their true names for the future and pay their future taxes: but they
were given an amnesty for much of the past. They were to be let off most of the
past tax of which they had defrauded the revenue. The reasons are given in an
affidavit by Mr. Hoadley, a principal inspector of taxes: ... I considered that if any
solution was to have a real prospect of being effective the agreement of the
employers and the co-operation of the casual printing workers and their union
representatives was essential. I feared that if this co-operation could not be
achieved, the employers would be unlikely to agree to any solution [*419] because of the real
possibility of industrial action being taken. The newspaper industry, as is
well known, is peculiarly vulnerable to industrial action and the workers have
a tradition of independence. Even when the new arrangement which I describe
below was introduced with the approval of the employers and the co-operation of
the trade unions, over ten million copies of newspapers were lost from
consequential industrial action. While the possibility of industrial action
would not prevent me from seeking a satisfactory solution to the problem of
printing workers in Fleet Street, I considered that any scheme could only be
effective for the future if it were introduced by general agreement rather than
against a background of opposition.... ... The main factor in my mind
throughout this matter was to secure a new system for the future which would be
effective to stop the tax loss. I considered that by this means more tax would
be collected than if, without first securing the future, an attempt were made
to recover the whole of the past tax which might have been lost. Such an
attempt, being made against a large number of hostile workers where no records
were available to show that they had been in receipt of casual earnings, would
have been unlikely to produce any substantial sums of money and would, I
consider, have seriously delayed or even permanently frustrated the
introduction of the new arrangement. News of the amnesty was given in the newspapers and on the
television. Many were shocked by it. Especially some self-employed and small
shopkeepers - good men and true who pay their taxes. They asked themselves:
Why should these Fleet Street casuals - who have
defrauded the revenue - be given this preferential treatment? Why should they
be let off when any one of us (if he did any such thing) would have been
pursued to the uttermost farthing? So these small men, through their federation, 50,000 of them, took
legal advice. On it they have taken advantage of a new procedure called
judicial review. They have come to the courts and ask for
this relief. (i) A declaration that the Board of Inland Revenue acted
unlawfully in granting an amnesty to casual workers in Fleet Street, and (ii)
an order of mandamus directed to the board to assess and collect income tax
from the said casual workers in Fleet Street, according to the law. In support of their case, the self-employed and small shopkeepers
sought to get the Board of Inland Revenue to disclose their papers relating to
this amnesty: especially as to the negotiations with the unions and the
employers. This has been adjourned: because of this preliminary objection: the
revenue object to these proceedings being taken against them. They say that no
one has any standing to come to the courts to complain of their actions. No one
at all. Not an ordinary citizen. Not even a taxpayer who is aggrieved by them.
Not even the 50,000 of them in this federation. May be the Attorney-General
might do so, but he has never been known to proceed against a government
department. The Divisional Court has upheld the contention of the revenue. The
self-employed and small shopkeepers, as taxpayers, appeal to this court. [*420] This case thus raises a problem which was described in the New Law
Journal (vol. 130, p. 181) for February 21, 1980, as the major
problem in relation to judicial review of tax concessions concerns locus
standi. Who can challenge the legality of a tax concession? At first sight the House of Lords in Gouriet v. Union of Post
Office Workers [1978] A.C. 435 seem to have slammed the door against ordinary
citizens coming to the court - except one who has suffered a particular damage.
But that decision was concerned only with relator actions. Lord Wilberforce
pointed out that it did not apply to the prerogative orders such as mandamus or
certiorari. He said at p. 482 that these are often applied for by
individuals and the courts have allowed them liberal access under a generous
conception of locus standi. It is these remedies that we are here
concerned with. They apply only to public authorities, not to trade unions: so
they were not available in Gouriets case. Now as to these prerogative remedies, it was thought in the 19th
century that the applicant must show that he had a specific legal
right to ask for the interference of the court. So said Tapping on
Mandamus (1848), pp. 27-28, followed by Wright J. in Reg. v. Lewisham Union
Guardians [1897] 1 Q.B. 498, 500. That was a deplorable decision. The guardians
of the poor for Lewisham were obliged by statute to see that everyone was
vaccinated against smallpox. They failed in their duty. owing to their default
a great number of people were not vaccinated. That put everyone else at risk.
Yet no one had any locus standi to complain. Not even the local authorities.
Nobody was allowed to come to the court - so as to compel the performance of
the duty. Similarly, in Reg. v. Customs and Excise Commissioners, Ex parte
Cook
[1970] 1 W.L.R. 450. Under a statute, bookmakers were bound to pay for their
licence by two half-yearly instalments. Yet a minister, by a private
concession, allowed some of them to pay monthly. It was held that nobody was
allowed to come to the court so as to question the validity of the concession.
Not even rival bookmakers could complain. Lord Parker C.J. felt at p. 455 that
the result was alarming in that the word of the minister is
outweighing the law of the land. Yet he felt he must follow the Lewisham case [1897] 1 Q.B.
