Law reports

Law reports

BANKRUPTCY

Property passing to trustee - claim for unfair dismissal - right of action not vesting in trustee in bankruptcy

Grady v Prison Service: CA (Lords Justice Thorpe and Sedley, Mr Justice Richards): 11 April 2003

After lodging her notice of appeal against the employment tribunal's decision to strike out her claim for unfair dismissal, the claimant was made bankrupt.

The Employment Appeal Tribunal held that the claimant lacked standing to pursue her appeal since her right of action had vested by law in her trustee in bankruptcy under the Insolvency Act 1986, and dismissed her appeal for want of jurisdiction.

The claimant appealed.

Michael Mulholland (instructed by Linder Myers, Manchester) for the claimant; Jeremy Johnson (instructed by the Treasury Solicitor) for the employer.

Held, allowing the appeal, that a claim which represented a transmissible asset of the bankrupt formed part of the estate on which the creditors had a claim, while one which reflected some aspect of the bankrupt's individuality did not; that the essential nature of a claim for unfair dismissal was personal, not proprietary; that a claim for reinstatement or re-engagement consequent on an unfair dismissal under the Employment Rights Act 1996 was not a thing in action of the kind which formed part of a bankrupt's estate, even though the eventual fund (if an award were made) might be; that therefore, an unfair dismissal claim was personal to the claimant and did not vest in her trustee and bankruptcy as a thing in action; and that, accordingly, the claimant had standing to pursue her appeal.

CRIMINAL

Sentencing - costs order made before confiscation order in breach of statutory provisions - costs order not nullity

R v Ruddick: CA (Lord Justice Rose, Mr Justice Morison and Mr Justice Leveson): 16 April 2003

The defendant was convicted of conspiracy to handle stolen vehicle parts and was sentenced to three and a half years' imprisonment consecutive to other sentences for other offences.

He was ordered to pay costs of 104,000.

Subsequently, the judge made a confiscation order in the sum of 100,000, in breach of section 72A(9) of the Criminal Justice Act 1988, as inserted by section 28 of the Criminal Justice Act 1993, which required the judge to take account of any confiscation order before making an order for costs.

The defendant appealed against the sentences of imprisonment and the costs and confiscation orders.

Sir John Nutting QC and Anthony Davis (assigned by the Registrar of Criminal Appeals) for the defendant; Christopher Knox and Rosalind Scott Bell (instructed by the Crown Prosecution Service, Northumbria) for the Crown.

Held, allowing the appeal in part, that even though the judge had not followed the correct sequence of events, that did not of itself render the orders he made unlawful; but that the failure to follow the correct procedure enabled a defendant to argue before the Court of Appeal that if the proper sequence had been observed then the costs order which was prematurely made should be quashed because of the judge's failure to take into account the confiscation order when he made the costs order; that, in the circumstances, the costs order was not excessive and would not be quashed, but that the sentences of imprisonment would be varied on the basis of material before the Court of Appeal not available to the court below.

Evidence - conviction of co-defendant during joint trial - jury entitled when determining issue essential to conviction of one defendant to have regard to conclusion reached against co-defendant on evidence presented during same trial

R v Hayter: CA (Lord Justice Mantell, Mr Justice Jack and Mr Justice Hedley): 16 April 2003

The defendant and two co-accused were indicted on a count of murder.

The defendant was said to have been the 'middleman', recruiting another accused, the killer, on behalf of the third, the former partner of the deceased.

To convict the defendant it was necessary to prove that the alleged killer was indeed the killer, and he was convicted during the joint trial.

Since the evidence on which the killer was convicted rested entirely on out-of-court admissions an issue arose as to the admissibility of such evidence as against the defendant.

The evidence was admitted and the defendant was convicted.

He appealed.

John Kelsey-Fry QC (assigned by the Registrar of Criminal Appeals) for the defendant; Mark Dennis (instructed by the Crown Prosecution Service) for the Crown.

