Timothy Rex Bamber, R (on the application of) v Commissioners of HMRC

A public authority may depart from a clear promise or agreement only where the departure is objectively justified by a sufficiently weighty public interest and is not so unfair or disproportionate as to amount to an abuse of power. Some unfairness, disappointment or loss of a windfall is insufficient. The court must balance the public interest against the individual consequences, giving particular weight to proven reliance and significant detriment. Revenue agreements may involve pragmatic departures from strict statutory requirements, and an asserted policy must be supported by evidence of its existence and consistent application.

The Revenue negotiated a flat rate expense allowance with MyTravel for pilots and cabin crew. Its written agreement of 9 June 2004 applied retrospectively to earlier tax years and provided substantially increased allowances. After internal review, the Revenue concluded that the agreement was inconsistent with policy and practice, included inappropriate items and allowed excessive amounts. By letter of 30 November 2004 it resiled from the agreement and restored the previous allowances.

Mr Bamber sought judicial review and an order quashing the letter. He relied on the clear agreement, legitimate expectation, reliance and detriment. The central questions were whether the Revenue could withdraw from the agreement generally and whether Mr Bamber had established sufficient personal reliance and unfairness to prevent withdrawal as between himself and the Revenue.

1. Judicial review and abuse of power. The Revenue is amenable to judicial review where insisting on its statutory powers, despite its own promise or agreement, would be unfair in a manner amounting to an abuse of power. The inquiry concerns fairness, good administration and, where appropriate, proportionality.
2. Balancing exercise. A clear, unambiguous and unqualified promise may generate a substantive legitimate expectation. The court must weigh reliance and detriment against any overriding public interest relied upon to justify departure. Some unfairness is insufficient. The unfairness must be sufficiently marked, or the departure disproportionate, to make the conduct abusive. Detailed evidence of alleged prejudice may be required.
3. Application to general withdrawal. The June Agreement was clear, carefully negotiated and made in good faith. The Revenue had no properly established written policy against retrospective FREAs in June 2004, although it had an almost universal practice of applying them only to current and future years. The retrospective and unusually generous agreement created a substantial public interest in avoiding an anomalous arrangement and wider industry consequences. That interest outweighed the general unfairness relied upon.
4. Individual reliance. Employees who could prove higher actual expenses could still claim them, while others would mainly lose a windfall or could raise their own individual case. Mr Bamber’s evidence about expenditure, the cruise, the kitchen and destroyed receipts did not establish with sufficient detail the timing, amount, means-related hardship or significant detriment required to show substantial unfairness in his personal case.
5. The claim was dismissed insofar as it sought to preserve the agreement generally. The judge allowed a short opportunity for Mr Bamber to indicate that he wished to adduce further evidence confined to his personal position; failing that indication, his individual claim would also be dismissed.

First-instance judicial review proceedings in the Administrative Court. The judgment does not state any earlier appellate decision.