498. The time has come when we must declare that those cases were wrongly
decided. They meant that public authorities could break the law with impunity:
for the simple reason that no one had any locus standi. It is now clear that
all the talk about specific legal right was a mistake.
There is only one requirement and that is simply that the applicant must have a
sufficient interest in the matter to which the application
relates. That was the test recommended in 1975 by the Law Commission in
their Report on Remedies in Administrative Law (Law.Com.
No. 73, Cmnd. 6407, para. 48) and adopted in R.S.C., Ord. 53, r. 3 (5). The
Rule Committee must have thought that it represented the existing law: else the
rule would have been ultra vires. I also think it represents the existing law. This leaves open the question, of course, what is a
sufficient interest? To that I answer, as many statutes
have done in similar situations: Any person aggrieved - by
the failure of a public authority [*421] to do its duty - has a sufficient interest.
He can come to the court and apply for a mandamus to compel it. At one time
those words, person aggrieved, were given a restrictive
interpretation, confining it to a person who had a specific legal grievance:
see Ex parte Sidebotham (1880) 14 Ch.D. 458, 465. But that interpretation was
overthrown in Attorney-General of the Gambia v. NJie [1961] A.C. 617, 634,
where I said: The words person
aggrieved are of wide import and should not be subjected to a
restrictive interpretation. They do not include, of course, a mere busybody who
is interfering in things which do not concern him: but they do include a person
who has a genuine grievance because something has been done or omitted to be done contrary to
what the law requires. The most instructive cases on this topic are those in which a
ratepayer qualifies as a person aggrieved. He has a
sufficient standing to complain of an error in the valuation list whereby some
other person has been rated too little. The complainant may be only one
ratepayer out of the 21 million people in the area of Greater London. He may
complain that a valuation is too little on the other side of London 20 miles away.
He is a person aggrieved even though he is not affected in
his pocket in the slightest. Lord Wilberforce put it well when he said in Arsenal
Football Club Ltd. v. Ende [1979] A.C. 1, 17: Uniformity and fairness have always
been proclaimed, and judicially approved, as standards by which to judge the
validity of rates. Indeed I believe that many men feel a more acute sense of
grievance if they think they are being treated unfairly in relation to their
fellow ratepayers than they do about the actual payments they have to make. To
produce a sense of justice is an important objective of taxation
policy. The locus standi of a ratepayer is not confined, however, to
errors in the valuation list or in rating matters. He has a standing to
complain whenever his local authority do something which they ought not to do -
or omit to do something which they ought to do. Notable examples are when the
Birmingham Corporation granted free travel on their buses to old people: see Prescott
v. Birmingham Corporation [1955] Ch. 210; and when the Hereford Corporation failed
to put a contract out to tender as they ought to have done (Reg. v. Hereford
Corporation, Ex parte Harrower [1970] 1 W.L.R. 1424) and when the Greater
London Council licensed the showing of pornographic films (Reg. v. Greater
London Council, Ex parte Blackburn [1976] 1 W.L.R. 550). Mr. Medd submitted to us that ratepayers were a race apart from
other men. The courts for centuries had listened to their grievances whereas
they would refuse other people. I see no justification for this submission. In
this court in Blackburns case [1976] 1 W.L.R. 550 the majority of the
court gave relief, not only to Mrs. Blackburn as a ratepayer but also to Mr.
Blackburn as a resident and citizen of London. He was offended by the display
of pornographic films. Thus bearing out [*422] Lord Wilberforces dictum in Gouriets case [1978] A.C. 435,
483: A right is none the less a right, or a wrong any the less a
wrong, because millions of people have a similar right or may suffer a similar
wrong. On this review of the authorities I would endorse the general
principle stated by Professor H. W. R. Wade Q.C. in his Administrative Law, 4th
ed. (1977), p. 608. He says: It [the law] should recognise that
public authorities should be compellable to perform their duties, as a matter
of public interest, at the instance of any person genuinely concerned; and in
suitable cases, subject always to discretion, the court should be able to award
the remedy on the application of a public-spirited citizen who has no other
interest than a regard for the due observance of the law.= Those words were written in relation to mandamus but they apply
also to the other prerogative orders of certiorari or prohibition. They apply
also nowadays to declarations and injunctions - where these are sought in
situations which are comparable to the prerogative orders, that is, against
public authorities who are acting unlawfully. This was recommended by the Law
Commission in their report, No. 73. This recommendation is carried into effect
by R.S.C., Ord. 53, r. 1 (2). Although neither mandamus nor an injunction will
lie against the Crown, a declaration can be made and will be equally effective. Was I in error? In the court below, Griffiths J. took the principle I stated in Attorney-General
ex rel. McWhirter v. Independent Broadcasting Authority [1973] Q.B. 629, 645,
and said that it had been specifically disapproved by Lord Wilberforce in
Gouriets case [1978] A.C. 435, 483. But I would point out that the
disapproval was only in regard to relator proceedings. His disapproval did not
apply to the proceedings by way of the prerogative orders. To these I would say
as I said in Reg. v. Greater London Council, Ex parte Blackburn [1976] 1 W.L.R. 550,
559: I regard it as a matter of high
constitutional principle that if there is good ground for supposing that a
government department or a public authority is transgressing the law, or is
about to transgress it, in a way which offends or injures thousands of Her
Majestys subjects, then any one of those offended or injured can draw
it to the attention of the courts of law and seek to have the law enforced, and
the courts in their discretion can grant whatever remedy is
appropriate. Applied to this case So I come back to the question: have these self-employed and small
shopkeepers, through their federation, a sufficient
interest to complain of this amnesty? Have they a genuine grievance?