Held, dismissing the appeal, that admitting the evidence did not erode the fundamental evidential rule that the alleged confession of one defendant in the absence of the other defendant was not evidence against that other defendant; that, in the light of section 74(1) of the Police and Criminal Evidence Act 1984, a jury could now have regard to a conclusion which it had reached on evidence presented in a joint trial to prove the existence of a fact that was a pre-condition in law to establishing the guilt of the secondary party; and that, accordingly, the judge had been right to admit the evidence.

DAMAGES

Employment - applicant supplied by employment agency - necessity of determining whether implied contract of service before considering mutuality of obligation

Franks v Reuters Ltd and another: CA (Dame Elizabeth Butler-Sloss, President, and Lords Justice Thorpe and Mummery): 10 April 2003

The applicant was supplied by the second respondent, an employment agency, to work for the first respondent in 1993, initially as a temporary placement and thereafter on a permanent basis, both as a driver and later also on the help desk.

In 1999, he was told by Reuters that his services were no longer required.

He claimed unfair dismissal, redundancy pay and damages for breach of contract.

The Employment Appeal Tribunal upheld the determination, on a preliminary issue, of London (North) Employment Tribunal applying Carmichael v National Power plc [1999] 1 WLR 2042, that, since there was no mutuality of obligation between the parties, the applicant was neither an employee of Reuters within the terms of section 230 of the Employments Rights Act 1996 nor of the employment agency.

The applicant appealed, arguing that the tribunal had failed to address the question of whether there was an implied contract of service between him and Reuters.

Michael Supperstone QC and James Ward (instructed by Sternberg Reed Taylor & Gill) for the applicant; Paul Rose QC (instructed by Latham & Co, Melton Mowbray) for the first respondent.

Held, allowing the appeal, that a tribunal first had to determine as a fact, on a consideration of all relevant evidence including what was said or done as well as any relevant documents, whether a contract between the parties could be implied from, among other things, length of service, the circumstances and nature of the applicant's work, arrangements for payment, disciplinary matters and so on; and that, since the tribunal had not clearly addressed that issue before concluding there was not the necessary mutuality of obligation, the matter should be remitted for rehearing by a fresh tribunal.

IMMIGRATION

Claimant asylum-seeker in marriage of convenience claiming financial assistance - council refusing to provide assistance as dependant of citizen of European Economic Area state - party to marriage of convenience still 'spouse'

R (K) v Lambeth London Borough Council: QBD (Mr Justice Silber): 16 April 2003

The claimant was a Kenyan national whose claim for asylum was refused.

Subsequently, she married an Irish national and applied for leave to remain in this country on the basis of that marriage.

That application was refused on the basis that the Secretary of State for the Home Department took the view that the marriage was a marriage of convenience.

The claimant and her husband separated in 2001 but remain married.

On 17 January 2003, the council informed the claimant that it could not provide financial assistance to her because of the provisions of the Immigration and Asylum Act 2002, which provided that a dependant of a citizen of other European Economic Area states was precluded from receiving benefits under that Act.

The claimant sought judicial review on the ground that she should be regarded as a party to a marriage of convenience for the purpose of determining whether the council was precluded from making payments to her, and as such was not a 'spouse' for the purpose of the provisions.

Michael Supperstone QC and Ranjiv Khubber (instructed by Joint Council for the Welfare of Immigrants) for the claimant; Nigel Giffin (instructed by Sternberg Reed Taylor & Gill) for the council; Kristina Stern (instructed by the Treasury Solicitor) for the Secretary of State for the Home Department, as an interested party.

Held, dismissing the claim for judicial review, that the word 'spouse' meant a person who was and remained lawfully married to another and denoted the marital status of the person concerned, so the motive of a party who entered a marriage was irrelevant for that purpose as was the fact that the parties might later have separated; and that, accordingly, the claimant was a dependant and was precluded from receiving financial assistance unless payment of asylum benefits was necessary for the purpose of avoiding a breach of her rights under the European Convention on Human Rights.