Are they genuinely concerned? Or are they mere busybodies? This matter is to be
decided objectively. A busybody is one who meddles
officiously in other peoples affairs. He convinces himself -
subjectively - that there is cause for grievance when there is none. He should
be refused. But a man [*423] who is genuinely concerned can point - objectively - to something
that has gone wrong and should be put right. He should be heard. Let me put the grievance of these self-employed and small shopkeepers.
They base themselves on their own position as 50,000 taxpayers out of 50
million people. (That is equivalent, they say, to a ratepayer out of 21 million
people). They say that these 6,000 Fleet Street casuals
have been given preferential treatment such as would not be accorded to any
other taxpayers. They give examples of the way in which they themselves and
other taxpayers are treated. If any of them should trip and fall, the taxmen
come down on them like a ton of bricks. No amnesty for them. When found out,
they are made to pay to the uttermost farthing. Why should not these
Fleet Street casuals be made to pay up? If their grievance stopped there, I should have doubted whether
they had a sufficient interest. It seems to me that the
revenue authorities should be allowed to negotiate with taxpayers - and come to
a settlement with them - without being harassed by complaints from members of
the public generally. It is most undesirable that every Tom, Dick or Harry
should be able to call the revenue to account for their stewardship - or to pry
into their neighbours tax returns. But the grievances of these self-employed and small shopkeepers
does not stop there. They draw attention to the sharp contrast between the
attitude taken by the revenue when they became aware of tax evasion on a large
scale by the Fleet Street casuals and the attitude adopted by them in other
cases when they suspect that the full amount of tax for past years had not been
paid. They refer to the passages which I have read from Mr.
Hoadleys affidavit in which he points to the real
possibility of industrial action and a large number of
hostile workers. Drawing on these passages they suggest that the
amnesty was forced upon the revenue authorities by threats of industrial
action. If these unions were to disclose the names of the
casuals to the revenue authorities, the men would go on
strike. So also if the revenue authorities were to seek to enforce payment of
the back taxes - the men would go on strike. That would hit the employers very
hard. So much so that the employers implored the revenue authorities not to
insist on payment of the back taxes. Under the weight of these pressures, the
revenue authorities agreed to grant an amnesty. In these circumstances, had the revenue authorities any power to
grant such an amnesty? The Shorter Oxford Dictionary, 3rd ed. (1967), defines
an amnesty as a general overlooking or pardon of
past offences, by the ruling authority. I doubt whether it was within
the power of the Inland Revenue to grant such an amnesty. By the common law an
agreement not to prosecute an offender is itself an unlawful agreement. It is
unenforceable and not binding on the parties to it: see Williams v. Bayley (1866) L.R. 1 H.L.
200 and Jones v. Merioneth Permanent Benefit Building Society [1892] 1 Ch. 173. So
also it may be unlawful for the revenue authorities to grant an amnesty to
these offenders or agree not to collect their taxes. [*424] Now I have to observe that for the purposes of this preliminary
point we must assume that the grant of the amnesty was unlawful. Mr. Medd
invited us to proceed on the assumption that the revenue acted unlawfully
because they have no dispensing power. The only question, on that assumption,
is whether these self-employed and small shopkeepers can complain of such
unlawfulness. Have they a genuine grievance? They think
that the Fleet Street casuals are being given preferential
treatment - over and above that afforded to other taxpayers - because they have
available the weapon of industrial action. These
self-employed and small shopkeepers have no industrial action
open to them. They have no industrial muscle. They have no one against whom to
strike. One thing I must say. If these self-employed and small shopkeepers
cannot complain, there is no one else who can. The unlawful conduct of the
revenue (assuming it is unlawful) will go without remedy. The revenue
authorities will have obtained a dispensing power without it being authorised
by Parliament. And that, by a defect in our procedure - because no one has a
locus standi to complain. Rather than grant the revenue such a dispensing power, I would
allow the whole body of taxpayers a locus standi to complain. Assuredly the
Attorney-General will not complain on their behalf. He never does complain
against a government department. And as the whole body is too cumbersome, I
would allow the body of taxpayers (50,000 of them) represented by the
federation to complain. They have a genuine grievance which finds a parallel in
the grievance of the beneficiaries in Vestey v. Inland Revenue Commissioners [1979] Ch. 177,
197-198, where Walton J. said: I conceive it to be in the national
interest, in the interest not only of all individual taxpayers - which includes
most of the nation - but also in the interests of the revenue authorities
themselves, that the tax system should be fair... One should be taxed by law,
and not be untaxed by concession... A tax system which enshrines obvious
injustices is brought into disrepute with all taxpayers accordingly, whereas
one in which injustices, when discovered, are put right (and with retrospective
effect when necessary) will command respect and support. Those eloquent words were quoted and stressed by Lord Wilberforce
in 1979 when the case reached the House of Lords [1979] 3 W.L.R. 915, 926, 931.
Adapting them here I would say that if the revenue authorities are found to be
exercising a dispensing power - not given to them by Parliament - then it is
open to a representative body of taxpayers - representative of the whole - to
come to the courts to complain of it: and to seek a declaration as to the
rights or wrongs of it. I must confess that, if it were not for the concession made by Mr.
Medd I should have been disposed to say that, as a matter of discretion, the
application should be refused. But once the point emerges - as it does - whether
the revenue authorities have a dispensing power, then it is so important that
in the words of Professor Wade in Administrative Law, 4th ed., p. 608: [*425] The court should be able to award
the remedy on the application of a public-spirited citizen who has no other
interest than a regard for the due observance of the law. My conclusion is therefore that these self-employed and small
shopkeepers are not mere busybodies. They are not spending their funds on this
litigation out of spite or malice. They have a genuine grievance because, as
they see it, the Fleet Street casuals are getting out of
paying their back taxes: because of their industrial
muscle. They feel that this is unfair and should be put right. They
ask the courts to consider their grievance and say whether it is well-founded
or not. I think they should be heard. They should not be brushed off as having
no sufficient interest. I would allow the appeal accordingly. LAWTON L.J. Many members of the National Federation of
Self-Employed and Small Businesses have an acute sense of grievance over the
way the Inland Revenue Commissioners behave towards their members whose tax
returns do not appear to be in order compared with the way they have behaved
towards some 6,000 workers in the printing industry who have not paid for many
years tax on their casual earnings; and some of them seem to have engaged in
the fraudulent evasion of tax. The full rigour of the law is usually applied to
the self-employed and the small businessmen who are suspected of non-disclosure
and almost always to those suspected of fraud, yet the commissioners decided to
waive most of the arrears of unpaid tax owed by the printing workers. The
commissioners are suspected by the federation of having given way to trade
union pressure and threats of industrial action. The commissioners, through one
of their senior officers, a Mr. Hoadley, have justified what was done, partly
by relying on regulation 50 of the Income Tax (Employments) Regulations 1973 (S.I.
1973 No. 334) but primarily on the pragmatic ground that attempting to collect
tax from hostile workers would have been a waste of time and energy as little
tax would have been collected and any attempt to get in arrears would have made
tax collection from these workers more difficult in the future. They have
denied giving way under trade union pressure. If the decision of the
commissioners is ever looked into, it may be found that they were entitled to
do what they did and that what they did was both sensible and lawful. The
truth, however, is not likely to be revealed without disclosure of all relevant
documents and the cross-examination of those who took part in the negotiation
of this remarkable arrangement. The sole problem for consideration in this
appeal, however, is whether the federation can get the courts to look into what
the commissioners did and adjudge whether they acted lawfully. They submit they
can, the commissioners submit they cannot. In my opinion the law as to who can ask the courts to set in
motion remedies for public grievances is confused and in need of clarification.
In Reg. v. Lewisham Union Guardians [1897] 1 Q.B. 498 Wright J. who was regarded
as being outstandingly learned about what were then known as prerogative writs,
said: Certainly, so long as I have had
anything to do with applications for a mandamus I have always understood that
the applicant, in [*426] order to entitle himself to a mandamus, must first of all shew
that he has a legal specific right to ask for the interference of the court...
This court would be far exceeding its proper functions if it were to assume
jurisdiction to enforce the performance by public bodies of all their statutory
duties without requiring clear evidence that the person who sought its
interference had a legal right to insist upon such performance. During my professional lifetime until 1977 applicants for
prerogative orders had to satisfy the Divisional Court that they were aggrieved
persons, that is to say that they had suffered some damage or inconvenience
over and above that suffered by other citizens. Nowadays the former insistence
on an applicant having a legal specific right or being an
aggrieved person in the sense I have stated as a necessary qualification for making
an application for an order of mandamus is no longer the necessary
qualification. R.S.C., Ord. 53, r. 3 (5), provides that an applicant must have
a sufficient interest in the matter to which the application
relates. What do these words mean? In the context of R.S.C., Ord. 53
they connote a concern in respect of a right or title or the performance of a
public duty. Concern alone is not enough. All right minded citizens have a
concern for the performance of public duties and other peoples rights
and titles; but the concern must be of such intensity that it amounts to a
sufficient interest. In my judgment, for an interest to
come within R.S.C., Ord. 53, r. 3 (5), there must be a connection with the
subject matter of the application greater than that which citizens generally
may have. The present day qualification which an applicant for judicial review
(including a mandamus) must have is clearly less restrictive than a
legal specific right but must be more than a sense of grievance which
any citizen might reasonably have against a government department or any
statutory body performing public duties. Ratepayers in an adjoining rating area (see Arsenal Football
Club Ltd. v. Ende [1979] A.C. 1) have been adjudged to have a sufficient interest;
and a resident in the London urban area was adjudged to have been aggrieved by
the way that the Greater London Council performed their statutory duties under
the Cinematographic Acts 1909-1952 sufficiently to justify an application for
mandamus: see Reg. v. Greater London Council Ex parte Blackburn [1976] 1 W.L.R. 550.