LOCAL GOVERNMENT

Housing - house built for occupation by single family extended and divided into self-contained flats - house constituting 'house in multiple occupation'

Stanley v Ealing London Borough Council: CA (Lords Justice Kennedy, Mantell and Buxton): 16 April 2003

A house built in the 1850s was converted in 1992 by the claimant into 11 self-contained flats, including three flats in a new extension independent of the house but with access through the original building.

The local authority served a notice to carry out amenity and safety works to the building on the basis that the building was a 'house' in multiple occupation and the independent extension formed part of the building.

The claimant contended that a building containing separate self-contained flats could not be treated as a house in multiple occupation so as to enable the local authority to serve such a notice and that to do so would contravene the claimant's right to the peaceful enjoyment of his property or possession under article 1 of protocol 1 of the European Convention on Human Rights, as scheduled to the Human Rights Act 1998.

The judge held that the building was a house in multiple occupation.

The claimant appealed.

Oliver Hyams (instructed by Robert Muckle, Newcastle upon Tyne) for the claimant; Kelvin Rutledge (instructed by Legal and Democratic Services, Ealing London Borough Council) for the council.

Held, dismissing the appeal, that it was clear from section 345(2) of the Housing Act 1985 that the expression 'house in multiple occupation' included any part of a building which was 'originally constructed or subsequently adopted for occupation by a single household'; that despite the fact that the building was internally divided into flats and externally added to by new flats, the building was a 'house' in multiple occupation for the purpose of service of the notice by the local authority; and that the convention provisions did not control matters of public health, which were to be controlled by national legislature.

MENTAL DISORDER

Compulsory detention in hospital during release on licence - licence revoked - period of detention in hospital not to be taken into account in calculating release date

R (S) v Secretary of State for the Home Department: CA (Lords Justice Simon Brown, Rix and Scott Baker): 16 April 2003

S, who had been released from prison on licence, was detained in hospital for treatment under section 3 of the Mental Health Act 1983.

Subsequently, the secretary of state revoked the licence and recalled S to prison under section 39(2) of the Criminal Justice Act 1991.

Mr Justice Maurice Kay, granting S's application for judicial review, quashed the revocation order.

The secretary of state appealed.

At the hearing, the appeal was abandoned but the court considered the question whether S was unlawfully at large during his compulsory detention for the purpose of calculating his release date under section 49(2) of the Prison Act 1952.

Steven Kovats (instructed by the Treasury Solicitor) for the secretary of state; Nicholas O'Brien (instructed by Galbraith Branley) for S.

Held, that section 49(2) postulated that everyone sentenced to imprisonment was either in lawful custody detained pursuant to his sentence or was unlawfully at large (unless detained pursuant to some other UK court sentence); that if a prisoner were sectioned during his release on licence, then once his licence was revoked he was 'liable to be detained in pursuance of his licence' (section 39(6) of the 1991 Act) and, pending such detention, he was 'absent from the place in which he is required in accordance with law to be detained' (section 49(2) of the 1952 Act; that, accordingly, S's detention in hospital did not count towards his prison sentence; but that, in the circumstances, the secretary of state should have exercised his discretion not to count the date of the detention in hospital as a day of absence from prison.

Patient compulsorily detained in hospital - court order classifying patient as suffering from mental illness - compulsory treatment for personality disorder unlawful

R (B) v Ashworth Hospital Authority: CA (Lords Justice Simon Brown, Dyson and Scott Baker): 15 April 2003

B was detained under sections 37 and 41 of the Mental Health Act 1983, pursuant to a court order classifying him as suffering from a mental illness.

The clinicians having care of B considered that he also suffered from a personality disorder.

He sought judicial review of the authority's decision to place him in a personality disorder ward.

Sir Richard Tucker, sitting as a judge of the Queen's Bench Division in the Administrative Court, refused the application.

B appealed.