If millions of residents and ratepayers have a sufficient interest to justify
an application for mandamus, why should not millions of taxpayers have such an
interest too? Herein lies the strength of Mr. Harveys submission on
behalf of the federation. He pointed out that the commissioners own
reports show that there are nearly as many ratepayers in Great Britain as there
are income-taxpayers. There is, however, a difference between the position of a taxpayer
and that of a ratepayer. A taxpayer is assessed for income tax on what he
himself earns or enjoys as income. Save that the statutory rules for assessment
are supposed to be the same for everybody, the assessment on him is made
without reference to anyone elses income and is confidential between
him and the Inland Revenue. A ratepayer has an affinity with other ratepayers
in the same rating area. The rating authority has to raise the rate and prepare
a valuation list showing the properties and [*427] persons rated. Every ratepayer has an
interest in what every other ratepayer in the rating area pays. If they are
rated for less than they should be, he may have to pay more. As Lord
Wilberforce pointed out in Arsenal Football Club Ltd. v. Ende [1979] A.C. 1, 15,
Parliament ever since 1743 has made provision for appeals by ratepayers
aggrieved by any valuation list or the
incorrectness or unfairness of any matter in the valuation list.
Income-tax payers have no similar interest in what others pay. If individuals,
or groups of individuals, having genuine grievances were allowed to apply for
orders of mandamus against the commissioners on the grounds that they were
being dealt with unfairly as compared with other named taxpayers, investigation
of the complaint would be impossible without breach of confidentiality. Further the commissioners for a long time, as is well known, have
granted individuals and even groups of taxpayers concessions for which there
seem to be no statutory authority. They have come to be known as
extra-statutory concessions. Some of these concessions have been the subject
matter of critical judicial comment: see the judgment of Walton J. in Vestey
v. Inland Revenue Commissioners (No. 2) [1979] Ch. 198, 203. Others are generally
regarded as sensible. The commissioners have made no secret of these
extra-statutory concessions. All engaged in advising upon tax law know about
them. Parliament must know too because some are referred to in the annual
reports which the commissioners make to Parliament. A striking example is
provided by the concessions which for some years have been made to
contemplative orders of nuns who cannot, because of the decision of the House
of Lords in Gilmour v. Coats [1949] A.C. 426, be regarded as charities.
These particular concessions are referred to in Halsburys Laws of
England, 3rd ed., vol. 20 (1957), para. 1185, and were mentioned in the
commissioners ninety-third (1949-50 Cmnd. 8103) and ninety-fifth
(1951-52 Cmnd. 8726) reports. Parliament, despite its tight control over tax
raising, has never tried to stop the commissioners making extra-statutory
concessions. If the applicants are right, it is odd that what Parliament has not
tried to do, any taxpayer with a genuine concern for the proper and lawful
administration of the Inland Revenue can ask the courts to do; but he is never
likely to complain about extra-statutory concessions of which he has had the
benefit but only about those which others have had. In my judgment the courts
should be slow to listen to the barking of the dog in the manger. It is, I think, pertinent to remember that Parliament has given
the courts only a limited jurisdiction over taxation. The taxpayer who is
aggrieved about his assessment cannot come direct to the courts but only by way
of appeal on a case stated on points of law by general or special
commissioners. If he is aggrieved about matters other than points of law he
can, through his member of Parliament, ask the Parliamentary Commissioner to
look into his case. If he is troubled by the way in which the commissioners are
performing their duties, he can bring his concern to the attention of his
member of Parliament or to the public generally through the press. All this
goes, in my judgment, to show that, in general, taxpayers having grievances
about the way the [*428] commissioners perform their duties cannot use the courts through
an order of mandamus to put right what is wrong. The courts may be the
publics watchdogs over government departments and public bodies and
officers; but, as the House of Lords has emphasised in recent judgments, they
cannot themselves extend their jurisdiction. There may, however, as Mr. Medd accepted in argument, be cases in
which a taxpayer has difficulties, special to himself, because of the way in
which the commissioners perform their duties. Extra-statutory concessions
granted to the employees of one business might, for example, deprive a rival
business of labour if the same concessions were not granted to its employees. I
can see no such special difficulties arising out of the facts of this case for
the members of the federation. They are complaining about the seeming
unfairness to themselves and to taxpayers generally of the
commissioners decision relating to the printing workers. They are not
saying, and cannot say, that they are in any worse plight than the general body
of taxpayers. Ever since the Middle Ages general complaints about the burden of
taxation and the misconduct of tax gatherers have been put before the High
Court of Parliament, as it used to be called. The royal courts were primarily
concerned with the complaints of individuals whose rights had been infringed or
who had suffered damage by the abuse or misuse of power. I have not overlooked the development of the law relating to
prerogative orders which has taken place during the past two decades,
particularly that which is evidenced by Reg. v. Greater London County
Council, Ex parte Blackburn [1976] 1 W.L.R. 550 which is binding upon me and to which
I referred earlier in this judgment. It would be presumptuous of me to try to
justify that decision. I distinguish it from the present case on the ground
that the commissioners are concerned to establish a relationship with
individuals. Unlike a local authority they have no duty to control the
environment in which people live. I appreciate that the distinction is a fine
one. The courts have come a long way since 1960 in allowing grievances against
persons performing public duties and exercising statutory powers to be given a
hearing in the courts. The common law was alive to the mischief which was
likely to arise if public officers could be sued by anyone with a grievance.
Appreciation of this likely mischief resulted in the development of the
restrictions imposed by the relator procedure. The restrictions of this
procedure do not apply to prerogative orders (see the speech of Lord
Wilberforce in Gouriet v. Union of Post Office Workers [1978] A.C. 435, 482,
and the submission in that case made by counsel for the Attorney-General at p.
446); but there still remains the restriction of a sufficient
interest. A line has to be drawn somewhere. If this application is
put on the side of the line where the federation want it to be,
anyones genuine concern for good and lawful government, whether at a
national or local level, would be a sufficient interest to justify a judicial
review. This would entangle the courts with administration in a way which would
be inconvenient and unconstitutional. Such is the flexibility of our unwritten
constitution that the lack of a remedy in the courts does not mean that justice
may not be done elsewhere. [*429] I would dismiss the appeal on the ground that the applicants have
not shown that they have a sufficient interest in the matter to which the
application relates. ACKNER L.J. The federations name speaks for itself.
Their membership is currently in the region of 50,000 grouped into 350 branches
and 38 regions covering the whole of the United Kingdom. Not all the
federations members are self-employed persons paying income tax under
Schedule D. Many are directors of their own companies taxable under P.A.Y.E.
The membership is derived from all the various trades in the small business
sector of the economy and the professions. The federation are seeking (1) a declaration that the Board of
Inland Revenue acted unlawfully in granting an amnesty to casual workers in
Fleet Street. (2) An order of mandamus directed to the board to assess and
collect income tax from the casual workers in Fleet Street according to law. The short ground for the application is that the Board of Inland
Revenue exceeded its powers and therefore acted unlawfully in granting this
amnesty. The application is an application for judicial
review and is made under the relatively new R.S.C., Ord. 53. Under
R.S.C., Ord. 53, r. 1 (2), an application for a declaration may be made by way
of an application for judicial review and on such an application the court may
grant the declaration claimed if it considers that having regard
to (a) the nature of the matters in respect of which relief may be granted by
way of an order of mandamus... (b) the nature of the persons and bodies against
whom the relief may be granted by way of such an order, and (c) all the
circumstances of the case, it would be just and convenient for the declaration
to or injunction be granted on an application for judicial review. R.S.C., Ord. 53, r. 3 (5) provides: The court shall not grant leave
unless it considers that the applicant has a sufficient interest in the matter
to which the application relates. As the notes in The Supreme Court Practice (1979) p. 824 correctly
state, this new order was introduced to create a uniform, flexible and
comprehensive code of procedure for the exercise by the High Court of its
supervisory jurisdiction over the proceedings and decisions of inferior courts,
tribunals or other bodies of persons charged with the performance of public
acts and duties... It eliminates procedural technicalities relating to the
machinery of administrative law, mainly by removing procedural differences
between the remedies which an applicant was formerly required to select as the
most appropriate to his case. Its practical effect, so far as this application is concerned, is
to enable the relief in the form of a declaration to be coupled with that of an
order of mandamus. [*430] There is only one issue which we have to decide, a preliminary
issue, namely, whether the federation has the necessary locus standi to be
heard to make this application. We are thus not at this stage concerned with
the merits of the allegation that the Board of Inland Revenue had no power to
grant a tax amnesty to casual workers in Fleet Street, who had for years paid
no tax on the remuneration they received from casual work. We must assume for
the purpose of this preliminary issue that the revenue had no such power. Thus
the sole question is whether the federation, to quote the words referred to in
R.S.C., Ord. 53, r. 3 (5), has a sufficient interest in the matter to
which the application relates. The issue between the parties is not only a short, but it is a
narrow one. It used to be said that the necessary interest to justify an order
for mandamus had to be dealt with on a very strict basis and the observations
of Wright J. in Reg. v. Lewisham Union Guardians [1897] 1 Q.B. 498,
500 were frequently quoted: Certainly, so long as I have had
anything to do with applications for a mandamus I have always understood that
the applicant, in order to entitle himself to a mandamus, must first of all
shew that he has a legal specific right to ask for the interference of the
court. Mr. Medd for the revenue accepts, having regard to subsequent
decisions, in particular of this court, that such a test is now far too severe.