Richard Gordon QC and Hugh Southey (instructed by Roberts Moore Nicholas Jones, Birkenhead) for B; Oliver Thorold (instructed by Capsticks) for the hospital authority.

Held, allowing the appeal, that, on a true construction in its statutory context, section 63 of the 1983 Act sanctioned compulsory treatment of a detained patient (other than treatment falling within sections 57 or 58 of the Act) only for the mental disorder specified by the court under section 37(7); and that, accordingly, it was unlawful for B to be compulsorily treated for the personality disorder.

(WLR)

REVENUE

Corporation tax - tax avoidance - validity of scheme for payments by employers into discretionary settlement for employees' future benefit

Macdonald (Inspector of Taxes) v Dextra Accessories Ltd and others: ChD (Mr Justice Neuberger): 16 April 2003

Corporate employers set up an avoidance scheme to postpone corporation tax liability whereby they made substantial contributions into an employees' trust fund, the non-resident trustees having power to apply capital or income for the benefit of all or any of the beneficiaries as they thought fit.

Special commissioners, having held that the anti-avoidance provisions laid down in Ramsay (WT) Ltd v Inland Revenue Comrs [1982] AC 300, HL(E), had no application, rejected the Inland Revenue's alternative case that the employers' contributions were held by the trustees 'with a view to their becoming relevant emoluments' of the employees under section 43(11) of the Finance Act 1989, and concluded that the contributions were deductible in computing the employers' tax liability for the accounting period in which the contributions were paid to the trustees.

The Inland Revenue appealed.

Timothy Brennan QC and Hugh McKay (instructed by Solicitor of Inland Revenue) for the Inland Revenue.

Andrew Thornhill QC (instructed by Ernst & Young LLP) for the employers.

Held, dismissing the appeal, that the purpose of section 43 of the Finance Act 1989 was to prevent schedule D taxpayers postponing corporation tax liability by setting aside sums to reward employees in a period of account which were not used for that purpose until a later period; but that those provisions had no application to the employee benefit trust set up by the employers because, for the purposes of section 43(11) of the Act, the contributions could not in the circumstances be said to be held by the trustees 'with a view to their becoming relevant emoluments' of the employees.

Repayment of VAT based on authoritative judicial decision - decision subsequently overruled - subsequent decision a 'fact' giving commissioners two years to recover repaid VAT

Commissioners of Customs and Excise v DFS Furniture Co Ltd: ChD (Sir Andrew Morritt V-C): 16 April 2003

In reliance on a decision of the Court of Appeal in unrelated proceedings between August 1996 and January 1997, the commissioners repaid to the taxpayer 13.1 million, being the amount which they thought that the taxpayer had paid in excess VAT.

Following a decision of the Court of Justice of the European Communities in May 2001 in the unrelated proceedings, it became clear that the repayment should not have been made and in September and December 2001 the commissioners issued recovery assessments under sections 80(4A) and 78A(1) of the Value Added Tax Act 1994.

On the taxpayer's appeal, the VAT and duties tribunal held that, since the assessments had been prompted by the decision of the Court of Justice which was a matter of law rather than fact, and since all other relevant matters had occurred more than two years before, the assessment had been raised after the expiry of the time limit in section 78A(2) of the 1994 Act.

The commissioners appealed.

Paul Lasok QC and Peter Mantle (instructed by Solicitor of Customs and Excise) for the commissioners; Roderick Cordara QC and Mark V Smith (instructed by Landwell (Solicitors) Ltd) for the taxpayer.

Held, allowing the appeal, that the existence of a judgment, its contents and its effect were facts or evidence of facts for the purposes of the time bar in section 78A(2), notwithstanding that they could for other purposes be evidence of the law; and that, accordingly, since the assessment had been raised within two years of a relevant fact it is was not out of time.

The law reports are prepared by the reporters to the Incorporated Council of Law Reporting for England and Wales; telephone: 020 7242 6471; fax: 020 7831 5247; http://www.lawreports.co.ukWLR means that a report has been submitted for publication in the Weekly Law Reports