He drew our attention to Rex v. Manchester Corporation [1911] 1 K.B. 560,
where Lord Alverstone C.J. referred to the apparent inconsistency of Reg. v.
Cotham
[1898] 1 Q.B. 802 where a very slight interest was held to be sufficient to
allow the application, with the decision in the Lewisham case [1897] 1 Q.B.
498. He contends that although the test is now less restrictive, nevertheless,
in order for an applicant to have a sufficient interest he
must have some genuine interest greater than that of the public at large. Mr.
Harvey for the federation contends, adopting a formulation suggested in the
course of his submissions, that all he has to show is that his clients can
reasonably assert that they have a genuine grievance. Let me, by an example, demonstrate how fine can be the difference
between the rival contentions. Mr. Medd would accept that if the applicants in
this case were competitors for labour with Fleet Street, and because of the
indulgence which the revenue was prepared to show to casual workers in Fleet
Street, found it impossible to recruit adequate labour into their undertakings,
because no such comparable tax indulgence was available to their casual
employees, they would have a sufficient interest. They
would have some genuine interest greater than that of the public at large. The
federation, however, are not in that position, and accordingly he contends that
they have no locus standi. If narrow distinctions of this kind are to determine whether a
private citizen should be entitled to secure the enforcement of a statutory
duty by a public authority who might otherwise violate it with impunity, then
the following contention seems equally permissible. The federation are not in
the same position as the public at large, because the
members of the federation are all taxpayers and the public at large are not. I [*431] would however be
reluctant to decide a question of this importance on such fine distinctions if
a common sense and workable formula can be justified. The position of a ratepayer seems now well-established. He does
not have to show some interest greater than other ratepayers in the area
administered by the local authority whose failure properly to perform their
statutory duty he is attacking. In Reg. v. Paddington Valuation Officer, Ex
parte Peachey Corporation Ltd. [1966] 1 Q.B. 380 the complaint was that the
valuation officer had failed to carry out his statutory duties in preparing the
list because he failed to take into account the open market rents currently
paid in finding the gross value as defined in section 68 of
the Rating and Valuation Act 1925. In dealing with the question as to whether
Peachey Property had a sufficient interest, or, as it was there put, having
regard to the terms of the statute, whether they were persons aggrieved so as
to be entitled to ask for certiorari or mandamus, Lord Denning M.R. said, at
pp. 400-401: Strange as it may seem, owing to the
way expenses are borne in the County of London, the rate poundage of Paddington
would remain the same even if the assessments of the flats in converted houses
were greatly increased... But I do not think grievances are to be measured in
pounds, shillings and pence. If a ratepayer or other person finds his name
included in a valuation list which is invalid, he is entitled to come to the
court and apply to have it quashed. In Reg. v. Hereford Corporation, Ex parte Harrower [1970] 1 W.L.R. 1424,
the Divisional Court granted an order for mandamus in the following
circumstances. The applicants were electrical contractors on the
corporations approved list. They were also ratepayers. They claimed
that the procedure adopted by the local authority contravened their own
standing order which required them to invite tenders and to give ten
days notice before entering into a contract for the installation of
central heating in certain of their flats, and that their failure to do so
involved their acting in breach of section 266 (2) of the Local Government Act
1933. Lord Parker C.J. in giving the judgment of the court said at p. 1428 that
the mere fact that the applicants were electrical contractors did not of itself
give them sufficient right, but that if they were ratepayers that would be
sufficient. He said his view was reinforced by the Irish case of Reg.
(McKee) v. Belfast Corporation [1954] N.I. 122 which was another case where
there was an application for a mandamus to comply with standing orders. His
decision in Reg. v. Customs and Excise Commissioners, Ex parte Cooke [1970] 1 W.L.R. 450,
is clearly justifiable on the basis that the courts discretion would
not have to be exercised in favour of the applicant in such a case, but it is
difficult to follow on the basis that the applicant had no interest over and
above the interests of the community as a whole. The respondents
alleged illegal acts were favouring his business competitors. Perhaps the strongest of all the cases in favour of the ratepayer
is Reg. v. Greater London Council, Ex parte Blackburn [1976] 1 W.L.R. [*432] 550, where Mr.
Blackburn and his wife applied for an order of prohibition to issue against the
council to prevent them, inter alia, exceeding their censorship powers by
allowing pornographic films to be shown openly in cinemas in London. When
dealing with issue of locus standi, Lord Denning M.R. said, at pp. 558-559: Who then can bring proceedings when
a public authority is guilty of a misuse of power? Mr. Blackburn is a citizen
of London. His wife is a ratepayer. He has children who may be harmed by the
exhibition of pornographic films. If he has no sufficient interest, no other
citizen has. I think he comes within the principle which I stated in McWhirters case [1973] Q.B. 629,
649, which I would recast today so as to read: I regard it as a
matter of high constitutional principle that if there is good ground for
supposing that a government department or a public authority is transgressing
the law, or is about to transgress it, in a way that offends or injures
thousands of Her Majestys subjects, then any one of those offended or
injured can draw it to the attention of the courts of law and seek to have the
law enforced, and the courts in their discretion can grant whatever remedy is
appropriate. Stephenson L.J. said at p. 564 that he saw no reason why the
applicants should not apply for prohibition: They live in the
councils jurisdiction and have locus standi, Mrs. Blackburn as a
ratepayer. Bridge L.J. said at p. 567 that he agreed that Mrs.
Blackburn had sufficient locus standi, as a ratepayer. That case is clearly authority for the proposition that not only
Mrs. Blackburn, qua ratepayer, but also Mr. Blackburn as a member of the public
living in the area where the films were shown had a sufficient interest. Of
course, if Mr. Blackburn had lived, for example in Penzance or Newcastle, it
might well be contended that he could not reasonably assert that he had a
genuine grievance, because he was so remote from where the alleged breach of
statutory duty was said to have occurred. Mr. Medd contends that the part of the judgment which I have set
out above, in which Lord Denning M.R. recasts the principle which he stated in Attorney-General
ex rel. McWhirter v. Independent Broadcasting Authority [1973] Q.B. 629, was
disapproved by Lord Wilberforce in his speech in Gouriet v. Union of Post
Office Workers [1978] A.C. 435, 483. This is undoubtedly correct in so far as
Lord Denning M.R.s observations were directed to relator proceedings.
Gouriets case was of course not concerned with prerogative orders, as
to which Lord Wilberforce made this passing observation, at 482H: Attention was drawn to the procedure
of applying for prerogative writs. These are often applied for by individuals
and the courts have allowed them liberal access under a generous conception of
locus standi. The last case on the position of a ratepayer is that of Arsenal
Football Club Ltd. v. Ende [1979] A.C. 1. In that case, the rateable value of the
football club stadium in the London Borough of Islington was shown in the
valuation list as £9,250. A Mr. Ende, who had all the rights and [*433] liabilities of a
ratepayer and who lived about a half a mile away from the stadium in the same
precepting area claimed to be a person aggrieved under
section 69 (1) of the General Rate Act 1967 by the value described in the list
and proposed that it should be altered to £60,000. Arsenal contended that to
show that a person is aggrieved he must prove that he is
demonstrably affected in his pocket, rights or interests by the under-valuation
of the interest and, as a revaluation even on the scale suggested would not
have had the slightest effect on the amount which Mr. Ende, as a ratepayer,
would have had to pay, he could not be said to be aggrieved by the
undervaluation. Lord Wilberforce in his speech, said at p. 17: On principle, and on the history of
this matter, there is no reason, in the absence of express limiting words, for
confining grievances to demonstrable injurious effects. Uniformity and fairness
have always been proclaimed, and judicially approved, as standards by which to
judge the validity of rates. Indeed I believe that many men feel a more acute
sense of grievance if they think they are being treated unfairly in relation to
their fellow ratepayers than they do about the actual payments they have to
make. To produce a sense of justice is an important objective of taxation
policy. I cannot see any logical distinction between the position of a
ratepayer who can reasonably assert that he has a genuine grievance if there is
unfairness between his assessment and that of others in the same rating area,
whether or not his pocket is affected, and the position of a taxpayer who can
reasonably assert that his sense of justice or fairness is offended by the
unlawful act by the revenue in allowing his fellow taxpayers not to pay their
tax. They have each in common the ability reasonably to assert a genuine
grievance and that, it seems to me, is a sufficient
interest to give them each a locus standi. In neither case can they
be said to be mere busybodies, seeking to interfere with matters that do not
concern them. To Mr. Medds rhetorical question - where do you draw
the line? - I would answer, where the assertion of a genuine grievance cannot
be said to be a reasonable assertion, i.e., it cannot be justified on
reasonable grounds. Since, for the purpose of deciding this preliminary issue,
it has been accepted that we should assume that the revenue acted unlawfully
because they have no dispensing power, then the body of taxpayers represented
by the federation can reasonably assert a genuine grievance. I would therefore hold that the federation has a locus standi and
should therefore be entitled to have the merits of this dispute decided. I,
too, would allow the appeal. Appeal allowed with costs. Leave to appeal. |